Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Will Fed‘s Cap On Interest Rates Trigger Gold’s Rally? - 30th May
Is Stock Market Setting Up for a Blow-Off Top? - 29th May 20
Strong Signs In The Mobile Gaming Market - 29th May 20
Last Clap for NHS and Carers, Sheffield UK - 29th May 20
The AI Mega-trend Stocks Investing - When to Sell? - 28th May 20
Trump vs. Biden: What’s at Stake for Precious Metals Investors? - 28th May 20
Stocks: What to Make of the Day-Trading Frenzy - 28th May 20
Why You’ll Never Get Another Stimulus Check - 28th May 20
Implications for Gold – 2007-9 Great Recession vs. 2020 Coronavirus Crisis - 28th May 20
Ray Dalio Suggests USA Is Entering A Period Of Economic Decline And New World Order - 28th May 20
Europe’s Coronavirus Pandemic Dilemma - 28th May 20
I Can't Pay My Payday Loans What Will Happen - 28th May 20
Predictive Modeling Suggests US Stock Markets 12% Over Valued - 27th May 20
Why Stocks Bear Market Rallies Are So Tricky - 27th May 20
Precious Metals Hit Resistance - 27th May 20
Crude Oil Cuts Get Another Saudi Boost as Oil Demand Begins to Show Signs of Life - 27th May 20
Where the Markets are heading after COVID-19? - 27th May 20
Silver Springboards Higher – What’s Next? - 26th May 20
Stock Market Key Resistance Breakout Is Where the Rubber Meets the Road - 26th May 20
5 Ways To Amp Up Your CFD Trading Today - 26th May 20
The Anatomy of a Gold Stock Bull Market - 26th May 20
Stock Market Critical Price Level Could Soon Prompt A Big Move - 25th May 20
Will Powell Decouple Gold from the Stock Market? - 25th May 20
How Muslims Celebrated EID in Lockdown Britain 2020 - UK - 25th May 20
Stock Market Topping Behavior - 24th May 20
Fed Action Accelerates Boom-Bust Cycle; Not A Virus Crisis - 23rd May 20
Gold Silver Miners and Stocks (after a quick drop) Ready to Explode - 23rd May 20
3 Ways to Prepare Financially for Retirement - 23rd May 20
4 Essential Car Trade-In Tips To Get The Best Value - 23rd May 20
Budgie Heaven at Bird Land - 23rd May 20
China’s ‘Two Sessions’ herald Rebound of Economy - 22nd May 20
Signs Of Long Term Devaluation US Real Estate - 22nd May 20
Reading the Tea Leaves of Gold’s Upcoming Move - 22nd May 20
Gold, Silver, Mining Stocks Teeter On The Brink Of A Breakout - 21st May 20
Another Bank Bailout Under Cover of a Virus - 21st May 20
Do No Credit Check Loans Online Instant Approval Options Actually Exist? - 21st May 20
An Eye-Opening Perspective: Emerging Markets and Epidemics - 21st May 20
US Housing Market Covid-19 Crisis - 21st May 20
The Coronavirus Just Hit the “Fast-Forward” Button on These Three Industries - 21st May 20
AMD Zen 3 Ryzen 9 4950x Intel Destroying 24 core 48 thread Processor? - 21st May 20
Dow Stock Market Trend Analysis and Forecast - 20th May 20
The Credit Markets Gave Their Nod to the S&P 500 Upswing - 20th May 20
Where to get proper HGH treatment in USA - 20th May 20
Silver Is Ensured A Prosperous 2020 Thanks To The Fed - 20th May 20
It’s Not Only Palladium That You Better Listen To - 20th May 20
DJIA Stock Market Technical Trend Analysis - 19th May 20
US Real Estate Showing Signs Of Covid19 Collateral Damage - 19th May 20
Gold Stocks Fundamental Indicators - 19th May 20
Why This Wave is Usually a Market Downturn's Most Wicked - 19th May 20
Gold Mining Stocks Flip from Losses to 5x Leveraged Gains! - 19th May 20
Silver Price Begins To Accelerate Higher Faster Than Gold - 19th May 20
Gold Will Soar Soon; World Now Faces 'Monetary Armageddon' - 19th May 20

Market Oracle FREE Newsletter

Coronavirus-stocks-bear-market-2020-analysis

Major Stock Market Indices Expected to End Lower Next Week

Stock-Markets / Stock Index Trading Aug 09, 2009 - 07:22 AM GMT

By: Mike_Burk

Stock-Markets

The good news is: All of the major indices hit multi month highs last week and most of them closed at multi month highs on Friday.


Short Term

Nearly all of the indicators support a continued advance.

The chart below covers 107 trading days from the beginning of the rally in early March through last Friday 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 1st trading day of each month.

OTC NH confirmed last Tuesday's OTC high suggesting, at least, one higher high to come. But, the indicator fell on Friday while the index rallied suggesting short term weakness.

Intermediate term

New highs declined a bit last week, but, there was no build up of new lows. The market will not be in any real trouble until new lows begin to expand.

The chart below covers the rally since its beginning in early March showing the OTC in blue and a 40% trend (4 day EMA) of NASDAQ (new highs / (new highs + new lows)) (OTC HL Ratio) in red. Dashed horizontal lines have been draws at 10% increments of the indicator, the line is solid at the neutral 50% level.

Risk will be limited as long as the indicator remains above the 50% level.

The next chart is similar to the one above except it covers the past 5 years to give you a perspective on how the indicator has worked over a longer period.

Seasonality

Next week includes the 5 trading days prior to the 2nd Friday of August during the 1st year of the Presidential Cycle.

The tables show the daily return on a percentage basis for the 5 trading days prior to the 2nd Friday of August during the 1st year of the Presidential Cycle. OTC data covers the period from 1963 - 2008 and S&P 500 (SPX) data from 1953 - 2008. Prior to 1953 the market traded 6 days a week so that data has been ignored. There are summaries for both the 1st year of the Presidential Cycle and all years combined.

Over all years the average returns have been modestly positive, however, during the 1st year of the Presidential Cycle average returns have been modestly negative.

Report for the week before the 2nd Friday of August.
The number following the year is the position in the presidential cycle.
Daily returns from Monday to 2nd Friday.

OTC Presidential Year 1
Year Mon Tue Wed Thur Fri Totals
1965-1 0.82% 0.35% 0.45% 0.71% -0.14% 2.18%
 
1969-1 1.52% -0.42% 0.56% 0.08% 0.33% 2.07%
1973-1 0.37% 0.08% -1.09% 0.02% -0.78% -1.40%
1977-1 -0.31% -0.03% 0.29% 0.13% -0.18% -0.10%
1981-1 -0.25% 0.39% 0.13% 0.19% -0.11% 0.36%
1985-1 -0.78% -0.64% -0.67% 0.17% 0.14% -1.78%
Avg 0.11% -0.12% -0.16% 0.12% -0.12% -0.17%
 
1989-1 0.94% 0.34% -0.19% 0.25% -0.23% 1.11%
1993-1 0.06% -0.20% 0.24% -0.23% 0.16% 0.03%
1997-1 0.70% 1.00% 0.55% -0.38% -1.58% 0.29%
2001-1 -1.55% -0.32% -3.03% -0.15% -0.35% -5.40%
2005-1 -0.62% 0.45% -0.75% 0.78% -0.81% -0.96%
Avg -0.10% 0.26% -0.64% 0.05% -0.56% -0.99%
 
OTC summary for Presidential Year 1 1965 - 2005
Avg 0.08% 0.09% -0.32% 0.14% -0.32% -0.33%
Win% 55% 55% 55% 73% 27% 55%
 
OTC summary for all years 1963 - 2008
Avg -0.26% 0.13% 0.27% -0.02% 0.05% 0.17%
Win% 41% 57% 64% 62% 48% 61%
 
SPX Presidential Year 1
Year Mon Tue Wed Thur Fri Totals
1953-1 -0.12% -0.12% 0.24% -0.20% -0.44% -0.65%
1957-1 -0.88% -1.25% 0.77% -0.28% 0.04% -1.59%
1961-1 -0.01% 0.22% -0.12% 0.31% 0.16% 0.56%
1965-1 -0.24% 0.01% 0.30% 0.29% 0.45% 0.81%
 
1969-1 -0.51% 0.45% 0.55% 0.07% -0.05% 0.51%
1973-1 0.23% -0.17% -0.94% 0.06% -0.80% -1.62%
1977-1 -0.78% 0.06% 0.89% -0.77% -0.29% -0.88%
1981-1 0.60% 0.99% -0.34% 0.08% -0.76% 0.57%
1985-1 -0.45% -1.41% -0.13% 0.68% -0.33% -1.65%
Avg -0.18% -0.02% 0.01% 0.02% -0.45% -0.62%
 
1989-1 1.60% -0.02% -0.69% 0.38% -1.01% 0.26%
1993-1 0.45% -0.28% 0.22% -0.33% 0.26% 0.33%
1997-1 0.33% 0.22% 0.83% -0.95% -1.85% -1.42%
2001-1 -1.14% 0.33% -1.73% -0.01% 0.57% -1.99%
2005-1 -0.27% 0.67% -0.18% 0.71% -0.60% 0.33%
Avg 0.19% 0.18% -0.31% -0.04% -0.53% -0.50%
 
SPX summary for Presidential Year 1 1953 - 2005
Avg -0.09% -0.02% -0.02% 0.00% -0.33% -0.46%
Win% 36% 57% 50% 57% 36% 50%
 
SPX summary for all years 1953 - 2008
Avg -0.24% 0.19% 0.19% 0.00% 0.07% 0.19%
Win% 39% 63% 55% 48% 54% 59%

Money supply (M2)

The money supply chart was provided by Gordon Harms. Money supply growth picked up a little last week.

Conclusion

The decline in OTC NH on an up day suggests there may be a little weakness in the next few days, however, the recent highs were confirmed by most of the indicators so higher highs in the intermediate term should be expected.

I expect the major indices to be lower on Friday August 14 than they were on Friday August 7.

This report is free to anyone who wants it, so please tell your friends. They can sign up at: http://alphaim.net/signup.html. If it is not for you, reply with REMOVE in the subject line.

Thank you,

By Mike Burk
To subscribe to this report : http://alphaim.net/signup.html

Gordon Harms produces a Power Point for our local timing group. You can get a copy of that at: http://www.stockmarket-ta.com/ .

Disclaimer: Mike Burk is an employee and principal of Alpha Investment Management (Alpha) a registered investment advisor. 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.

Mike Burk Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules