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
Silver Bull Market Update - 7th Aug 20
This Inflation-Adjusted Silver Chart Tells An Interesting Story - 7th Aug 20
The Great American Housing Boom Has Begun - 7th Aug 20
NATURAL GAS BEGINS UPSIDE BREAKOUT MOVE - 7th Aug 20
Know About Lotteries With The Best Odds Of Winning - 7th Aug 20
Could Gold Price Reach $7,000 by 2030? - 6th Aug 20
Bananas for All! Keep Dancing… FOMC - 6th Aug 20
How to Do Bets During This Time - 6th Aug 20
How to develop your stock trading strategy - 6th Aug 20
Stock Investors What to do if Trump Bans TikTok - 5th Aug 20
Gold Trifecta of Key Signals for Gold Mining Stocks - 5th Aug 20
ARE YOU LOVING YOUR SERVITUDE? - 5th Aug 20
Stock Market Uptrend Continues? - 4th Aug 20
The Dimensions of Covid-19: The Hong Kong Flu Redux - 4th Aug 20
High Yield Junk Bonds Are Hot Again -- Despite Warning Signs - 4th Aug 20
Gold Stocks Autumn Rally - 4th Aug 20
“Government Sachs” Is Worried About the Federal Reserve Note - 4th Aug 20
Gold Miners Still Pushing That Cart of Rocks Up Hill - 4th Aug 20
UK Government to Cancel Christmas - Crazy Covid Eid 2020! - 4th Aug 20
Covid-19 Exposes NHS Institutional Racism Against Black and Asian Staff and Patients - 4th Aug 20
How Sony Is Fueling the Computer Vision Boom - 3rd Aug 20
Computer Gaming System Rig Top Tips For 6 Years Future Proofing Build Spec - 3rd Aug 20
Cornwwall Bude Caravan Park Holidays 2020 - Look Inside Holiday Resort Caravan - 3rd Aug 20
UK Caravan Park Holidays 2020 Review - Hoseasons Cayton Bay North East England - 3rd Aug 20
Best Travel Bags for 2020 Summer Holidays , Back Sling packs, water proof, money belt and tactical - 3rd Aug 20
Precious Metals Warn Of Increased Volatility Ahead - 2nd Aug 20
The Key USDX Sign for Gold and Silver - 2nd Aug 20
Corona Crisis Will Have Lasting Impact on Gold Market - 2nd Aug 20
Gold & Silver: Two Pictures - 1st Aug 20
The Bullish Case for Stocks Isn't Over Yet - 1st Aug 20
Is Gold Price Action Warning Of Imminent Monetary Collapse - Part 2? - 1st Aug 20
Will America Accept the World's Worst Pandemic Response Government - 1st Aug 20
Stock Market Technical Patterns, Future Expectations and More – Part II - 1st Aug 20
Trump White House Accelerating Toward a US Dollar Crisis - 31st Jul 20
Why US Commercial Real Estate is Set to Get Slammed - 31st Jul 20
Gold Price Blows Through Upside Resistance - The Chase Is On - 31st Jul 20
Is Crude Oil Price Setting Up for a Waterfall Decline? - 31st Jul 20
Stock Market Technical Patterns, Future Expectations and More - 30th Jul 20
Why Big Money Is Already Pouring Into Edge Computing Tech Stocks - 30th Jul 20
Economic and Geopolitical Worries Fuel Gold’s Rally - 30th Jul 20
How to Finance an Investment Property - 30th Jul 20
I Hate Banks - Including Goldman Sachs - 29th Jul 20
NASDAQ Stock Market Double Top & Price Channels Suggest Pending Price Correction - 29th Jul 20
Silver Price Surge Leaves Naysayers in the Dust - 29th Jul 20
UK Supermarket Covid-19 Shop - Few Masks, Lack of Social Distancing (Tesco) - 29th Jul 20
Budgie Clipped Wings, How Long Before it Can Fly Again? - 29th Jul 20
How To Take Advantage Of Tesla's 400% Stock Surge - 29th Jul 20
Gold Makes Record High and Targets $6,000 in New Bull Cycle - 28th Jul 20
Gold Strong Signal For A Secular Bull Market - 28th Jul 20
Anatomy of a Gold and Silver Precious Metals Bull Market - 28th Jul 20
Shopify Is Seizing an $80 Billion Pot of Gold - 28th Jul 20
Stock Market Minor Correction Underway - 28th Jul 20
Why College Is Never Coming Back - 27th Jul 20
Stocks Disconnect from Economy, Gold Responds - 27th Jul 20
Silver Begins Big Upside Rally Attempt - 27th Jul 20
The Gold and Silver Markets Have Changed… What About You? - 27th Jul 20
Google, Apple And Amazon Are Leading A $30 Trillion Assault On Wall Street - 27th Jul 20
This Stock Market Indicator Reaches "Lowest Level in Nearly 20 Years" - 26th Jul 20
New Wave of Economic Stimulus Lifts Gold Price - 26th Jul 20
Stock Market Slow Grind Higher Above the Early June Stock Highs - 26th Jul 20
How High Will Silver Go? - 25th Jul 20
If You Own Gold, Look Out Below - 25th Jul 20
Crude Oil and Energy Sets Up Near Major Resistance – Breakdown Pending - 25th Jul 20
FREE Access to Premium Market Forecasts by Elliott Wave International - 25th Jul 20
The Promise of Silver as August Approaches: Accumulation and Conversation - 25th Jul 20
The Silver Bull Gateway is at Hand - 24th Jul 20
The Prospects of S&P 500 Above the Early June Highs - 24th Jul 20
How Silver Could Surpass Its All-Time High - 24th Jul 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Stock Markets Putting in a Significant Low

Stock-Markets / US Stock Markets Jun 14, 2008 - 12:47 PM GMT

By: Mike_Burk

Stock-Markets

The good news is: We are going into a bottom that is likely to be the final low for the decline that began last July.

Short Term - Last Wednesday's low is not likely to hold. Many indicators look like the one shown below, that is, they confirmed last Wednesday's low while they did not confirm short term lows earlier this year.


The chart covers the past 6 months showing the Russell 2000 (R2K) in red and an oscillator of upside - downside volume of the component issues of the R2K in black. Dashed vertical lines have been drawn on the 1st trading day of each month.

I have drawn a dark line at previous indicator and price lows showing how the indicator was making a higher low as the index went to a lower low. Last Wednesday the indicator hit its lowest level in several months suggesting prices will, at least, return to last Wednesday's levels.

The next chart covers the past 2 years showing the S&P 500 (SPX) in red and an Advance - Decline line (ADL) calculated from the component issues of the SPX in black. ADL's are a running total of advancing - declining issues. The ADL rose in every rally of the past 2 years except the rally off the March lows. The last time we saw this kind of behavior in this indicator was in early 2000.

Intermediate Term

Near the low last August there were 1132 new lows on the NYSE, at the January low there were 1114 new lows and at the March low there were 759 new lows. At each of those points I pointed out there was a high likelihood of a retest because of the high number of new lows. Those statements were made based on research I had done with NYSE new lows and the Dow Jones Industrial Average (DJIA). Last Wednesday the DJIA closed 2.9% above its March low and there were 235 new lows on the NYSE. It appears likely the DJIA will retest its March lows and unlikely there will be enough new lows to suggest another retest.

The chart below covers the past year showing the DJIA in red and a 10% trend (19 day EMA) of NYSE new lows (NY NL) in blue. NY NL has been plotted on an inverted Y axis so decreasing new lows move the indicator upward (up is good). NY NL hit its lowest low for the period last August, came close to the previous low in January, made a much higher low in March and is likely to be higher yet if the DJIA retests its March low.

Unless things get a lot worse, very soon, it appears the market is developing a bottom that should hold for quite a while.

Seasonality

Next week includes the 5 trading days prior to the 3rd Friday in June during the 4th year of the Presidential Cycle.

The tables show the daily return on a percentage basis for the 5 trading days prior to the 3rd Friday in June during the 4th year of the Presidential Cycle. NASDAQ composite (OTC) data covers the period from 1963 - 2007 and SPX data from 1953 - 2007. There are summaries for both the 4th year of the Presidential Cycle and all years combined. Prior to 1953 the market traded 6 days a week so that data has been ignored.

Over the coming week the OTC has had modest losses over all periods while the SPX has for all practical purposes been flat.

Report for the week before the 3rd Friday of June
The number following the year is the position in the presidential cycle.
Daily returns from Monday through 3rd Friday.

OTC Presidential Year 4
Year Mon Tue Wed Thur Fri Totals
1964-4 -0.13% 0.18% 0.46% 0.69% 0.05% 1.25%
1968-4 -0.34% -1.15% 0.00% -0.76% -0.14% -2.40%
1972-4 -0.15% 0.31% 0.51% -0.12% -0.01% 0.54%
1976-4 0.79% 0.06% 0.54% 0.89% 0.37% 2.64%
1980-4 0.13% 0.12% 0.13% -0.29% -0.14% -0.05%
1984-4 -0.93% -0.45% 0.31% -0.91% 0.01% -1.97%
Avg -0.10% -0.22% 0.38% -0.24% 0.02% -0.25%
1988-4 0.14% 0.44% 0.14% -0.51% -0.05% 0.18%
1992-4 -0.09% -0.87% -1.92% -0.74% 0.92% -2.70%
1996-4 -0.42% -2.07% -0.51% -0.83% 0.69% -3.14%
2000-4 -2.76% 2.21% -1.39% 1.27% 0.39% -0.29%
2004-4 -0.62% 1.00% 1.35% -0.27% 0.49% 1.95%
Avg -0.75% 0.14% -0.47% -0.21% 0.49% -0.80%
OTC summary for Presidential Year 4 1964 - 2004
Avg -0.40% -0.02% -0.04% -0.14% 0.23% -0.36%
Win% 27% 64% 70% 27% 64% 45%
OTC summary for all years 1963 - 2007
Avg -0.15% 0.03% 0.10% -0.06% 0.02% -0.06%
Win% 42% 58% 66% 45% 59% 53%
SPX Presidential Year 4
Year Mon Tue Wed Thur Fri Totals
1956-4 1.26% 1.42% 0.13% -0.24% 0.13% 2.71%
1960-4 0.03% -0.14% -0.59% -0.12% -0.10% -0.92%
1964-4 0.46% 0.54% 0.51% -0.02% 0.12% 1.61%
1968-4 -0.99% -0.14% 0.00% 0.52% 0.15% -0.46%
1972-4 0.14% 0.50% 0.78% 0.05% -0.07% 1.40%
1976-4 1.02% -0.48% 0.54% 1.57% 0.14% 2.80%
1980-4 0.24% -0.05% 0.20% -1.38% -0.52% -1.51%
1984-4 -1.36% -0.57% -0.04% -1.14% -0.90% -4.02%
Avg -0.19% -0.15% 0.37% -0.08% -0.24% -0.36%
1988-4 0.06% 1.06% 0.05% -1.71% 0.34% -0.19%
1992-4 0.13% -0.48% -1.48% -0.32% 0.68% -1.48%
1996-4 -0.10% -0.47% -0.02% 0.02% 0.72% 0.15%
2000-4 -0.75% 1.62% 0.07% 0.55% -0.95% 0.54%
2004-4 -0.42% 0.36% 0.85% -0.30% -0.55% -0.04%
Avg -0.22% 0.42% -0.10% -0.35% 0.05% -0.21%
SPX summary for Presidential Year 4 1956 - 2004
Avg -0.02% 0.24% 0.08% -0.19% -0.06% 0.04%
Win% 62% 46% 67% 38% 54% 46%
SPX summary for all years 1953 - 2007
Avg -0.02% 0.10% 0.07% -0.19% 0.00% -0.04%
Win% 58% 55% 52% 42% 57% 53%

 

Money supply (M2)

The chart below has been provided by Gordon Harms. Money supply growth peaked in March and has since fallen to its lowest level in several years.

Conclusion

The market appears to be putting in a bottom that should hold for quite a while.

I expect the major indices to be lower on Friday June 19 than they were on Friday June 13.

Last week the DJIA was up a little while all of the other major indices were down so I am calling last weeks negative forecast a tie.

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