Technical Market Report

By: Mike Burk | Fri, Dec 24, 2004
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The good news is:
 • Seasonally, next week is one of the strongest and most consistent of the year.

The chart below is an update of one from last week showing the NASDAQ composite in red and a 4% trend (55 day EMA) of NASDAQ downside volume (DV) in brown. DV is on an inverted Y axis so decreasing DV moves the indicator upward while increasing DV moves the indicator downward. DV took its cue and dried up last week. This pattern should continue through next week.

For next week there is little benefit to any analysis other than seasonality.

Since 1885 the Dow Jones Industrial Average (DJIA) has been up 81% of the time during the last 5 trading days of the year with an average gain of 1.23%. The fourth year of the presidential cycle has been consistent with the average, up 79% of the time with an average gain of 1.28%.

The S&P 500 (SPX) was initiated in 1954 or 1955. For research purposes it has been assembled as a 90 issue average with data going back to 1928.

The NASDAQ composite was initiated in 1970. For research purposes figures for the average have been assembled going back to 1963.

The reports below include all of the SPX and NASDAQ data that I have. Daily percentage change figures are given with a mean of the previous 5 periods market Avg. In the year over year part of the report this is an average of the previous 5 years. In the presidential year 4 part of the breakdown this is an average of the previous 5 presidential 4th years. The row labeled Averages is the mean for that day in the entire database. The row labeled Winners shows the percentage that day was up over the entire database. The totals column shows the totals for the week. The three largest draw downs in the database for this period are listed with their dates, in the line that begins MDD. Looking at the summaries, the only day that has been up less than 50% of the time is 3rd day of the 4th presidential year for the NASDAQ. The only day that has been down on average is the 5th day of the 4th presidential year for the SPX.

Report includes the last 5 trading days of December.
The number following the year represents its position in the presidential Cycle.
The number following the daily return represents the day of the week;
1 = Monday, 2 = Tuesday etc.

OTC Day5 Day4 Day3 Day2 Day1 Totals
1963-3 -0.46% 2 0.20% 4 0.83% 5 0.34% 1 0.96% 2 1.88%
 
1964-4 0.59% 4 -0.23% 1 -0.70% 2 -0.07% 3 0.27% 4 -0.13%
1965-1 -1.05% 1 -0.75% 2 -0.63% 3 0.35% 4 0.09% 5 -1.98%
1966-2 0.34% 5 0.04% 2 -0.09% 3 0.07% 4 -0.14% 5 0.21%
1967-3 -0.25% 5 -0.17% 2 0.08% 3 -0.05% 4 -0.16% 5 -0.55%
1968-4 -0.31% 2 -0.41% 4 -0.01% 5 -0.27% 1 -1.01% 2 -2.02%
Avg -0.14% -0.30% -0.27% 0.01% -0.19% -0.89%
 
1969-1 -0.42% 3 0.51% 5 0.46% 1 -0.15% 2 0.38% 3 0.78%
1970-2 0.13% 4 0.44% 1 0.35% 2 0.57% 3 0.12% 4 1.62%
1971-3 -0.21% 1 0.21% 2 0.57% 3 0.36% 4 1.02% 5 1.94%
1972-4 -0.64% 4 0.15% 5 -0.08% 2 0.57% 3 1.36% 5 1.37%
1973-1 -0.95% 1 1.71% 3 1.18% 4 0.47% 5 0.56% 1 2.97%
Avg -0.42% 0.60% 0.50% 0.37% 0.69% 1.73%
 
1974-2 0.76% 2 0.99% 4 -0.24% 5 0.07% 1 1.77% 2 3.35%
1975-3 0.65% 3 1.00% 5 -0.25% 1 -0.35% 2 1.24% 3 2.28%
1976-4 0.48% 1 0.56% 2 0.07% 3 0.79% 4 0.86% 5 2.76%
1977-1 0.51% 5 0.02% 2 0.08% 3 0.37% 4 0.60% 5 1.58%
1978-2 0.93% 5 0.64% 2 -0.30% 3 -0.03% 4 0.58% 5 1.83%
Avg 0.67% 0.64% -0.13% 0.17% 1.01% 2.36%
 
1979-3 -0.13% 1 0.03% 3 0.15% 4 0.40% 5 0.21% 1 0.65%
1980-4 0.14% 3 0.57% 5 -0.72% 1 0.31% 2 0.77% 3 1.07%
1981-1 0.13% 4 -0.29% 1 -0.63% 2 0.39% 3 0.61% 4 0.20%
1982-2 0.37% 1 -0.43% 2 0.03% 3 -0.43% 4 0.49% 5 0.04%
1983-3 0.12% 5 0.05% 2 -0.04% 3 0.18% 4 0.56% 5 0.86%
Avg 0.13% -0.01% -0.24% 0.17% 0.52% 0.56%
 
1984-4 0.63% 1 0.10% 3 -0.17% 4 0.18% 5 0.52% 1 1.25%
1985-1 -0.38% 2 -0.02% 4 0.77% 5 0.12% 1 0.39% 2 0.87%
1986-2 0.25% 3 0.11% 5 -0.57% 1 -0.20% 2 0.43% 3 0.02%
1987-3 0.52% 4 -2.28% 1 -0.02% 2 1.28% 3 0.23% 4 -0.27%
1988-4 0.22% 5 -0.19% 2 0.03% 3 0.61% 4 0.61% 5 1.29%
Avg 0.25% -0.46% 0.01% 0.40% 0.44% 0.63%
 
1989-1 0.79% 5 0.16% 2 0.80% 3 0.26% 4 1.08% 5 3.08%
1990-2 -0.32% 1 0.00% 3 -0.36% 4 0.04% 5 0.71% 1 0.07%
1991-3 1.04% 2 1.77% 4 1.14% 5 2.48% 1 1.14% 2 7.58%
1992-4 0.44% 4 0.06% 1 0.41% 2 0.42% 3 0.76% 4 2.09%
1993-1 0.31% 1 0.46% 2 0.36% 3 0.49% 4 0.74% 5 2.36%
Avg 0.45% 0.49% 0.47% 0.74% 0.88% 3.04%
 
1994-2 0.39% 5 0.54% 2 -0.50% 3 0.95% 4 0.32% 5 1.70%
1995-3 0.61% 5 0.24% 2 -0.12% 3 -0.56% 4 0.95% 5 1.11%
1996-4 0.63% 2 0.54% 4 -0.25% 5 -0.28% 1 0.25% 2 0.90%
1997-1 -0.69% 3 0.79% 5 1.73% 1 1.79% 2 0.35% 3 3.97%
1998-2 -0.44% 4 0.80% 1 0.04% 2 -0.65% 3 1.19% 4 0.93%
Avg 0.10% 0.58% 0.18% 0.25% 0.61% 1.72%
 
1999-3 0.15% 1 -0.08% 2 1.75% 3 -0.11% 4 0.80% 5 2.50%
2000-4 2.00% 5 -0.93% 2 1.84% 3 0.72% 4 -3.41% 5 0.22%
2001-1 -0.07% 1 0.83% 3 0.80% 4 0.55% 5 -1.85% 1 0.26%
2002-2 -0.67% 2 -0.33% 4 -1.43% 5 -0.65% 1 -0.30% 2 -3.38%
2003-3 -0.28% 3 0.20% 5 1.69% 1 0.17% 2 -0.32% 3 1.45%
Avg 0.23% -0.06% 0.93% 0.14% -1.02% 0.21%
 
Averages 0.14% 0.19% 0.20% 0.28% 0.38% 1.19%
Winners 61% 68% 54% 68% 83% 85%
MDD 12/29/2000 3.41% -- 12/31/2002 3.34% -- 12/29/1965 2.40%
 
Presidential year 4
  Day5 Day4 Day3 Day2 Day1 Totals
1964-4 0.59% 4 -0.23% 1 -0.70% 2 -0.07% 3 0.27% 4 -0.13%
1968-4 -0.31% 2 -0.41% 4 -0.01% 5 -0.27% 1 -1.01% 2 -2.02%
1972-4 -0.64% 4 0.15% 5 -0.08% 2 0.57% 3 1.36% 5 1.37%
1976-4 0.48% 1 0.56% 2 0.07% 3 0.79% 4 0.86% 5 2.76%
1980-4 0.14% 3 0.57% 5 -0.72% 1 0.31% 2 0.77% 3 1.07%
Avg 0.05% 0.13% -0.29% 0.27% 0.45% 0.61%
 
1984-4 0.63% 1 0.10% 3 -0.17% 4 0.18% 5 0.52% 1 1.25%
1990-4 0.22% 5 -0.19% 2 0.03% 3 0.61% 4 0.61% 5 1.29%
1992-4 0.44% 4 0.06% 1 0.41% 2 0.42% 3 0.76% 4 2.09%
1996-4 0.63% 2 0.54% 4 -0.25% 5 -0.28% 1 0.25% 2 0.90%
2000-4 2.00% 5 -0.93% 2 1.84% 3 0.72% 4 -3.41% 5 0.22%
Avg 0.79% -0.08% 0.37% 0.33% -0.25% 1.15%
 
Averages 0.42% 0.02% 0.04% 0.30% 0.10% 0.88%
Winners 80% 60% 40% 70% 80% 80%
 
SPX Day5 Day4 Day3 Day2 Day1 Totals
1928-4 -0.42% 3 0.85% 4 1.44% 5 0.29% 6 1.25% 1 3.41%
 
1929-1 2.21% 4 -0.10% 5 -0.77% 6 1.11% 1 2.68% 2 5.14%
1930-2 -2.04% 5 -0.61% 6 -0.27% 1 2.31% 2 1.86% 3 1.25%
1931-3 0.13% 4 -2.51% 1 2.58% 2 1.76% 3 0.25% 4 2.20%
1932-4 -0.60% 2 -0.15% 3 2.27% 4 2.52% 5 -0.43% 6 3.60%
1933-1 -1.94% 2 1.36% 3 2.88% 4 -0.20% 5 1.30% 6 3.40%
Avg -0.45% -0.40% 1.34% 1.50% 1.13% 3.12%
 
1934-2 -0.55% 3 0.11% 4 3.75% 5 0.32% 6 0.64% 1 4.26%
1935-3 0.23% 4 -0.08% 5 -0.61% 6 2.07% 1 0.98% 2 2.59%
1936-2 0.18% 4 -0.70% 1 0.41% 2 1.53% 3 -0.52% 4 0.89%
1937-3 -3.35% 1 -3.55% 2 1.07% 3 1.34% 4 -0.09% 5 -4.58%
1938-4 -1.01% 2 1.18% 3 1.94% 4 0.08% 5 0.53% 6 2.72%
Avg -0.90% -0.61% 1.31% 1.07% 0.31% 1.18%
 
1939-1 -0.56% 2 -0.57% 3 0.89% 4 0.32% 5 0.24% 6 0.33%
1940-2 -0.10% 4 0.48% 5 0.57% 6 0.67% 1 0.09% 2 1.72%
1941-3 0.36% 5 0.36% 6 -0.95% 1 4.42% 2 -0.57% 3 3.62%
1942-4 0.21% 6 -1.13% 1 0.00% 2 1.14% 3 0.10% 4 0.32%
1943-1 -0.17% 1 -0.95% 2 0.00% 3 1.83% 4 -0.17% 5 0.54%
Avg -0.05% -0.36% 0.17% 1.68% -0.06% 1.30%
 
1944-4 -0.91% 2 -0.46% 3 1.00% 4 1.37% 5 0.00% 6 1.00%
1945-1 1.40% 3 -0.75% 4 0.17% 5 0.29% 6 0.00% 1 1.11%
1946-2 -1.04% 4 -0.13% 5 0.20% 6 -0.33% 1 0.86% 2 -0.45%
1947-3 -0.85% 5 -0.13% 6 -0.40% 1 1.20% 2 0.53% 3 0.34%
1948-4 -0.39% 1 -0.72% 2 1.33% 3 0.00% 4 -0.52% 5 -0.31%
Avg -0.36% -0.44% 0.46% 0.63% 0.29% 0.34%
 
1949-1 -0.36% 2 0.48% 3 0.12% 4 0.66% 5 -0.18% 6 0.72%
1950-2 -0.75% 2 1.91% 3 0.39% 4 0.25% 5 -0.10% 6 1.70%
1951-3 -0.42% 3 0.90% 4 0.17% 5 0.00% 6 0.34% 1 0.98%
1952-4 0.08% 3 0.15% 5 0.57% 1 0.72% 2 -0.08% 3 1.44%
1953-1 0.45% 4 -0.36% 1 -0.65% 2 0.86% 3 0.20% 4 0.49%
Avg -0.20% 0.62% 0.12% 0.62% 0.04% 1.07%
 
1954-2 -0.85% 1 1.03% 2 0.87% 3 0.00% 4 0.67% 5 1.72%
1955-3 0.20% 5 -0.62% 2 -0.38% 3 0.22% 4 0.73% 5 0.16%
1956-4 0.65% 5 0.04% 3 -0.09% 4 0.45% 5 0.24% 1 1.30%
1957-1 0.10% 2 1.01% 4 -0.35% 5 -0.50% 1 1.04% 2 1.30%
1958-2 -0.54% 2 1.29% 3 1.16% 1 0.35% 2 0.51% 3 2.77%
Avg -0.09% 0.55% 0.25% 0.13% 0.64% 1.45%
 
1959-3 0.07% 4 -0.03% 1 0.54% 2 0.79% 3 0.20% 4 1.57%
1960-4 0.09% 5 0.14% 2 0.45% 3 0.47% 4 0.10% 5 1.25%
1961-1 0.07% 5 0.16% 2 0.89% 3 0.06% 4 -0.20% 5 0.97%
1962-2 -0.02% 1 0.62% 3 -0.14% 4 0.05% 5 0.22% 1 0.73%
1963-3 0.22% 2 0.47% 4 0.16% 5 0.16% 1 0.62% 2 1.63%
Avg 0.09% 0.27% 0.38% 0.30% 0.19% 1.23%
 
1964-4 0.00% 4 -0.10% 1 -0.31% 2 0.58% 3 0.53% 4 0.71%
1965-1 -0.73% 1 0.01% 2 0.31% 3 0.42% 4 0.25% 5 0.26%
1966-2 -0.27% 5 -0.58% 2 -0.48% 3 -0.30% 4 -0.05% 5 -1.68%
1967-3 -0.19% 5 0.06% 2 0.68% 3 -0.02% 4 0.60% 5 1.14%
1968-4 -0.16% 2 0.10% 4 -0.39% 5 -0.90% 1 0.06% 2 -1.29%
Avg -0.34% -0.10% -0.04% -0.04% 0.28% -0.17%
 
1969-1 1.05% 3 0.78% 5 -0.70% 1 0.38% 2 0.50% 3 2.02%
1970-2 0.57% 4 0.53% 1 1.09% 2 0.21% 3 -0.13% 4 2.26%
1971-3 0.21% 1 0.99% 2 0.26% 3 -0.42% 4 0.30% 5 1.34%
1972-4 -0.72% 4 0.63% 5 0.41% 2 0.54% 3 0.96% 5 1.81%
1973-1 -0.68% 1 3.06% 3 2.09% 4 -0.20% 5 0.01% 1 4.27%
Avg 0.08% 1.20% 0.63% 0.10% 0.33% 2.34%
 
1974-2 1.39% 2 0.84% 4 -0.44% 5 0.03% 1 2.08% 2 3.90%
1975-3 0.82% 3 0.88% 5 -0.13% 1 -0.40% 2 0.47% 3 1.64%
1976-4 1.16% 1 0.67% 2 -0.40% 3 0.51% 4 0.54% 5 2.48%
1977-1 0.95% 5 0.00% 2 0.06% 3 0.20% 4 0.17% 5 1.38%
1978-2 1.69% 5 1.26% 2 -0.88% 3 -0.39% 4 -0.18% 5 1.49%
Avg 1.20% 0.91% -0.36% -0.01% 0.62% 2.18%
 
1979-3 0.07% 1 0.11% 3 0.17% 4 -0.11% 5 0.09% 1 0.33%
1980-4 0.43% 3 0.51% 5 -1.13% 1 0.22% 2 0.32% 3 0.35%
1981-1 0.19% 4 -0.22% 1 -0.49% 2 0.52% 3 0.20% 4 0.20%
1982-2 1.76% 1 -0.99% 2 0.33% 3 -0.64% 4 0.22% 5 0.68%
1983-3 -0.03% 5 0.94% 2 0.35% 3 -0.29% 4 0.04% 5 1.02%
Avg 0.48% 0.07% -0.15% -0.06% 0.18% 0.51%
 
1984-4 0.76% 1 -0.17% 3 -0.43% 4 0.31% 5 0.59% 1 1.05%
1985-1 -0.69% 2 0.25% 4 0.94% 5 0.51% 1 0.28% 2 1.30%
1986-2 0.17% 3 0.07% 5 -0.91% 1 -0.53% 2 -0.49% 3 -1.70%
1987-3 -0.45% 4 -2.56% 1 -0.40% 2 1.34% 3 -0.31% 4 -2.39%
1988-4 0.36% 5 -0.37% 2 0.09% 3 0.84% 4 -0.60% 5 0.31%
Avg 0.03% -0.56% -0.14% 0.49% -0.11% -0.29%
 
1989-1 0.77% 5 -0.18% 2 0.58% 3 0.53% 4 0.78% 5 2.48%
1990-2 -0.56% 1 0.29% 3 -0.77% 4 0.13% 5 0.46% 1 -0.46%
1991-3 0.63% 2 1.38% 4 0.40% 5 2.14% 1 0.47% 2 5.02%
1992-4 0.17% 4 -0.14% 1 -0.27% 2 0.19% 3 -0.71% 4 -0.76%
1993-1 0.68% 1 0.09% 2 -0.08% 3 -0.41% 4 -0.47% 5 -0.19%
Avg 0.34% 0.29% -0.03% 0.52% 0.11% 1.22%
 
1994-2 0.03% 5 0.57% 2 -0.35% 3 0.07% 4 -0.41% 5 -0.09%
1995-3 0.24% 5 0.38% 2 0.04% 3 -0.07% 4 0.29% 5 0.89%
1996-4 0.55% 2 0.64% 4 0.13% 5 -0.39% 1 -1.74% 2 -0.81%
1997-1 -0.68% 3 0.40% 5 1.80% 1 1.83% 2 -0.04% 3 3.31%
1998-2 -0.18% 4 -0.07% 1 1.33% 2 -0.80% 3 -0.22% 4 0.07%
Avg -0.01% 0.39% 0.59% 0.13% -0.42% 0.68%
 
1999-3 -0.09% 1 0.04% 2 0.40% 3 0.07% 4 0.33% 5 0.75%
2000-4 2.44% 5 0.71% 2 1.04% 3 0.40% 4 -1.04% 5 3.54%
2001-1 -0.02% 1 0.41% 3 0.68% 4 0.34% 5 -1.11% 1 0.29%
2002-2 -0.55% 2 -0.31% 4 -1.60% 5 0.46% 1 0.05% 2 -1.96%
2003-3 -0.18% 3 0.17% 5 1.24% 1 0.01% 2 0.21% 3 1.45%
Avg 0.32% 0.20% 0.35% 0.25% -0.32% 0.81%
 
Averages 0.01% 0.13% 0.34% 0.49% 0.22% 1.16%
Winners 52% 61% 62% 75% 68% 83%
MDD 12/28/1937 6.78% -- 12/29/1987 3.39% -- 12/29/1930 2.90%
 
Presidential year 4
  Day5 Day4 Day3 Day2 Day1 Totals
1928-4 -0.42% 3 0.85% 4 1.44% 5 0.29% 6 1.25% 1 3.41%
1932-4 -0.60% 2 -0.15% 3 2.27% 4 2.52% 5 -0.43% 6 3.60%
1936-4 0.18% 4 -0.70% 1 0.41% 2 1.53% 3 -0.52% 4 0.89%
1940-4 -0.10% 4 0.48% 5 0.57% 6 0.67% 1 0.09% 2 1.72%
 
1944-4 -0.91% 2 -0.46% 3 1.00% 4 1.37% 5 0.00% 6 1.00%
1948-4 -0.39% 1 -0.72% 2 1.33% 3 0.00% 4 -0.52% 5 -0.31%
1952-4 0.08% 3 0.15% 5 0.57% 1 0.72% 2 -0.08% 3 1.44%
1956-4 0.65% 5 0.04% 3 -0.09% 4 0.45% 5 0.24% 1 1.30%
1960-4 0.09% 5 0.14% 2 0.45% 3 0.47% 4 0.10% 5 1.25%
Avg -0.10% -0.17% 0.65% 0.60% -0.05% 0.94%
 
1964-4 0.00% 4 -0.10% 1 -0.31% 2 0.58% 3 0.53% 4 0.71%
1968-4 -0.16% 2 0.10% 4 -0.39% 5 -0.90% 1 0.06% 2 -1.29%
1972-4 -0.72% 4 0.63% 5 0.41% 2 0.54% 3 0.96% 5 1.81%
1976-4 1.16% 1 0.67% 2 -0.40% 3 0.51% 4 0.54% 5 2.48%
1980-4 0.43% 3 0.51% 5 -1.13% 1 0.22% 2 0.32% 3 0.35%
Avg 0.14% 0.36% -0.36% 0.19% 0.48% 0.81%
 
1984-4 0.76% 1 -0.17% 3 -0.43% 4 0.31% 5 0.59% 1 1.05%
1988-4 0.36% 5 -0.37% 2 0.09% 3 0.84% 4 -0.60% 5 0.31%
1992-4 0.17% 4 -0.14% 1 -0.27% 2 0.19% 3 -0.71% 4 -0.76%
1996-4 0.55% 2 0.64% 4 0.13% 5 -0.39% 1 -1.74% 2 -0.81%
2000-4 2.44% 5 0.71% 2 1.04% 3 0.40% 4 -1.04% 5 3.54%
Avg 0.85% 0.13% 0.11% 0.27% -0.70% 0.67%
 
Averages 0.19% 0.11% 0.35% 0.54% -0.05% 1.14%
Winners 58% 58% 63% 84% 53% 79%

The odds of next week being up are about 80%.

I expect the major indices to be higher on Friday December 31 than they were on Thursday December 23.


 

Author: Mike Burk

Mike Burk

Mike Burk independently publishes a weekly newsletter on the stock market from a technical perspective.

Charts and figures presented herein are believed to be reliable but we cannot attest to their accuracy. Recent (last 10-15 yrs.) data has been supplied by CSI (csidata.com), FastTrack (fasttrack.net), Quotes Plus (qp2.com) and the Wall Street Journal (wsj.com). Historical data is from Barron's and ISI price books. The views expressed are provided for information purposes only and should not be construed in any way as investment advice. Furthermore, the opinions expressed may change without notice.

Copyright © 2003-2016 Mike Burk

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