Best of the Week
Most Popular
1. TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
2.Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
3.GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
4.Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
7.Stock Market - Should You Be In Cash Right Now? - 17th May 21
8.Gold to Benefit from Mounting US Debt Pile - 14th May 21
9.Coronavius Covid-19 in Italy in August 2019! - 13th May 21
10.How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part 2 of 2 - 18th May 21
Last 7 days
USDT Ponzi Scheme FINAL WARNING To EXIT Before Tether Collapses Crypto Exchange Markets - 22nd Jun 21
Stock Market Correction Starting - 22nd Jun 21
This Green SuperFuel Could Change Everything For the $14 Trillion Shipping Industry - 22nd Jun 21
Virgin Media Fibre Broadband Installation - What to Expect, Quality of Wiring, Service etc. - 21st Jun 21
Feel the Inflationary Heartbeat - 21st Jun 21
The Green Superfuel That Could Disrupt Global Energy Markers - 21st Jun 21
How Binance SCAMs Crypto Traders with UP DOWN Coins, Futures, Options and Leverage - Don't Get Bogdanoffed! - 20th Jun 21
Smart Money Accumulating Physical Silver Ahead Of New Basel III Regulations And Price Explosion To $44 - 20th Jun 21
Rambling Fed Triggers Gold/Silver Correction: Are Investors Being Duped? - 20th Jun 21
Gold: The Fed Wreaked Havoc on the Precious Metals - 20th Jun 21
Investing in the Tulip Crypto Mania 2021 - 19th Jun 21
Here’s Why Historic US Housing Market Boom Can Continue - 19th Jun 21
Cryptos: What the "Bizarre" World of Non-Fungible Tokens May Be Signaling - 19th Jun 21
Hyperinflationary Expectations: Reflections on Cryptocurrency and the Markets - 19th Jun 21
Gold Prices Investors beat Central Banks and Jewelry, as having the most Impact - 18th Jun 21
Has the Dust Settled After Fed Day? Not Just Yet - 18th Jun 21
Gold Asks: Will the Economic Boom Continue? - 18th Jun 21
STABLE COINS PONZI Crypto SCAM WARNING! Iron Titan CRASH to ZERO! Exit USDT While You Can! - 18th Jun 21
FOMC Surprise Takeaways - 18th Jun 21
Youtube Upload Stuck at 0% QUICK FIXES Solutions Tutorial - 18th Jun 21
AI Stock Buying Levels, Ratings, Valuations Video - 18th Jun 21
AI Stock Buying Levels, Ratings, Valuations and Trend Analysis into Market Correction - 17th Jun 21
Stocks, Gold, Silver Markets Inflation Tipping Point - 17th Jun 21
Letting Yourself Relax with Activities That You Might Not Have Considered - 17th Jun 21
RAMPANT MONEY PRINTING INFLATION BIG PICTURE! - 16th Jun 21
The Federal Reserve and Inflation - 16th Jun 21
Inflation Soars 5%! Will Gold Skyrocket? - 16th Jun 21
Stock Market Sentiment Speaks: Inflation Is For Fools - 16th Jun 21
Four News Events That Could Drive Gold Bullion Demand - 16th Jun 21
5 ways that crypto is changing the face of online casinos - 16th Jun 21
Transitory Inflation Debate - 15th Jun 21
USDX: The Cleanest Shirt Among the Dirty Laundry - 15th Jun 21
Inflation and Stock Market SPX Record Highs. PPI, FOMC Meeting in Focus - 15th Jun 21
Stock Market SPX 4310 Right Around the Corner! - 15th Jun 21
AI Stocks Strength vs Weakness - Why Selling Google or Facebook is a Big Mistake! - 14th Jun 21
The Bitcoin Crime Wave Hits - 14th Jun 21
Gold Time for Consolidation and Lower Volatility - 14th Jun 21
More Banks & Investors Are NOT Believing Fed Propaganda - 14th Jun 21
Market Inflation Bets – Squaring or Not - 14th Jun 21
Is Gold Really an Inflation Hedge? - 14th Jun 21
The FED Holds the Market. How Long Will It Last? - 14th Jun 21
Coinbase vs Binance for Bitcoin, Ethereum Crypto Trading & Investing During Bear Market 2021 - 11th Jun 21
Gold Price $4000 – Insurance, A Hedge, An Investment - 11th Jun 21
What Drives Gold Prices? (Don't Say "the Fed!") - 11th Jun 21
Why You Need to Buy and Hold Gold Now - 11th Jun 21
Big Pharma Is Back! Biotech Skyrockets On Biogen’s New Alzheimer Drug Approval - 11th Jun 21
Top 5 AI Tech Stocks Trend Analysis, Buying Levels, Ratings and Valuations - 10th Jun 21
Gold’s Inflation Utility - 10th Jun 21
The Fuel Of The Future That’s 9 Times More Efficient Than Lithium - 10th Jun 21
Challenges facing the law industry in 2021 - 10th Jun 21
SELL USDT Tether Before Ponzi Scheme Implodes Triggering 90% Bitcoin CRASH in Cryptos Lehman Bros - 9th Jun 21
Stock Market Sentiment Speaks: Prepare For Volatility - 9th Jun 21
Gold Mining Stocks: Which Door Will Investors Choose? - 9th Jun 21
Fed ‘Taper’ Talk Is Back: Will a Tantrum Follow? - 9th Jun 21
Scientists Discover New Renewable Fuel 3 Times More Powerful Than Gasoline - 9th Jun 21
How do I Choose an Online Trading Broker? - 9th Jun 21
Fed’s Tools are Broken - 8th Jun 21
Stock Market Approaching an Intermediate peak! - 8th Jun 21
Could This Household Chemical Become The Superfuel Of The Future? - 8th Jun 21
The Return of Inflation. Can Gold Withstand the Dark Side? - 7th Jun 21
Why "Trouble is Brewing" for the U.S. Housing Market - 7th Jun 21
Stock Market Volatility Crash Course (VIX vs VVIX) – Learn How to Profit From Volatility - 7th Jun 21
Computer Vision Is Like Investing in the Internet in the ‘90s - 7th Jun 21
MAPLINS - Sheffield Down Memory Lane, Before the Shop Closed its Doors for the Last Time - 7th Jun 21
Wire Brush vs Block Paving Driveway Weeds - How Much Work, Nest Way to Kill Weeds? - 7th Jun 21
When Markets Get Scared and Reverse - 7th Jun 21
Is A New Superfuel About To Take Over Energy Markets? - 7th Jun 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market Seen Weakening Next Week

Stock-Markets / US Stock Markets Apr 25, 2009 - 07:21 PM GMT

By: Mike_Burk

Stock-Markets

Best Financial Markets Analysis ArticleThe good news is: Friday, the NASDAQ composite (OTC) and S&P mid cap closed at their highest levels since the early March low.


Short Term

The chart below covers the past 2 months showing the OTC in blue and an indicator showing the percentage of the previous 4 trading days that were up in black. Dashed vertical lines have been drawn on the 1st trading of each month.

The OTC was the strongest of the major indices last week and after Monday's sell off it rose for 4 consecutive days to a 2 month high, Friday. Each of the other 2 times the index was up for 4 consecutive days it has taken a hit. The 1st time March 15 the index fell 1.92% in 1 day, the 2nd time, April 3 the index fell 3.7% in 2 days.

Next week, like last week is likely to see a sell off early in the week.

Intermediate term

On March 6 there were 827 new lows on the NYSE and 567 on the NASDAQ. Those numbers are big enough to suggest a high likelihood of a retest of the March 9 lows.

Since the March low each successive high has been accompanied by an expansion of new highs, that pattern failed last week.

The chart below covers the past 6 months showing the OTC in blue and a 10% trend (19 day EMA) of NASDAQ new highs in green.

It has only been a week and things could change quickly, but, for now, the deterioration in new highs suggests a weakening market.

Seasonality

Next week includes the last 4 trading days of April and the 1st trading day of May during the 1st year of the Presidential Cycle.

The tables show the daily return on a percentage basis for the last 4 trading days of April and the 1st trading day of May during the 1st year of the Presidential Cycle. OTC data covers the period from 1963 - 2008 and SPX data from 1928 - 2008. There are summaries for both the 1st year of the Presidential Cycle and all years combined.

The week has been strong by all measures and especially strong during the 1st year of the Presidential Cycle.

Last 4 days of April and the first day of May.
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 0.33% 2 0.37% 3 0.56% 4 -0.31% 5 0.27% 1 1.23%
 
1969-1 -0.19% 5 0.68% 1 1.06% 2 1.81% 3 0.26% 4 3.62%
1973-1 -1.67% 3 0.32% 4 -1.20% 5 -0.51% 1 0.10% 2 -2.96%
1977-1 -0.15% 2 0.71% 3 0.28% 4 0.44% 5 0.37% 1 1.66%
1981-1 0.15% 1 -1.02% 2 -0.65% 3 0.24% 4 -0.03% 5 -1.31%
1985-1 0.32% 4 0.06% 5 -0.71% 1 -0.55% 2 -0.33% 3 -1.22%
Avg -0.31% 0.15% -0.24% 0.29% 0.07% -0.04%
 
1989-1 -0.11% 2 0.16% 3 0.66% 4 0.32% 5 -0.02% 1 1.01%
1993-1 1.03% 2 0.86% 3 0.04% 4 0.45% 5 0.80% 1 3.19%
1997-1 -1.53% 5 0.64% 1 2.10% 2 1.46% 3 0.77% 4 3.44%
2001-1 2.14% 3 -1.21% 4 2.01% 5 1.95% 1 2.46% 2 7.35%
2005-1 -1.20% 2 0.16% 3 -1.36% 4 0.92% 5 0.36% 1 -1.12%
Avg 0.07% 0.12% 0.69% 1.02% 0.87% 2.77%
 
OTC summary for Presidential Year 1 1965 - 2005
Averages -0.08% 0.16% 0.25% 0.57% 0.46% 1.35%
% Winners 45% 82% 64% 73% 73% 64%
MDD 4/30/1973 3.04% -- 4/28/2005 2.39% -- 4/29/1981 1.66%
 
OTC summary for all years 1963 - 2008
Averages 0.01% -0.02% 0.11% 0.29% 0.32% 0.71%
% Winners 48% 72% 63% 67% 62% 65%
MDD 4/30/2004 5.73% -- 4/29/1970 5.08% -- 4/29/1999 4.66%
 
SPX Presidential Year 1
  Day4 Day3 Day2 Day1 Day1 Totals
1929-1 -0.20% 5 0.27% 6 -0.47% 1 1.61% 2 0.19% 3 1.41%
1933-1 0.65% 3 -0.90% 4 1.69% 5 6.26% 6 1.32% 1 9.02%
1937-1 1.67% 2 -2.68% 3 0.00% 4 2.75% 5 0.00% 6 1.74%
1941-1 -0.11% 6 0.32% 1 0.21% 2 -1.38% 3 -0.11% 4 -1.06%
1945-1 -0.20% 4 0.41% 5 0.61% 6 0.34% 1 -0.34% 2 0.82%
Avg 0.36% -0.52% 0.41% 1.92% 0.21% 2.39%
 
1949-1 0.00% 3 -0.47% 4 0.14% 5 0.20% 6 0.27% 1 0.14%
1953-1 0.58% 1 0.74% 2 0.65% 3 -0.24% 4 0.45% 5 2.17%
1957-1 -0.35% 4 -0.13% 5 0.51% 1 0.02% 2 0.61% 3 0.66%
1961-1 1.40% 2 0.38% 3 -0.14% 4 -0.23% 5 -0.21% 1 1.20%
1965-1 0.17% 2 -0.04% 3 -0.08% 4 0.20% 5 0.13% 1 0.38%
Avg 0.36% 0.09% 0.22% -0.01% 0.25% 0.91%
 
1969-1 0.44% 5 0.30% 1 0.74% 2 0.88% 3 -0.17% 4 2.20%
1973-1 -1.50% 3 0.51% 4 -1.52% 5 -0.24% 1 0.12% 2 -2.64%
1977-1 -0.04% 2 0.88% 3 0.24% 4 0.24% 5 0.50% 1 1.82%
1981-1 0.25% 1 -0.85% 2 -0.95% 3 -0.18% 4 -0.07% 5 -1.80%
1985-1 0.64% 4 -0.68% 5 -0.85% 1 -0.44% 2 -0.81% 3 -2.15%
Avg -0.04% 0.03% -0.47% 0.05% -0.09% -0.51%
 
1989-1 -0.63% 2 0.06% 3 0.86% 4 0.02% 5 -0.17% 1 0.15%
1993-1 1.03% 2 0.00% 3 0.20% 4 0.30% 5 0.52% 1 2.04%
1997-1 -0.75% 5 0.99% 1 2.73% 2 0.92% 3 -0.35% 4 3.53%
2001-1 1.59% 3 0.47% 4 1.50% 5 -0.29% 1 1.36% 2 4.64%
2005-1 -0.89% 2 0.40% 3 -1.14% 4 1.19% 5 0.46% 1 0.02%
Avg 0.07% 0.38% 0.83% 0.43% 0.36% 2.08%
 
SPX summary for Presidential Year 1 1929 - 2005
Averages 0.19% 0.00% 0.25% 0.60% 0.19% 1.21%
% Winners 50% 65% 60% 65% 55% 80%
MDD 5/1/1985 2.76% -- 4/30/1973 2.75% -- 4/28/1937 2.68%
 
SPX summary for all years 1928 - 2008
Averages 0.08% -0.13% -0.07% 0.30% 0.09% 0.25%
% Winners 58% 50% 48% 60% 54% 60%
MDD 5/2/1932 8.45% -- 4/29/1936 6.82% -- 5/2/1938 4.86%

May

Since 1963, over all years the OTC in May has been near the middle of monthly performance averages, up 57% of the time with an average gain of 0.5%. However, during the 1st year of the Presidential Cycle May has been up 64% of the time with an average gain of 2.1% putting it 3rd behind October an April.

The average month has 21 trading days. The chart below has been calculated by averaging the daily percentage change of the OTC for each of the 1st 11 trading days and each of the last 10. In months when there were more than 21 trading days some of the days in the middle were not counted. In months when there were less than 21 trading days some of the days in the middle of the month were counted twice. Dashed vertical lines have been drawn after the 1st trading day and at 5 trading day intervals after that. The line is solid on the 11th trading day, the dividing point.

The blue line shows the average of all years since 1963 while the green line shows the average during the 1st year of the Presidential Cycle.

Since 1928 the SPX has been up 56% of the time in May with an average loss of 0.2% putting it ahead of February as the worst month of the year. During the 1st year of the Presidential Cycle the SPX has been up 50% of the time with an average gain of 1.3% putting it about in the middle of monthly performance figures.

The chart below is similar to the one above except it shows the daily performance over all years of the SPX in May in red and the performance during the 1st year of the Presidential Cycle in green.

Conclusion

The market appears to be weakening.

I expect the major indices to be lower on Friday May 1 than they were on Friday April 24.

Last week most of the major indices were down slightly while the OTC and Mid caps were up slightly so I am calling last weeks negative forecast a tie.

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