Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stocks, Bitcoin and Crypto Markets Breaking Bad on Donald Trump Pump - 21st Nov 24
Gold Price To Re-Test $2,700 - 21st Nov 24
Stock Market Sentiment Speaks: This Is My Strong Warning To You - 21st Nov 24
Financial Crisis 2025 - This is Going to Shock People! - 21st Nov 24
Dubai Deluge - AI Tech Stocks Earnings Correction Opportunities - 18th Nov 24
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Weekly Stock Market Technical Analysis Report - 12th May 07

Stock-Markets / US Stock Markets May 12, 2007 - 11:58 AM GMT

By: Mike_Burk

Stock-Markets

The good news is: Most of the major indices hit multi year or all time highs last week.

Short Term
Most of the market run up since last summer has been marked by a lack of sellers not exuberant buyers. It looks like the sellers are returning.

The chart below covers the past year showing the NASDAQ composite (OTC) in orange and a 5% trend (39 day EMA) of NASDAQ downside volume (OTC DV) in brown. OTC DV has been plotted on an inverted Y axis so decreasing downside volume moves the indicator upward (up is good).


OTC DV has been steadily increasing (the indicator has been moving downward) since its peak last September and the move appears to be accelerating.

Intermediate term

Market cycles can be defined by new lows.

From a bottom, new lows diminish quickly indicating a new upward move is beginning. New lows begin to increase near a top indicating support for the upward move is declining. Rules of thumb for NYSE and NASDAQ new lows suggest there should be little concern until NYSE new lows exceed 40 for several days and NASDAQ new lows exceed 70 for several days.

The chart below covers the past 9 months showing the NASDAQ composite (OTC) in orange and a10% trend (19 day EMA) of NASDAQ new lows (OTC NL) in grey. Like the first chart, OTC NL has been plotted on an inverted Y axis so decreasing new lows move the indicator upward. Dashed vertical lines have been drawn on the 1st trading day of each month, the line is red on the 1st trading day of the year.

NASDAQ new lows exceeded 70 on the last day of April and 1st day of May, but have otherwise stayed below the threat threshold of 70. Still OTC NL has been trending downward (increasing new lows) since the 1st of this year.

Seasonality

Next week includes the 5 trading days ahead of the 3rd Friday of May during the 3rd year of the Presidential Cycle.

The tables below show the week ahead of the 3rd Friday in May for the OTC from 1963 - 2003 and the S&P500 (SPX) from 1955 - 2003 during the 3rd year of the Presidential Cycle. The market traded 6 days a week prior to 1953 so that data has been ignored.

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

Seasonally, next week has little to recommend it.

Both the OTC and SPX have been up less than 50% of the time and have had average negative returns. Over all years both indices have been up 50% of the time with the OTC average return slightly negative and the SPX average return slightly positive.

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

OTC Presidential Year 3
Year Mon Tue Wed Thur Fri Totals
1963-3 -0.06% 0.09% 0.06% 0.18% -0.06% 0.21%
1967-3 -0.35% -0.52% 0.78% 0.23% 0.03% 0.16%
1971-3 -1.44% -0.69% -0.06% 0.36% 0.12% -1.71%
1975-3 -0.63% 1.28% -0.53% -0.14% -0.42% -0.45%
1979-3 -0.54% 0.02% 0.26% 0.84% 0.44% 1.02%
1983-3 -1.43% 0.47% 0.83% -0.23% 0.24% -0.11%
Avg -0.88% 0.11% 0.26% 0.21% 0.08% -0.22%
1987-3 -0.24% -0.39% 0.33% 0.18% -0.89% -1.01%
1991-3 0.10% -1.04% -2.19% 0.77% -0.08% -2.44%
1995-3 0.48% 0.60% 0.42% -0.90% 0.06% 0.66%
1999-3 1.34% -0.13% 0.74% -1.37% -0.87% -0.28%
2003-3 1.40% -0.11% -0.31% 1.07% -0.83% 1.22%
Avg 0.62% -0.21% -0.20% -0.05% -0.52% -0.37%
OTC summary for Presidential Year 3 1963 - 2003
Avg -0.12% -0.04% 0.03% 0.09% -0.21% -0.25%
Win% 36% 45% 64% 64% 45% 45%
OTC summary for all years 1963 - 2006
Avg -0.03% 0.09% 0.09% 0.04% -0.26% -0.08%
Win% 48% 48% 59% 52% 42% 50%
SPX Presidential Year 3
Year Mon Tue Wed Thur Fri Totals
1955-3 -1.12% -0.14% 0.84% 0.56% 0.67% 0.81%
1959-3 0.42% 0.16% 0.56% 0.69% -0.36% 1.46%
1963-3 -0.06% -0.38% 0.31% -0.26% 0.06% -0.33%
1967-3 -0.82% 0.46% -0.39% -0.27% -0.50% -1.51%
1971-3 -1.49% 0.14% 0.24% 0.24% -0.32% -1.19%
1975-3 0.09% 1.07% 0.75% -0.93% -1.07% -0.09%
1979-3 -0.47% 0.08% 0.29% 1.54% -0.01% 1.43%
1983-3 -0.91% 0.19% -0.27% -0.78% 0.09% -1.68%
Avg -0.72% 0.39% 0.12% -0.04% -0.36% -0.61%
1987-3 -0.61% 0.59% 0.23% 0.09% -2.31% -2.01%
1991-3 0.27% -1.36% -0.82% 0.98% 0.05% -0.88%
1995-3 0.42% 0.09% -0.21% -1.42% -0.08% -1.21%
1999-3 0.13% -0.46% 0.82% -0.39% -0.64% -0.55%
2003-3 1.25% -0.30% -0.32% 0.79% -0.25% 1.17%
Avg 0.29% -0.29% -0.06% 0.01% -0.65% -0.70%
SPX summary for Presidential Year 3 1955 - 2003
Avg -0.22% 0.01% 0.16% 0.06% -0.36% -0.35%
Win% 46% 62% 62% 54% 31% 31%
SPX summary for all years 1953 - 2006
Avg 0.00% 0.11% 0.08% -0.01% -0.15% 0.03%
Win% 51% 57% 50% 52% 48% 50%

 

Mutual Fund

Compliance issues demand that I not mention the mutual fund that I manage by name or symbol in this letter.

To see a current chart of the fund go to: http://finance.yahoo.com/q/bc?s=APHAX&t=3m

For information about the fund go to: http://www.thealphafunds.com/index.htm

The fund now has service class shares available.

Conclusion

Most of the internal market indicators have been deteriorating and seasonality for next week offers no support.

I expect the major indices to be lower on Friday May 18 than they were on Friday May 11.

Last week the large cap indices were up slightly and the small cap indices were down slightly so I am calling last weeks negative forecast a tie.

By Mike Burk
To subscribe to this report : http://alphaim.net/signup.html

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.


© 2005-2022 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