Technical Market Report For November 2

The good news is:

 The NegativesThe first chart covers the last 6 months showing the S&P 500 (SPX) in red and a 10% trend (19 day EMA) of NYSE new highs (NY NH) in green.  Dashed vertical lines have been drawn on the 1^st trading day of each month.   NY NH continued its decline last week.The next chart is similar to the 1^st one except it shows the OTC in blue and OTC NH in green has been calculated with NASDAQ data.  OTC NH also fell last as the index closed at an all time high on Tuesday. The next chart covers the past 6 months showing the OTC in blue and a 10% trend (19 day EMA) of NASDAQ new lows (OTC NL) in brown.  OTC NL has been plotted on an inverted Y axis so decreasing numbers of new lows move the indicator upward (up is good).  OTC NL accelerated its decline.The next chart is similar to the one above except it shows the SPX in red and NY NL, in blue, has been calculated with NYSE data.NY NL also accelerated its decline.The next chart covers the past 6 months showing the OTC in blue and a 40% trend (4 day EMA) of NASDAQ new highs divided by new highs + new lows (OTC HL Ratio), in red.  Dashed horizontal lines have been drawn at 10% levels for the indicator; the line is solid at the 50%, neutral level (equal numbers of new highs and new lows).OTC HL Ratio declined last week falling into negative territory. The PositivesThe next chart is similar to the one above except it shows the SPX in red and NY HL ratio, in blue, has been calculated with NYSE data.NY HL ratio also declined last week, but finished the week in positive territory.  SeasonalityNext week includes the 5 trading days prior to the 2^nd Friday of November during the 4^th year of the Presidential Cycle. The tables below show the daily change, on a percentage basis for that period. OTC data covers the period from 1963 to 2023 while SPX data runs from 1953 to 2023.  There are summaries for both the 4^th year of the Presidential Cycle and all years combined.  Prior to 1953 the market traded 6 days a week so that data has been ignored.Average returns for the coming week have been mixed and weaker during the 4^th year of the Presidential Cycle than other years.  Report for the week before the 2nd Friday of November.The number following the year is the position in the Presidential Cycle.Daily returns from Monday to 2nd Friday. OTC Presidential Year 4 (PY4) Year       Mon     Tue     Wed    Thur    Fri    Totals 1964-4   0.25%   0.25%  -0.27%   0.16%   0.30%   0.68% 1968-4  -0.68%   0.00%  -0.54%   0.06%  -0.09%  -1.25% 1972-4   0.18%   0.00%  -0.39%  -0.18%   0.23%  -0.16% 1976-4  -0.82%  -0.74%  -0.30%   0.38%  -0.06%  -1.54% 1980-4  -0.21%   0.99%   1.42%   1.25%   0.75%   4.20%  Avg     -0.26%   0.17%  -0.02%   0.33%   0.23%   0.39%  1984-4   0.20%   0.86%  -0.32%  -0.10%   0.00%   0.64% 1988-4  -1.18%   0.62%  -0.29%   0.17%  -1.23%  -1.91% 1992-4   0.85%   0.92%   1.14%  -0.09%   0.44%   3.26% 1996-4  -0.11%   0.70%   1.37%   0.66%   0.27%   2.89% 2000-4  -1.03%  -0.01%  -5.39%  -0.97%  -5.36% -12.75%  Avg     -0.25%   0.62%  -0.70%  -0.06%  -1.47%  -1.57%  2004-4   0.02%   0.20%  -0.43%   1.31%   1.17%   2.27% 2008-4  -1.86%  -2.22%  -5.17%   6.50%  -5.00%  -7.74% 2012-4   0.59%   0.41%  -2.48%  -1.42%   0.32%  -2.58% 2016-4   2.37%   0.53%   1.11%  -0.80%   0.54%   3.75% 2020-4  -1.53%  -1.37%   2.01%  -0.65%   1.02%  -0.51%  Avg     -0.08%  -0.49%  -0.99%   0.99%  -0.39%  -0.96% OTC summary for PY4 1964 – 2020  Avg     -0.20%   0.09%  -0.57%   0.42%  -0.48%  -0.72% Win%       47%     69%     33%     53%     64%     47% OTC summary for all years 1963 – 2023 Avg      0.04%   0.12%  -0.16%   0.21%   0.01%   0.21% Win%       52%     61%     54%     54%     63%     51%
 SPX PY4 Year       Mon     Tue     Wed    Thur    Fri    Totals 1956-4   1.32%   0.00%  -1.03%  -0.81%  -0.83%  -1.35% 1960-4   0.38%   0.00%   0.44%   1.41%  -0.46%   1.76%  1964-4  -0.05%  -0.41%   0.28%   0.13%   0.02%  -0.02% 1968-4   0.04%   0.00%   0.16%   0.22%   0.43%   0.86% 1972-4  -0.21%   0.00%  -0.55%   0.13%   0.20%  -0.43% 1976-4  -1.21%  -0.28%  -0.51%   0.84%  -0.40%  -1.57% 1980-4   0.23%   1.37%   2.54%   1.41%   0.48%   6.04%  Avg     -0.24%   0.23%   0.38%   0.55%   0.15%   0.98%  1984-4   0.69%   1.09%  -0.73%  -0.29%  -0.64%   0.12% 1988-4  -0.86%   0.45%  -0.66%   0.13%  -2.11%  -3.05% 1992-4   0.24%   0.01%   0.86%   0.16%  -0.10%   1.16% 1996-4   0.42%   1.05%   1.46%   0.42%   0.44%   3.79% 2000-4   0.39%  -0.02%  -1.58%  -0.65%  -2.44%  -4.30%  Avg      0.18%   0.51%  -0.13%  -0.05%  -0.97%  -0.46%  2004-4  -0.11%  -0.07%  -0.10%   0.91%   0.91%   1.54% 2008-4  -1.24%  -2.20%  -5.19%   6.92%  -4.17%  -5.88% 2012-4   0.22%   0.79%  -2.37%  -1.22%   0.17%  -2.42% 2016-4   2.22%   0.38%   1.11%   0.20%  -0.14%   3.76% 2020-4   1.17%  -0.14%   0.77%  -1.00%   1.36%   2.16%  Avg      0.45%  -0.25%  -1.16%   1.16%  -0.37%  -0.17% SPX summary for PY4 1956 – 2020  Avg      0.21%   0.15%  -0.30%   0.52%  -0.43%   0.13% Win%       65%     54%     47%     71%     47%     53% SPX summary for all years 1953 – 2023 Avg      0.06%   0.11%  -0.07%   0.22%   0.02%   0.32% Win%       58%     52%     59%     56%     59%     58%
 ConclusionThe OTC closed at an all time high last Tuesday that was unconfirmed by any of the breadth indicators then everything deteriorated through to the end of the week.The strongest sectors last week were Leisure (for the 2^nd week in a row) and Transportation while the weakest were Precious Metals (down from the top last week) and Utilities.I expect the major averages to be lower on Friday November 8 than they were on Friday November 1. Last week the Russell 2000 was up while the other major indices were down; so I am calling last weeks positive forecast a tie. More By This Author:Technical Market Report For October 26 Technical Market Report For October 19Technical Market Report For Saturday, Oct. 5