Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Stock Market Investing LESSON - Buying Value - 27th Nov 21
Corsair MP600 NVME M.2 SSD 66% Performance Loss After 6 Months of Use - Benchmark Tests - 27th Nov 21
Stock Maket Trading Lesson - How to REALLY Trade Markets - 26th Nov 21
SILVER Price Trend Analysis - 26th Nov 21
Federal Reserve Asks Americans to Eat Soy “Meat” for Thanksgiving - 26th Nov 21
Is the S&P 500 Topping or Just Consolidating? - 26th Nov 21
Is a Bigger Drop in Gold Price Just Around the Corner? - 26th Nov 21
Financial Stocks ETF Sector XLF Pullback Sets Up A New $43.60 Upside Target - 26th Nov 21
A Couple of Things to Think About Before Buying Shares - 25th Nov 21
UK Best Fixed Rate Tariff Deal is to NOT FIX Gas and Electric Energy Tariffs During Winter 2021-22 - 25th Nov 21
Stock Market Begins it's Year End Seasonal Santa Rally - 24th Nov 21
How Silver Can Conquer $50+ in 2022 - 24th Nov 21
Stock Market Betting on Hawkish Fed - 24th Nov 21
Stock Market Elliott Wave Trend Forecast - 24th Nov 21
Your once-a-year All-Access Financial Markets Analysis Pass - 24th Nov 21
Did Zillow’s $300 million flop prove me wrong? - 24th Nov 21
Now Malaysian Drivers Renew Their Kurnia Car Insurance Online With Fincrew.my - 24th Nov 21
Gold / Silver Ratio - 23rd Nov 21
Stock Market Sentiment Speaks: Can We Get To 5500SPX In 2022? But 4440SPX Comes First - 23rd Nov 21
A Month-to-month breakdown of how Much Money Individuals are Spending on Stocks - 23rd Nov 21
S&P 500: Rallying Tech Stocks vs. Plummeting Oil Stocks - 23rd Nov 21
Like the Latest Bond Flick, the US Dollar Has No Time to Die - 23rd Nov 21
Why BITCOIN NEW ALL TIME HIGH Changes EVERYTHING! - 22nd Nov 21
Cannabis ETF MJ Basing & Volatility Patterns - 22nd Nov 21
The Most Important Lesson Learned from this COVID Pandemic - 22nd Nov 21
Dow Stock Market Trend Analysis - 22nd Nov 21
UK Covid-19 Booster Jabs Moderna, Pfizer Are They Worth the Risk of Side effects, Illness? - 22nd Nov 21
US Dollar vs Yields vs Stock Market Trends - 20th Nov 21
Inflation Risk: Milton Friedman Would Buy Gold Right Now - 20th Nov 21
How to Determine if It’s Time for You to Outsource Your Packaging Requirements to a Contract Packer - 20th Nov 21
2 easy ways to play Facebook’s Metaverse Spending Spree - 20th Nov 21
Stock Market Margin Debt WARNING! - 19th Nov 21
Gold Mid-Tier Stocks Q3’21 Fundamentals - 19th Nov 21
Protect Your Wealth From PERMANENT Transitory Inflation - 19th Nov 21
Investors Expect High Inflation. Golden Inquisition Ahead? - 19th Nov 21
Will the Senate Confirm a Marxist to Oversee the U.S. Currency System? - 19th Nov 21
When Even Stock Market Bears Act Bullishly (What It May Mean) - 19th Nov 21
Chinese People do NOT Eat Dogs Newspeak - 18th Nov 21
CHINOBLE! Evergrande Reality Exposes China Fiction! - 18th Nov 21
Kondratieff Full-Season Stock Market Sector Rotation - 18th Nov 21
What Stock Market Trends Will Drive Through To 2022? - 18th Nov 21
How to Jump Start Your Motherboard Without a Power Button With Just a Screwdriver - 18th Nov 21
Bitcoin & Ethereum 2021 Trend - 18th Nov 21
FREE TRADE How to Get 2 FREE SHARES Fractional Investing Platform and ISA Specs - 18th Nov 21
Inflation Ain’t Transitory – But the Fed’s Credibility Is - 18th Nov 21
The real reason Facebook just went “all in” on the metaverse - 18th Nov 21
Biden Signs a Bill to Revive Infrastructure… and Gold! - 18th Nov 21
Silver vs US Dollar - 17th Nov 21
Silver Supply and Demand Balance - 17th Nov 21
Sentiment Speaks: This Stock Market Makes Absolutely No Sense - 17th Nov 21
Biden Spending to Build Back Stagflation - 17th Nov 21
Meshing Cryptocurrency Wealth Generation With Global Fiat Money Demise - 17th Nov 21
Dow Stock Market Trend Forecast Into Mid 2022 - 16th Nov 21
Stock Market Minor Cycle Correcting - 16th Nov 21
The INFLATION MEGA-TREND - Ripples of Deflation on an Ocean of Inflation! - 16th Nov 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Weekly Stock Market Technical Analysis Report - 6th Jan 07

Stock-Markets / Forecasts & Technical Analysis Jan 06, 2007 - 07:52 PM GMT

By: Mike_Burk

Stock-Markets

The good news is:
• There have been very few new lows on either the NYSE or NASDAQ.

Short Term
Changing volume patterns offer a short term view of what is happening in the market. Unfortunately, volume indicators are easily skewed by seasonal factors.

The chart below covers the last 100 trading days showing the NASDAQ composite (OTC) in magenta and momentum of NASDAQ downside volume (OTC DV) in green. OTC DV is plotted on an inverted Y axis so decreasing downside volume moves the indicator upward (up is good).


OTC DV rose sharply in late December, mostly from the overall seasonally induced decline in volume during that period rather than a strong upward move in prices. Friday OTC DV turned downward. It will be a few days before we can tell if the downward turn Friday was caused by seasonal factors or the beginning of a period of weakness. Recently the periods of weakness have been lasting 3-4 weeks.

Intermediate term
The secondaries lead both up and down. It may be that they simply have higher betas so the moves are exaggerated.

The next chart covers the past 6 months showing the S&P 500 (SPX) in red, the ratio of the Russell 2000 (R2K) to the SPX (R2K / SPX) in green, a 6% trend (33 day EMA) of the ratio in brown and an 11% trend (22 day EMA) of the ratio in blue. The ratio peaked in mid November and hit a low (so far) in mid December.

The last time the market hit its low for the year during summer of the 2nd year of the Presidential Cycle was in 1982.

The chart below is similar to the one above except it covers the period from the summer of 1982 to Mid January 1983. The ratio peaked in late November, bottomed in late December and had a sharp move downward on the first trading day of the year before moving upward. The recent period has been more volatile, but, the patterns are similar. The market was very strong in early 1983.

Seasonality
Seasonally, next week is the week prior to the 2nd Friday in January during the 3rd year in the Presidential Cycle.

In the tables below, OTC data covers the period from 1963 - 2003 and SPX data from 1955 - 2003 during the 3rd year of the Presidential Cycle. There are summaries for both the 3rd year of the Presidential Cycle and all years combined beginning with 1963 for the OTC and 1953 for the S&P 500. Data prior to 1953 has been omitted because the market traded 6 days a week.

The OTC has been up about 80% of the time with an average return of over 2%. The SPX has been up over 75% of the time with an average return of over 1%. This period during the 3rd year of the Presidential Cycle has been stronger than the average for all years.

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

OTC Presidential Year 3
Year Mon Tue Wed Thur Fri Totals
1963-3 -0.42% -0.03% -0.03% 0.42% -0.93% -1.00%
1967-3 0.76% 0.50% -0.24% 1.72% 0.61% 3.35%
1971-3 0.59% 0.36% 1.40% 0.13% 1.07% 3.55%
1975-3 0.83% 0.24% -0.63% 1.41% 2.12% 3.98%
1979-3 -0.11% 0.61% -0.31% 0.39% 0.80% 1.38%
1983-3 3.10% -2.09% 0.86% 0.23% 0.88% 2.98%
1987-3 2.24% 1.34% 1.77% 1.36% 0.82% 7.53%
Avg 1.33% 0.09% 0.62% 0.71% 1.14% 3.88%
1991-3 -1.91% -0.34% -0.43% 1.25% -0.03% -1.46%
1995-3 0.32% 0.59% -0.10% -0.01% 0.86% 1.66%
1999-3 1.72% -2.68% -0.17% -1.73% 3.14% 0.28%
2003-3 2.47% 0.72% -2.13% 2.67% 0.64% 4.37%
Avg 0.65% -0.43% -0.71% 0.55% 1.15% 1.21%
OTC summary for Presidential year 3 1963 - 2003
Avg 0.87% -0.07% 0.00% 0.71% 0.91% 2.42%
Win% 73% 64% 27% 82% 82% 82%
OTC summary for all years 1963 - 2006
Avg 0.44% -0.09% -0.07% 0.47% 0.33% 1.08%
Win% 70% 52% 45% 73% 73% 66%
SPX Presidential Year 3
Year Mon Tue Wed Thur Fri Totals
1955-3 1.30% -0.31% -0.28% -0.42% -0.42% -0.13%
1959-3 0.40% -0.13% -1.26% 0.93% 0.67% 0.61%
1963-3 -0.02% 0.97% -0.23% 0.19% 0.22% 1.12%
1967-3 0.77% 0.00% 0.80% 0.53% 0.74% 2.83%
1971-3 -0.23% 0.80% -0.17% 0.26% 0.25% 0.91%
1975-3 0.51% -0.07% -1.38% 1.61% 2.02% 2.70%
1979-3 -0.33% 0.54% -0.56% 0.33% 0.84% 0.81%
1983-3 1.10% -0.68% 0.62% -0.65% 0.63% 1.02%
1987-3 2.33% 0.23% 1.01% 0.76% 0.56% 4.90%
Avg 0.68% 0.16% -0.10% 0.46% 0.86% 2.07%
1991-3 -1.73% -0.17% -1.08% 0.98% 0.22% -1.79%
1995-3 0.03% 0.18% 0.00% -0.01% 0.94% 1.15%
1999-3 -0.88% -1.93% -0.41% -1.80% 2.57% -2.45%
2003-3 2.25% -0.65% -1.41% 1.94% 0.00% 2.12%
Avg -0.08% -0.64% -0.73% 0.28% 0.93% -0.24%
SPX summary for Presidential Year 3 1955 - 2003
Avg 0.42% -0.10% -0.34% 0.36% 0.71% 1.06%
Win% 62% 42% 23% 69% 85% 77%
SPX summary for all years 1953 - 2006
Avg 0.13% -0.18% -0.28% 0.24% 0.12% 0.03%
Win% 57% 40% 39% 70% 56% 52%

 

Conclusion
In the coming week the market has a strong, positive seasonal bias.I expect the major indices to be higher on Friday January 12 than they were on Friday January 5.

Last week the OTC was up while the other major indices were down so I am calling last weeks positive forecast a tie.


By Mike Burke

Mike Burk is an employee and principle 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. 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. To subscribe to this report : http://alphaim.net/signup.html NOTE - From time to time, The Market Oracle publishes articles from third parties. These articles do not necessarily express the viewpoints of The Market Oracle or its editorial team.


© 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