Technical Market Report For November 16, 2024

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 failed to confirm the SPX all time high.(Click on image to enlarge)The next chart is similar to the 1^st one except it shows the NASDAQ composite (OTC) in blue and OTC NH in green has been calculated with NASDAQ data.  OTC NH, by a small margin, also failed to confirm the new index high. NASDAQ new highs declined from 593 on Monday to 67 on Friday.(Click on image to enlarge)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 did not respond positively to the rapid upward move of the index and has resumed its decline.(Click on image to enlarge)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 did not respond positively to the rapid upward move of the SPX and has resumed its decline.(Click on image to enlarge)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 returned to negative territory.(Click on image to enlarge) 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 remained in positive territory. (Click on image to enlarge)
 SeasonalityNext week includes the 5 trading days prior to the 4^th 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 positive by all measures. Report for the week before the 4th Friday of November.The number following the year is the position in the Presidential Cycle.Daily returns from Monday through the 4th Friday. OTC Presidential Year 4 (PY4) Year       Mon     Tue     Wed    Thur    Fri    Totals 1964-4  -0.16%  -0.40%  -0.18%   0.00%  -0.16%  -0.90%  Avg     -0.16%  -0.40%  -0.18%   0.00%  -0.16%  -0.90%  1968-4   0.55%   0.25%   0.00%   0.06%   0.03%   0.89% 1972-4  -0.16%   0.05%   0.23%   0.00%   0.40%   0.52% 1976-4   0.56%  -0.28%   0.52%   0.00%   0.80%   1.61% 1980-4  -0.90%   0.58%   0.80%   0.00%   0.53%   1.01% 1984-4  -0.91%   0.07%  -0.01%   0.00%   1.00%   0.14%  Avg     -0.17%   0.13%   0.38%   0.06%   0.55%   0.83%  1988-4  -0.68%   0.08%   0.66%   0.00%  -0.38%  -0.32% 1992-4  -0.59%   1.11%   0.37%   0.00%   0.18%   1.08% 1996-4  -0.57%   0.64%   0.18%  -0.54%   1.30%   1.01% 2000-4  -5.01%  -0.14%  -4.05%   0.00%   5.41%  -3.79% 2004-4   0.70%  -0.04%   0.88%   0.00%  -0.03%   1.51%  Avg     -1.23%   0.33%  -0.39%  -0.54%   1.30%  -0.10%  2008-4   6.33%  -0.50%   4.60%   0.00%   0.23%  10.66% 2012-4   2.21%   0.02%   0.34%   0.00%   1.38%   3.94% 2016-4   0.89%   0.33%  -0.11%   0.00%   0.00%   1.11% 2020-4   0.22%   1.31%   0.48%   0.00%   0.92%   2.93% OTC summary for PY4 1964 – 2020 Avg      0.17%   0.21%   0.34%  -0.24%   0.83%   1.43% Win%       47%     67%     71%     50%     79%     80% OTC summary for all years 1963 – 2023 Avg     -0.16%  -0.19%   0.28%   0.69%   0.37%   0.40% Win%       48%     52%     72%     67%     75%     64%
 SPX PY4 Year       Mon     Tue     Wed    Thur    Fri    Totals 1956-4  -0.98%  -0.88%  -0.49%   0.00%   1.05%  -1.30% 1960-4   0.20%  -0.38%   0.14%   0.00%   0.59%   0.56%  1964-4  -0.32%  -0.31%  -0.34%   0.00%  -0.33%  -1.30% 1968-4   0.13%   0.21%   0.00%  -0.16%   0.31%   0.49% 1972-4   0.03%   0.59%   0.59%   0.00%   0.32%   1.53% 1976-4   0.66%  -0.61%   0.44%   0.00%   0.72%   1.21% 1980-4  -0.58%   0.74%   0.60%   0.00%   0.25%   1.01%  Avg     -0.02%   0.12%   0.32%  -0.16%   0.25%   0.59%  1984-4  -0.61%   0.66%   0.21%   0.00%   1.46%   1.72% 1988-4  -0.09%   0.37%   0.67%   0.00%  -0.66%   0.29% 1992-4  -0.36%   0.58%   0.37%   0.00%   0.23%   0.82% 1996-4  -0.08%   0.69%   0.24%  -0.16%   0.80%   1.50% 2000-4  -1.84%   0.35%  -1.85%   0.00%   1.47%  -1.87%  Avg     -0.60%   0.53%  -0.07%  -0.16%   0.66%   0.49%  2004-4   0.59%  -0.03%   0.41%   0.00%   0.08%   1.05% 2008-4   6.47%   0.66%   3.53%   0.00%   0.96%  11.62% 2012-4   1.99%   0.07%   0.23%   0.00%   1.30%   3.59% 2016-4   0.75%   0.22%   0.08%   0.00%   0.39%   1.43% 2020-4   0.56%   1.62%  -0.16%   0.00%   0.24%   2.26%  Avg      2.07%   0.51%   0.82%   0.00%   0.59%   3.99% SPX summary for PY4 1956 – 2020  Avg      0.38%   0.27%   0.29%  -0.16%   0.54%   1.45% Win%       53%     71%     75%     00%     88%     82% SPX summary for all years 1953 – 2023 Avg     -0.16%   0.04%   0.25%   0.46%   0.25%   0.43% Win%       44%     56%     76%     60%     73%     65%
 ConclusionMy theory that the election week rally was a bear market rally appears to have been spot on.The market is oversold so there should be some softening of the decline.  Thanksgiving week is usually the beginning of a 2 week rally.The strongest sectors last week were Energy (for the 2^nd week) and Utilities while the weakest were Precious Metals (for the 3^rd week) and Electronics.I expect the major averages to be lower on Friday November 22 than they were on Friday November 15. More By This Author:Technical Market Report For November 9, 2024 Technical Market Report For November 2 Technical Market Report For October 26