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
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
Why Tether USDT, Stable Scam Coins Could COLLAPSE the Crypto Markets - Black Swan 2021 - 6th Jun 21
Stock Market: 4 Tips for Investing in Gold - 6th Jun 21
Apple (AAPL) Summer Correction Stock Trend Analysis - 5th Jun 21
Stock Market Sentiment Speaks: I 'Believe' We Rally Into A June Swoon - 5th Jun 21
Stock Market Russell 2000 After Reaching A Trend Channel High Flags Out - 5th Jun 21
Money Is Cheap, Own Gold - 5th Jun 21
Bitcoin and Ravencoin Cryptos CRASH Bear Market Buying Levels Price Targets - 4th Jun 21
Scan Computers - How to Test New Systems CPU, GPU and Hard Drive Stability With Free Software - 4th Jun 21
Hedge Funds Getting Bullish on Gold - 4th Jun 21
THERE ARE NO SOLUTIONS When the Media is the VIRUS - 4th Jun 21
Investors Who Blindly Trust the ‘Experts’ Will Get Left Behind - 4th Jun 21
US Stock Market Indexes Consolidate Into Flagging Pattern – Watch For Aggressive Trending Soon - 4th Jun 21
Microsoft (MSFT) Stock Trend Analysis - 3rd Jun 21
No More Market Bloodbath – Beyond Cryptos - 3rd Jun 21
Bank run, or run from the banks? - 3rd Jun 21
This Chart Shows When Gold Stocks Will Explode - 3rd Jun 21
The Meaning Behind Gold’s Triple Top - 2nd Jun 21
Stock Market Breakout Or Breakdown – What Does The Next Big Trend Look Like? - 2nd Jun 21
Biden’s Alternate Inflation Universe - 2nd Jun 21
What You Should Know Before Buying Car Insurance - 2nd Jun 21
Amazon (AMZN) Stock Summer Prime Day Discount Sale - 1st Jun 21
Gold Investor's Survival Guide - 1st Jun 21
Silver and Copper to Benefit from Global Electrification Push - 1st Jun 21
Will Gold Shine Under Bidenomics? - 1st Jun 21
Stock Market Buy the Dip, Again?! - 1st Jun 21
Stock Market Consolidation Ahead - 1st Jun 21
Stock Market Summer Correction Review, Crypto CRASH, Bitcoin Bear Market Initial Targets - 31st May 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Weekly Stock Market Technical Analysis Report - 31st March 2007

Stock-Markets / US Stock Markets Mar 31, 2007 - 02:00 PM GMT

By: Mike_Burk

Stock-Markets

The good news is: Next week as well as the entire month of April have had a very positive seasonal bias.

Short Term : Last week new lows on the NASDAQ peaked at 56 on Thursday well below the 159 seen on March 5. The high for the NYSE was 32 on Wednesday also well below the 106 reported on March 5.

The chart below covers the past year showing the OTC in orange and a 10% trend (19 day EMA) of NASDAQ new lows (OTC NL) in black. OTC NL has been plotted on an inverted Y axis so increasing new lows move the indicator downward (up is good).

The upward movement of OTC NL was arrested on Thursday casting some suspicion on rally off the March lows.


The next chart is similar to the previous one except it shows the S&P 500 (SPX) in blue and the indicator NY NL has been calculated from NYSE new lows. The picture is similar to the NASDAQ.

In the following charts are similar to those above except new lows have been calculated from the component issues of the indices over the trailing 6 weeks rather than 52 weeks as reported by the exchanges.

The following chart shows the Russell 2000 (R2K) in red and a new low indicator calculated from the component issues of the R2K.

NL continued to move upward last week while the index was declining.

The next chart is similar to the one above except is shows the SPX and NL has been calculated from the component issues of the SPX.

NL hit its low point for the past year in early March and continued to recover last week while the index declined.

The decline last week was not surprising considering how overbought the market was from the week before. The new low indicators held up well during the market's decline last week.

Intermediate term

Advance - decline lines (ADL) are a running total of declining issues subtracted from advancing issues. Historically they have had a negative bias making them valuable as top indicators. That is, usually the AD line will hit a cycle high a little before the major indices hit their cycle highs and fail to confirm the final high in the index.

To make this work you must begin your evaluation of the AD line with a cycle low and ignore everything that happened earlier.

The chart below covers the past year and a half showing the OTC in orange and an AD line calculated from NASDAQ advancing - declining issues (OTC NL) in blue. Dashed vertical lines have been drawn on the 1st trading day of each month the vertical line is red on the 1st trading day of the year.

OTC ADL hit a high on about April 1, 2006 and the index hit a cycle high about 2 weeks later unconfirmed by OTC ADL. Restarting the OTC ADL calculations after the summer lows OTC ADL confirmed the index high in late February 2007 suggesting that was not the cycle high.

The next chart covers the same period.

The indicator shows the percentage of the preceding 4 trading days that the OTC ADL has been up. When the OTC ADL has been up for 4 consecutive days the indicator touches the top of the chart and if it has been down for 4 consecutive days it touches the bottom of the chart.

This indicator usually gives some warning of an impending top by touching the bottom of the chart ahead of a high in the index.

It has not touched the bottom of the screen since the lows of last summer.

Seasonality

Next week is the week prior to Good Friday and includes the first 4 trading days of April.

There are two sets of tables, the first showing the first 4 trading days of April with OTC data from 1963 - 2003 during the 3rd year of the Presidential Cycle and SPX data beginning with 1928. The second set of tables shows the 4 trading days prior to Good Friday. SPX data prior to 1953 has been omitted on the Good Friday tables because the market traded 6 days a week.

There are summaries for both the 3rd year of the Presidential Cycle and all years combined.

The first 4 trading days of April during the 3rd year of the Presidential cycle have had a very strong positive bias. Since 1931 the SPX has been up nearly 80% of the time while the OTC has been up over 70% of the time. The average return for both indices has been over 1%. Over all years combined the SPX has been positive 68% of the time with an average return of 0.53% while the OTC has been up less than 50% of the time with an average negative return.

During the week prior to Good Friday both indices have been up about 2/3 of the time with positive average returns.

Report for the first 4 days of April.

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 3
Day1 Day2 Day3 Day4 Totals
1963-3 0.13% 1 0.34% 2 0.28% 3 0.75% 4 1.50%
1967-3 0.36% 1 -0.52% 2 0.06% 3 0.48% 4 0.38%
1971-3 0.35% 4 0.49% 5 0.29% 1 0.36% 2 1.49%
1975-3 -0.32% 2 0.27% 3 -0.89% 4 -0.29% 5 -1.23%
1979-3 -0.30% 1 0.74% 2 0.32% 3 0.47% 4 1.22%
1983-3 -0.76% 1 0.04% 2 -0.88% 3 0.10% 4 -1.50%
Avg -0.13% 0.20% -0.22% 0.22% 0.07%
1987-3 -0.40% 3 0.87% 4 1.22% 5 0.10% 1 1.79%
1991-3 -0.30% 1 2.15% 2 0.78% 3 0.51% 4 3.14%
1995-3 0.10% 1 -0.53% 2 0.32% 3 -0.31% 4 -0.42%
1999-3 1.30% 4 2.68% 1 0.12% 2 -0.73% 3 3.36%
2003-3 0.53% 2 3.59% 3 -0.01% 4 -0.94% 5 3.18%
Avg 0.25% 1.75% 0.49% -0.27% 2.21%
OTC sumamry for Presidential Year 3 1963 - 2003
Averages 0.06% 0.92% 0.15% 0.04% 1.17%
% Winners 55% 82% 73% 64% 73%
MDD 4/6/1983 1.60% -- 4/4/1975 1.23% -- 4/4/2003 .95%
OTC summary for all years 1963 - 2006
Averages -0.32% -1.02% -0.16% 0.72% -0.78%
% Winners 55% 36% 55% 36% 45%
MDD 4/4/2001 10.95% -- 4/5/1973 4.63% -- 4/6/1993 3.77%
SPX Presidential Year 3
Day1 Day2 Day3 Day4 Totals
1931-3 -1.02% 3 -0.42% 4 1.34% 6 -1.02% 1 -1.12%
1935-3 0.83% 1 -0.47% 2 -0.24% 3 1.06% 4 1.18%
1939-3 2.28% 6 0.27% 1 -2.13% 2 0.36% 3 0.78%
1943-3 0.09% 4 -0.26% 5 0.17% 6 0.09% 1 0.09%
1947-3 0.40% 2 -0.07% 3 -0.26% 4 -0.07% 6 0.00%
1951-3 -0.37% 1 -0.28% 2 0.66% 3 1.36% 4 1.36%
1955-3 1.01% 5 -0.32% 1 0.68% 2 0.24% 3 1.61%
1959-3 0.45% 3 0.56% 4 0.79% 5 0.28% 1 2.08%
1963-3 0.42% 1 -0.01% 2 0.78% 3 0.73% 4 1.91%
Avg 0.38% -0.03% 0.53% 0.51% 1.39%
1967-3 -1.06% 1 -0.02% 2 0.64% 3 0.17% 4 -0.28%
1971-3 0.08% 4 0.17% 5 0.23% 1 0.71% 2 1.19%
1975-3 -0.86% 2 -0.25% 3 -1.12% 4 -0.77% 5 -3.01%
1979-3 -0.68% 1 1.49% 2 0.24% 3 0.59% 4 1.65%
1983-3 0.04% 1 -0.74% 2 -0.56% 3 0.48% 4 -0.78%
Avg -0.50% 0.13% -0.11% 0.24% -0.25%
1987-3 0.24% 3 0.42% 4 2.31% 5 0.51% 1 3.48%
1991-3 -1.04% 1 2.21% 2 -0.15% 3 0.22% 4 1.24%
1995-3 0.23% 1 0.68% 2 0.07% 3 0.10% 4 1.07%
1999-3 0.57% 4 2.12% 1 -0.24% 2 0.68% 3 3.13%
2003-3 1.21% 2 2.61% 3 -0.51% 4 0.27% 5 3.59%
Avg 0.24% 1.61% 0.30% 0.36% 2.50%
SPX summary for Presidential Year 3 1931 - 2003
Averages 0.15% 0.40% 0.14% 0.32% 1.01%
% Winners 68% 47% 58% 84% 79%
MDD 4/4/1975 2.98% -- 4/4/1939 2.13% -- 4/2/1931 1.44%
SPX summary for all years 1928 - 2006
Averages 0.09% 0.16% 0.11% 0.18% 0.53%
% Winners 61% 57% 55% 62% 68%
MDD 4/5/1932 7.93% -- 4/4/2001 4.92% -- 4/4/1986 4.27%

Report for the 4 days before Good Friday.

OTC Presidential Year 3
Day4 Day3 Day2 Day1 Totals
1963-3 0.25% 1 0.18% 2 -0.18% 3 -0.28% 4 -0.03%
1967-3 0.15% 1 0.16% 2 -0.65% 3 0.36% 4 0.02%
1971-3 0.29% 1 0.36% 2 0.46% 3 0.30% 4 1.41%
1975-3 -1.98% 1 -0.12% 2 1.65% 3 0.82% 4 0.38%
1979-3 -0.01% 1 0.36% 2 -0.48% 3 -0.02% 4 -0.16%
1983-3 -0.64% 1 -0.14% 2 0.75% 3 0.01% 4 -0.03%
Avg -0.44% 0.12% 0.35% 0.29% 0.33%
1987-3 -1.68% 1 -2.48% 2 0.76% 3 0.75% 4 -2.65%
1991-3 0.94% 1 2.15% 2 0.79% 3 -0.01% 4 3.87%
1995-3 0.81% 1 0.43% 2 0.45% 3 0.50% 4 2.19%
1999-3 3.04% 1 -0.50% 2 -0.76% 3 1.30% 4 3.08%
2003-3 1.92% 1 0.44% 2 0.27% 3 2.21% 4 4.83%
Avg 1.01% 0.01% 0.30% 0.95% 2.26%
OTC summary for Presidential Year 3 1963 - 2003
Averages 0.28% 0.08% 0.28% 0.54% 1.17%
%Winners 64% 64% 64% 73% 64%
MDD 4/14/1987 4.11% -- 3/25/1975 2.09% -- 3/31/1999 1.26%
OTC summary for all years 1963 - 2006
Averages 0.15% 0.29% 0.26% 0.37% 1.06%
% Winners 50% 59% 68% 75% 59%
SPX Presidential Year 3
Day4 Day3 Day2 Day1 Totals
1955-3 0.59% 2 0.13% 3 0.21% 4 0.45% 5 1.38%
1959-3 -0.92% 1 0.16% 2 -0.14% 3 -0.21% 4 -1.12%
1963-3 0.35% 1 -0.10% 2 -0.23% 3 0.70% 4 0.72%
1967-3 -0.06% 1 -0.22% 2 0.28% 3 0.76% 4 0.77%
1971-3 0.23% 1 0.71% 2 0.46% 3 0.12% 4 1.52%
1975-3 -2.36% 1 0.79% 2 1.86% 3 0.31% 4 0.60%
1979-3 -0.30% 1 0.46% 2 -1.00% 3 -0.30% 4 -1.14%
1983-3 -0.54% 1 -0.17% 2 1.19% 3 -0.28% 4 0.20%
Avg -0.61% 0.31% 0.56% 0.12% 0.39%
1987-3 -2.35% 1 -2.26% 2 1.89% 3 0.87% 4 -1.85%
1991-3 0.64% 1 1.75% 2 -0.25% 3 -0.03% 4 2.10%
1995-3 0.12% 1 -0.29% 2 0.32% 3 0.41% 4 0.56%
1999-3 2.14% 1 -0.72% 2 -1.11% 3 0.57% 4 0.88%
2003-3 1.95% 1 0.63% 2 -1.22% 3 1.55% 4 2.91%
Avg 0.50% -0.18% -0.07% 0.67% 0.92%
SPX summary for Presidential year 3 1955 - 2003
Averages -0.04% 0.07% 0.17% 0.38% 0.58%
%Winners 54% 54% 54% 69% 77%
MDD 4/14/1987 4.56% -- 3/24/1975 2.36% -- 3/31/1999 1.82%
SPX summary for all years 1953 - 2006
Averages 0.04% 0.14% 0.07% 0.23% 0.49%
% Winners 48% 54% 55% 65% 65%

 

April

During the 3rd year of the Presidential Cycle the OTC has had an average return of 3.7% and been down only once, in 1987. Over all years the index has been up 68% of the time with an average return of 1.5%.

The chart below shows the OTC for an average April over all years in orange and the average April during the 3rd year of the Presidential Cycle in blue.

The number of trading days in April has varied from 19 to 22. The chart shows the average return of the first 11 trading days and the last 10. Dashed vertical lines have been drawn after the 1st trading day and at 5 day intervals. A solid line has been drawn on the 11th trading day.

Although the 0.5% gain for the OTC in March was the weakest on record for the 3rd year of the Presidential Cycle, up is up and the record still stands at 100% up.

Since 1928 the SPX has been up 58% of the time in April with an average return of 1.1%, however, during the 3rd year of the Presidential Cycle it has been up 78% of the time with an average return of 2.4%. The last time the SPX was down in April during the 3rd year of the Presidential Cycle was 1987.

The chart below is similar to the one above except it shows the SPX.

The Alpha Fund (APHAX)
The Alpha Fund, which I manage, opened last October.

Last week YTD
APHAX -0.2% +2.62%

For information about the fund go to: http://www.thealphafunds.com/index.htm .
The fund now has service class shares available.

Conclusion

Last weeks decline did not cause any technical problems and next week is seasonally very strong.

I expect the major indices to be higher on Thursday April 5 than they were on Friday March 30.

By Mike Burk

Mike Burke 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


© 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