Technical Market Report

By: Mike Burk | Sat, Jun 25, 2005
Print Email

The good news is:
 • We are entering a seasonally strong period.

The weakness of last week was enough to turn all of the major indicators downward.

The NASDAQ new high indicator (OTC NH) is a 10% trend (19 day EMA) of NASDAQ new highs. The chart below shows the NASDAQ composite (OTC) in red and OTC NH in green. OTC NH does a pretty good job of indicating the short term market trend and it turned downward as of last Monday's close.

A summation index (SI) is a running total of oscillator values. The chart below shows SI's calculated from NASDAQ advancing issues - declining issues, new highs - new lows and upside volume - downside volume. Summation indices are an intermediate term trend indicator. As of Friday all of the NASDAQ summation indices had turned downward.

Seasonally next week includes the last 4 trading days of June and the first trading day of July. The tables below show the daily performance of the OTC and the S&P 500 (SPX) during the last 4 trading days of June and the 1st trading day of July during the 1st year of the presidential cycle with summaries for each day and the entire week. There are also summaries for same period over all years. The OTC data cover the period from 1963 - 2004 and the SPX data cover the period from 1928 - 2004. There are averages for 5 periods as well as the entire database.

MDD = Maximum Draw Down
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 Presidential Year 1
  Day4 Day3 Day2 Day1 Day1 Totals
1965-1 -1.51% 5 -0.45% 1 -2.13% 2 0.80% 3 1.80% 4 -1.49%
1969-1 -0.03% 3 0.09% 4 0.23% 5 1.20% 1 0.60% 2 2.09%
1973-1 0.53% 2 0.26% 3 0.94% 4 -0.18% 5 -0.82% 1 0.73%
1977-1 -0.03% 1 -0.35% 2 0.06% 3 0.39% 4 0.17% 5 0.24%
1981-1 0.25% 4 0.21% 5 -0.70% 1 -1.13% 2 -0.52% 3 -1.90%
Avg -0.16% -0.05% -0.32% 0.22% 0.25% -0.06%
 
1985-1 0.80% 2 0.38% 3 0.66% 4 0.29% 5 0.09% 1 2.23%
1989-1 0.28% 2 -0.81% 3 -1.57% 4 -0.60% 5 0.16% 1 -2.54%
1993-1 0.88% 5 1.16% 1 -0.25% 2 0.41% 3 -0.05% 4 2.15%
1997-1 -0.43% 3 -0.68% 4 0.13% 5 0.26% 1 -0.26% 2 -0.97%
2001-1 0.67% 2 0.49% 3 2.44% 4 1.65% 5 -0.55% 1 4.71%
Avg 0.44% 0.11% 0.28% 0.40% -0.12% 1.11%
 
Averages 0.14% 0.03% -0.02% 0.31% 0.06% 0.52%
% Winners 60% 60% 60% 70% 50% 60%
MDD 6/29/1965 4.04% -- 6/30/1989 2.96% -- 7/1/1981 2.33%
 
OTC averages for all years 1963 - 2004
Averages -0.14% 0.03% 0.15% 0.30% 0.00% 0.33%
% Winners 43% 52% 64% 69% 55% 69%
MDD 7/1/1970 5.06% -- 7/1/1974 4.99% -- 7/1/2002 4.06%
 
 
SPX Presidential Year 1
  Day4 Day3 Day2 Day1 Day1 Totals
1929-1 0.59% 3 0.18% 4 1.11% 5 0.77% 6 0.54% 1 3.20%
1933-1 1.01% 2 -1.28% 3 -0.92% 4 1.58% 5 2.57% 6 2.96%
1937-1 -1.03% 6 -1.56% 1 0.13% 2 1.72% 3 0.45% 4 -0.29%
1941-1 0.40% 4 -0.50% 5 -0.10% 6 -0.30% 1 -0.30% 2 -0.81%
 
1945-1 -0.13% 3 -2.02% 4 -1.13% 5 0.61% 6 0.47% 1 -2.21%
1949-1 -0.07% 1 -0.85% 2 0.64% 3 0.50% 4 0.71% 5 0.93%
1953-1 0.42% 4 0.08% 5 -0.29% 1 0.00% 2 0.41% 3 0.62%
1957-1 0.79% 2 -0.13% 3 0.36% 4 0.23% 5 0.13% 1 1.38%
1961-1 0.00% 2 0.19% 3 -0.11% 4 0.19% 5 0.88% 1 1.15%
Avg 0.20% -0.55% -0.10% 0.30% 0.52% 0.37%
 
1965-1 -0.60% 5 -1.76% 1 0.99% 2 2.07% 3 0.43% 4 1.14%
1969-1 -0.32% 3 0.25% 4 0.08% 5 0.39% 1 0.38% 2 0.78%
1973-1 1.03% 2 0.31% 3 1.03% 4 -0.41% 5 -1.30% 1 0.65%
1977-1 -0.21% 1 -0.83% 2 -0.03% 3 0.37% 4 -0.38% 5 -1.08%
1981-1 0.11% 4 -0.19% 5 -0.51% 1 -0.52% 2 -1.10% 3 -2.19%
Avg 0.00% -0.44% 0.31% 0.38% -0.39% -0.14%
 
1985-1 0.31% 2 0.17% 3 0.62% 4 0.32% 5 0.30% 1 1.72%
1989-1 0.56% 2 -0.80% 3 -1.88% 4 -0.53% 5 0.39% 1 -2.26%
1993-1 0.22% 5 0.95% 1 -0.26% 2 -0.04% 3 -0.34% 4 0.54%
1997-1 -0.82% 3 -0.60% 4 0.41% 5 -0.24% 1 0.66% 2 -0.59%
2001-1 -0.15% 2 -0.47% 3 1.25% 4 0.00% 5 0.86% 1 1.49%
Avg 0.02% -0.15% 0.03% -0.10% 0.38% 0.18%
 
Averages 0.11% -0.47% 0.07% 0.35% 0.30% 0.38%
% Winners 53% 37% 53% 58% 74% 63%
MDD 6/29/1945 3.25% -- 6/30/1989 3.18% -- 6/28/1937 2.58%
 
SPX averages for all years 1928 - 2004
Averages -0.04% -0.09% 0.14% 0.15% 0.30% 0.43%
% Winners 43% 50% 59% 60% 68% 57%

Typically there is a rally during the last 2 - 3 trading days of June. Last week's sell off turned most of the indicators downward and alleviated the overbought condition the market had been in for a while. Seasonal strength should help next week.

I expect the major indices to be higher on Friday July 1 than they were on Friday June 24.

This report is free to anyone who wants it, so please tell your friends. If it is not for you, reply with REMOVE in the subject line.


 

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

All Images, XHTML Renderings, and Source Code Copyright © Safehaven.com