Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
UK Election Seats Forecasts - Tories 326, Labour 241, SNP 40, Lib Dems 17 - 12th Dec 19
UK General Election 2019 Final Seats Per Party Forecast - 12th Dec 19
What UK CPI, RPI INFLATION Forecasts for General Election Result 2019 - 11th Dec 19
Gold ETF Holdings Surge… But Do They Actually Hold Gold? - 11th Dec 19
Gold, Silver Reversals, Lower Prices and Our Precious Profits - 11th Dec 19
Opinion Pollsters, YouGov MRP General Election 2019 Result Seats Forecast - 11th Dec 19
UK General Election Tory and Labour Marginal Seats Analysis, Implied Forecast 2019 - 11th Dec 19
UK General Election 2019 - Tory Seats Forecast Based on GDP Growth - 11th Dec 19
YouGov's MRP Poll Final Tory Seats Forecast Revised Down From 359 to 338, Possibly Lower? - 10th Dec 19
What UK Economy (Average Earnings) Predicts for General Election Results 2019 - 10th Dec 19
Labour vs Tory Manifesto's UK General Election Parliamentary Seats Forecast 2019 - 10th Dec 19
Lumber is about to rally and how to play it with this ETF - 10th Dec 19
Social Mood and Leaders Impact on General Election Forecast 2019 - 9th Dec 19
Long-term Potential for Gold Remains Strong! - 9th Dec 19
Stock and Financial Markets Review - 9th Dec 19
Labour / Tory Manifesto's Impact on UK General Election Seats Forecast 2019 - 9th Dec 19
Tory Seats Forecast 2019 General Election Based on UK House Prices Momentum Analysis - 9th Dec 19
Top Tory Marginal Seats at Risk of Loss to Labour and Lib Dems - Election 2019 - 9th Dec 19
UK House Prices Momentum Tory Seats Forecast General Election 2019 - 8th Dec 19
Why Labour is Set to Lose Sheffield Seats at General Election 2019 - 8th Dec 19
Gold and Silver Opportunity Here Is As Good As It Gets - 8th Dec 19
High Yield Bond and Transports Signal Gold Buy Signal - 8th Dec 19
Gold & Silver Stocks Belie CoT Caution - 8th Dec 19
Will Labour Government Spending Bankrupt Britain? UK Debt and Deficits - 7th Dec 19
Lib Dem Fake Tory Election Leaflets - Sheffield Hallam General Election 2019 - 7th Dec 19
You Should Be Buying Gold Stocks Now - 6th Dec 19
The End of Apple Has Begun - 6th Dec 19
How Much Crude Oil Do You Unknowingly Eat? - 6th Dec 19
Labour vs Tory Manifesto Voter Bribes Impact on UK General Election Forecast - 6th Dec 19
Gold Price Forecast – Has the Recovery Finished? - 6th Dec 19
Precious Metals Ratio Charts - 6th Dec 19
Climate Emergency vs Labour Tree Felling Councils Reality - Sheffield General Election 2019 - 6th Dec 19
What Fake UK Unemployment Statistics Predict for General Election Result 2019 - 6th Dec 19
What UK CPI, RPI and REAL INFLATION Predict for General Election Result 2019 - 5th Dec 19
Supply Crunch Coming as Silver Miners Scale Back - 5th Dec 19
Gold Will Not Surpass Its 1980 Peak - 5th Dec 19
UK House Prices Most Accurate Predictor of UK General Elections - 2019 - 5th Dec 19
7 Year Cycles Can Be Powerful And Gold Just Started One - 5th Dec 19
Lib Dems Winning Election Leaflets War Against Labour - Sheffield Hallam 2019 - 5th Dec 19
Do you like to venture out? Test yourself and see what we propose for you - 5th Dec 19
Great Ways To Make Money Over Time - 5th Dec 19
Calculating Your Personal Cost If Stock, Bond and House Prices Return To Average - 4th Dec 19

Market Oracle FREE Newsletter

UK General Election Forecast 2019

Stock Market Positive Seasonal Factors Have Ended, Heading for a Down Week

Stock-Markets / Seasonal Trends Dec 05, 2009 - 07:50 AM GMT

By: Mike_Burk

Stock-Markets

Best Financial Markets Analysis ArticleThe good news is: • The Dow Jones Industrial Average hit new recovery high last Monday.

Short Term - Seasonality has not been very influential for the past 3.5 years (mid 2006).


But, the end of month - beginning of month periods of October - November - December - January are some of the strongest and they appear to be exerting some influence.

I have been showing charts illustrating a strong cyclical pattern that emerged around the 1st of September. The down leg of that pattern was truncated last week. I think it was caused by the strong, positive seasonal bias usually seen around Thanksgiving and early December. If this theory is correct, the strong seasonal period is over and next week has a history of being weak.

The chart below is an update of one I showed last week covering the past 6 months showing the NASDAQ 100 (NDX) in red and momentum of new highs of the component issues of the NDX in green. For this indicator new highs have been calculated over the trailing 3 weeks rather than 52 weeks as reported by the exchanges. Dashed vertical lines have been drawn on the 1st trading day of each month.

The downward move in the indicator was cut a little short last week.

Intermediate term

There are unlikely to be any severe problems as long as the number of new highs exceeds the number of new lows.

The next 2 charts are updates of ones shown last week covering the past 189 trading days (from the March low) showing the NASDAQ composite (OTC) in blue and a 40% trend (4 day EMA) of the ratio of NASDAQ new highs to new lows (OTC HL Ratio) in red. OTC HL Ratio is calculated by dividing the number of new highs by new highs plus new lows. Dashed horizontal lines have been drawn at 10% levels of the indicator; the line is solid at the neutral 50% level.

The next chart is similar to the one above except it shows the S&P 500 (SPX) in red and the indicator has been calculated from NYSE data. The pattern is similar and a little stronger.

Reality is not quite as delightful and charts above might suggest.

The chart below shows the OTC in blue and a 10% trend of NASDAQ new highs (OTC NH) in green. OTC NH is well off its mid October high and slightly off the lower mid November high.

The next chart is similar to the one above except is shows the SPX in red and NY NH has been calculated from NYSE data.

Seasonality

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

The tables below show the return on a percentage basis for the 5 trading days prior to the 2nd Friday of December during the 1st year of the Presidential Cycle. OTC data covers the period from 1963 - 2008 and 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.

Average returns over all years have been modestly positive, however, during the 1st year of the Presidential returns have been decidedly negative.

Report for the week before the 2nd Friday of December. 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 -0.30% 0.14% 1.31% 1.02% 0.80% 2.97%
 
1969-1 -0.66% -1.02% -0.32% 0.28% 0.60% -1.13%
1973-1 1.32% -1.43% -1.51% -1.86% 0.57% -2.91%
1977-1 0.05% -1.13% -0.12% 0.20% 0.49% -0.50%
1981-1 -0.58% -0.79% 0.08% 0.32% -0.14% -1.12%
1985-1 0.09% 0.13% 0.49% 0.54% 1.06% 2.32%
Avg 0.04% -0.85% -0.27% -0.10% 0.52% -0.67%
 
1989-1 0.26% 0.06% -0.41% -0.08% -0.02% -0.19%
1993-1 -0.15% -0.23% -0.19% -0.83% -0.10% -1.49%
1997-1 1.08% -1.87% -1.48% -2.39% -1.41% -6.07%
2001-1 -1.44% 0.49% 0.47% -3.23% 0.34% -3.36%
2005-1 -0.69% 0.14% -0.39% -0.25% 0.46% -0.73%
Avg -0.19% -0.28% -0.40% -1.35% -0.14% -2.37%
 
OTC summary for Presidential Year 1 1965 - 2005
Avg -0.09% -0.50% -0.19% -0.57% 0.24% -1.11%
Win% 45% 45% 36% 45% 64% 18%
 
OTC summary for all years 1963 - 2008
Avg 0.15% 0.05% 0.01% -0.38% 0.24% 0.06%
Win% 61% 50% 53% 46% 57% 52%
 
SPX Presidential Year 1
Year Mon Tue Wed Thur Fri Totals
1953-1 -0.12% -0.32% -0.12% -0.24% -0.08% -0.88%
1957-1 -0.94% -0.88% -0.12% 0.10% 0.44% -1.40%
1961-1 0.32% -0.11% 0.08% -0.40% 0.47% 0.36%
1965-1 -0.75% 0.88% -0.12% 0.31% 0.26% 0.59%
 
1969-1 -1.20% -0.09% -0.08% 0.04% 0.32% -1.00%
1973-1 1.49% -1.95% -2.57% -1.27% 0.99% -3.32%
1977-1 -0.42% -1.53% -0.05% 0.19% 0.74% -1.07%
1981-1 -0.85% -0.30% 0.53% 0.18% -0.62% -1.05%
1985-1 0.62% 0.07% 0.94% 0.20% 1.55% 3.38%
Avg -0.07% -0.76% -0.25% -0.13% 0.60% -0.61%
 
1989-1 0.22% -0.52% -0.29% -0.28% 0.32% -0.55%
1993-1 0.33% 0.07% -0.10% -0.45% -0.05% -0.21%
1997-1 -0.14% -0.67% -0.61% -1.53% -0.16% -3.12%
2001-1 -1.59% -0.28% 0.03% -1.56% 0.33% -3.06%
2005-1 -0.24% 0.13% -0.50% -0.12% 0.28% -0.45%
Avg -0.28% -0.25% -0.30% -0.79% 0.14% -1.48%
 
SPX summary for Presidential Year 1 1953 - 2005
Avg -0.23% -0.39% -0.21% -0.34% 0.34% -0.84%
Win% 36% 29% 29% 43% 71% 21%
 
SPX summary for all years 1953 - 2008
Avg 0.19% 0.01% 0.02% -0.30% 0.20% 0.13%
Win% 59% 45% 51% 39% 66% 54%

Money Supply (M2)

The money supply chart was provided by Gordon Harms. Money supply growth has stalled below the elevated trend of recent years.

Conclusion

For the past 2 weeks, I think, the market has been dominated by positive seasonal factors which have ended. If that theory is correct next week should be down.

I expect the major indices to be lower on Friday December 11 than they were on Friday December 4.

This report is free to anyone who wants it, so please tell your friends. They can sign up at: http://alphaim.net/signup.html.

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