Technical Market Report For September 14, 2024

The good news is:

 The NegativesThe negatives all went away last week. The PositivesThe first chart covers the last 6 months showing the NASDAQ composite (OTC) in blue and a 10% trend (19 day EMA) of NASDAQ new highs (OTC NH) in green.  Dashed vertical lines have been drawn on the 1^st trading day of each month.  OTC NH followed prices upward last week. The next chart is similar to the one above except it shows the S&P 500 (SPX) in red and NY NH in green has been calculated with NYSE data.  NY NH continued rising confirming the index move.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 reversed direction and turned upward last week.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 reversed direction and turned upward.Summation indices are running totals of oscillator values.Short term momentum indicators applied to summation indices make them nearly binary.The next chart covers the past 6 months showing the SPX in red and momentum of summation indices of oscillators of advancing and declining issues, new highs and new lows and upside and downside volume on the NYSE.  NY SI MoM’s all reversed and turned upward at the end of the week.The next chart is similar to the NYSE chart above; except it shows the OTC, in blue and the SI MoM’s have been generated from NASDAQ breadth data. OTC SI MoM’s also reversed and headed upward. 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 reversed, moving into positive territory.The 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 reversed, moving further into positive territory. 
 SeasonalityNext week includes the 5 trading days prior to the 3^rd Friday of September 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 3rd Friday of September.The number following the year is the position in the Presidential Cycle.Daily returns from Monday through 3rd Friday. OTC Presidential Year 4 (PY4) Year       Mon     Tue     Wed    Thur    Fri    Totals 1964-4   0.26%   0.14%  -0.12%   0.29%   0.31%   0.88% 1968-4  -0.07%   0.60%   0.00%   0.31%  -0.13%   0.72% 1972-4  -0.67%  -0.84%   0.26%   0.05%   0.07%  -1.13% 1976-4  -0.25%  -0.47%   0.11%   0.45%   0.63%   0.46% 1980-4   0.01%   0.91%   1.38%  -0.18%   0.89%   3.01%  Avg     -0.15%   0.07%   0.41%   0.19%   0.35%   0.79%  1984-4  -0.08%  -0.55%  -0.39%   0.05%  -0.18%  -1.15% 1988-4   0.12%   0.08%   0.38%  -0.30%   0.32%   0.61% 1992-4   1.92%  -1.07%  -0.34%   0.33%   0.22%   1.07% 1996-4   0.45%   0.78%   0.20%   0.53%   0.63%   2.58% 2000-4  -2.06%  -1.20%   1.15%   0.51%  -2.01%  -3.61%  Avg      0.07%  -0.39%   0.20%   0.22%  -0.20%  -0.10%  2004-4   0.85%   0.26%  -0.99%   0.40%   0.32%   0.84% 2008-4  -3.60%   1.28%  -4.94%   4.78%   3.40%   0.92% 2012-4  -0.17%  -0.03%   0.15%  -0.21%   0.13%  -0.12% 2016-4   1.68%  -1.09%   0.36%   1.47%  -0.10%   2.32% 2020-4   1.87%   1.21%  -1.25%  -1.27%  -1.07%  -0.51%  Avg      0.13%   0.33%  -1.33%   1.03%   0.53%   0.69% OTC summary for PY4 1964 – 2020  Avg      0.02%   0.00%  -0.29%   0.48%   0.23%   0.46% Win%       53%     53%     57%     73%     67%     67% OTC summary for all years 1963 – 2023 Avg      0.10%   0.10%   0.05%   0.17%   0.18%   0.61% Win%       46%     56%     62%     64%     62%     59%
 SPX PY4 Year       Mon     Tue     Wed    Thur    Fri    Totals 1956-4  -0.04%  -0.85%  -1.18%  -0.06%   0.80%  -1.33% 1960-4  -0.61%   0.11%  -0.70%  -0.40%  -0.20%  -1.79%  1964-4  -0.28%  -0.26%   0.29%   0.66%  -0.37%   0.04% 1968-4   0.38%   0.26%   0.00%   0.09%   0.07%   0.79% 1972-4  -0.58%  -0.95%   0.40%   0.03%  -0.11%  -1.22% 1976-4  -0.34%  -0.34%   0.30%   1.05%   0.88%   1.55% 1980-4   0.10%   0.85%   1.68%  -0.36%   0.66%   2.93%  Avg     -0.14%  -0.09%   0.67%   0.29%   0.23%   0.82%  1984-4   0.05%  -0.72%  -0.42%   0.32%  -1.07%  -1.85% 1988-4  -0.14%   0.36%   0.70%  -0.44%   0.94%   1.43% 1992-4   1.36%  -1.29%   0.04%   0.00%   0.71%   0.82% 1996-4   0.51%  -0.15%  -0.22%   0.23%   0.59%   0.95% 2000-4  -0.35%  -0.49%   0.20%  -0.27%  -1.02%  -1.93%  Avg      0.29%  -0.46%   0.06%  -0.03%   0.03%  -0.12%  2004-4   0.17%   0.22%  -0.71%   0.28%   0.45%   0.42% 2008-4  -4.71%   1.75%  -4.71%   4.33%   4.03%   0.68% 2012-4  -0.31%  -0.13%   0.12%  -0.05%  -0.01%  -0.38% 2016-4   1.47%  -1.48%  -0.06%   1.01%  -0.38%   0.56% 2020-4   1.27%   0.52%  -0.46%  -0.84%  -1.12%  -0.63%  Avg     -0.42%   0.18%  -1.16%   0.95%   0.59%   0.13% SPX summary for PY4 1956 – 2020  Avg     -0.12%  -0.15%  -0.30%   0.33%   0.29%   0.06% Win%       47%     41%     50%     59%     53%     59% SPX summary for all years 1956 – 2023 Avg      0.13%   0.05%   0.10%   0.14%   0.06%   0.49% Win%       54%     55%     66%     55%     52%     59% Money supply (M2) and Interest RatesThe following charts were supplied by Gordon Harms.The first chart, made with FastTrack, covers the past 4 years showing the SPX in red and M2 money supply in green.Money supply has remained constant for several months.Treasury rates at their close last Friday and their changes from last month:2yr yield 3.595% down from 4.736%5yr yield 3.439% down from 4.326%10yr yield 3.657% down from 4.318% 30yr yield 3.983% down from 4.431%The 2 yr and 5 yr rates are still inverted.  All of the others became uninverted last month.The next chart covers the past 15 months showing the 30 year yield over the 5 year yield on top, The 1, 2, 5, 10 & 30 year treasury rates in the middle group and the SPX with a 50 day simple moving average on the bottom. ConclusionMarket prices moved sharply upward last week taking the breadth indicators along for the ride.Seasonality for the coming week has been positive.There is an FOMC meeting next week that may cause some issues.The strongest sectors last week were Utilities (for the 3^rd week in a row) and Precious Metals (up from the bottom last week) while the weakest were Banks and Energy.I expect the major averages to be higher on Friday September 20 than they were on Friday September 13. More By This Author:Technical Market Report For September 7, 2024 Technical Market Report For August 31, 2024 Technical Market Report For August 24, 2024