Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
UK Covd-19 FREE Lateral Flow Self Testing Kits How Use for the First Time at Home - 10th Apr 21
NVIDIA Stock ARMED and Dangeorus! - 10th Apr 21
The History of Bitcoin Hard Forks - 10th Apr 21
Gold Mining Stocks: A House Built on Shaky Ground - 9th Apr 21
Stock Market On the Verge of a Pullback - 9th Apr 21
What Is Bitcoin Unlimited? - 9th Apr 21
Most Money Managers Gamble With Your Money - 9th Apr 21
Top 5 Evolving Trends For Mobile Casinos - 9th Apr 21
Top 5 AI Tech Stocks Investing 2021 Analysis - 8th Apr 21
Dow Stock Market Trend Forecast 2021 - Crash or Continuing Bull Run? - 8th Apr 21
Don’t Be Fooled by the Stock Market Rally - 8th Apr 21
Gold and Latin: Twin Pillars of Western Rejuvenation - 8th Apr 21
Stronger US Dollar Reacts To Global Market Concerns – Which ETFs Will Benefit? Part II - 8th Apr 21
You're invited: Spot the Next BIG Move in Oil, Gas, Energy ETFs - 8th Apr 21
Ladies and Gentlemen, Mr US Dollar is Back - 8th Apr 21
Stock Market New S&P 500 Highs or Metals Rising? - 8th Apr 21
Microsoft AI Azure Cloud Computing Driving Tech Giant Profits - 7th Apr 21
Amazon Tech Stock PRIMEDAY SALE- 7th Apr 21
The US has Metals Problem - Lithium, Graphite, Copper, Nickel Supplies - 7th Apr 21
Yes, the Fed Will Cover Biden’s $4 Trillion Deficit - 7th Apr 21
S&P 500 Fireworks and Gold Going Stronger - 7th Apr 21
Stock Market Perceived Vs. Actual Risks: The Key To Success - 7th Apr 21
Investing in Google Deep Mind AI 2021 (Alphabet) - 6th Apr 21
Which ETFs Will Benefit As A Stronger US Dollar Reacts To Global Market Concerns - 6th Apr 21
Staying Out of the Red: Financial Tips for Kent Homeowners - 6th Apr 21
Stock Market Pushing Higher - 6th Apr 21
Inflation Fears Rise on Biden’s $3.9 TRILLION in Deficit Spending - 6th Apr 21
Editing and Rendering Videos Whilst Background Crypto Mining Bitcoins with NiceHash, Davinci Resolve - 5th Apr 21
Why the Financial Gurus Are WRONG About Gold - 5th Apr 21
Will Biden’s Infrastructure Plan Rebuild Gold? - 5th Apr 21
Stocks All Time Highs and Gold Double Bottom - 5th Apr 21
All Tech Stocks Revolve Around This Disruptor - 5th Apr 21
Silver $100 Price Ahead - 4th Apr 21
Is Astra Zeneca Vaccine Safe? Risk of Blood Clots and What Side Effects During 8 Days After Jab - 4th Apr 21
Are Premium Bonds A Good Investment in 2021 vs Savings, AI Stocks and Housing Alternatives - 4th Apr 21
Penny Stocks Hit $2 Trillion - The Real Story Behind This "Road to Riches" Scheme - 4th Apr 21
Should Stock Markets Fear Inflation or Deflation? - 4th Apr 21
Dow Stock Market Trend Forecast 2021 - 3rd Apr 21
Gold Price Just Can’t Seem to Breakout - 3rd Apr 21
Stocks, Gold and the Troubling Yields - 3rd Apr 21
What can you buy with cryptocurrencies?- 3rd Apr 21
What a Long and Not so Strange Trip it’s Been for the Gold Mining Stocks - 2nd Apr 21
WD My Book DUO 28tb Unboxing - What Drives Inside the Enclosure, Reds or Blues Review - 2nd Apr 21
Markets, Mayhem and Elliott Waves - 2nd Apr 21
Gold And US Dollar Hegemony - 2nd Apr 21
What Biden’s Big Infrastructure Push Means for Silver Price - 2nd Apr 21
Stock Market Support Near $14,358 On Transportation Index Suggests Rally Will Continue - 2nd Apr 21
Crypto Mine Bitcoin With Your Gaming PC - How Much Profit after 3 Weeks with NiceHash, RTX 3080 GPU - 2nd Apr 21
UK Lockdowns Ending As Europe Continues to Die, Sweet Child O' Mine 2021 Post Pandemic Hope - 2nd Apr 21
A Climbing USDX Means Gold Investors Should Care - 1st Apr 21
How To Spot Market Boom and Bust Cycles - 1st Apr 21
What Could Slay the Stock & Gold Bulls - 1st Apr 21
Precious Metals Mining Stocks Setting Up For A Breakout Rally – Wait For Confirmation - 1st Apr 21
Fed: “We’re Not Going to Take This Punchbowl Away” - 1st Apr 21
Mining Bitcoin On My Desktop PC For 3 Weeks - How Much Crypto Profit Using RTX 3080 on NiceHash - 31st Mar 21
INFLATION - Wage Slaves vs Gold Owners - 31st Mar 21
Why It‘s Reasonable to Be Bullish Stocks and Gold - 31st Mar 21
How To Be Eligible For An E-Transfer Payday Loan? - 31st Mar 21
eXcentral Review – Trade CFDs with a Customer-Centric Broker - 31st Mar 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Stock Market Short-term Overbought

Stock-Markets / US Stock Markets May 31, 2008 - 02:20 PM GMT

By: Mike_Burk

Stock-Markets

The good news is: The small cap indices hit new recovery highs last Friday.

Short Term : The market is over bought.

As of Friday all of the major indices were up for 4 consecutive days.


The chart below covers the past 6 months showing the S&P 500 (SPX) in red and an indicator showing the percentage of the last 4 trading days that were up in green. Dashed vertical lines have been drawn on the 1st trading day of the month.

In the past 6 months each of the previous occurrences of 4 consecutive up days has been followed by a pull back.

Intermediate Term

New highs usually increase when the indices rise. That did not happen last week.

The chart below covers this year showing the SPX in red and a 10% trend (19 day EMA) of NYSE new highs (NY NH) in green. NY NH fell during last weeks rally.

The Russell 2000 (R2K) index rose over 3% to a new recovery high last week, but a new high indicator calculated from the component issues of the R2K did not.

The chart below covers this year showing the R2K in red and a 10% trend of R2K component issues hitting 6 week highs in green.

The blue chips did not do any better.

The next chart is similar to the one above except the index, in red, is the SPX and the indicator has been calculated from the component issues of the SPX.

It is encouraging to see the small cap indices and indicators outperforming their large cap counterparts. But, with the indicators deteriorating, the intermediate term future does not look encouraging.

Seasonality

Next week includes the first 5 trading days of June during the 4th year of the Presidential Cycle.

The tables show the daily return on a percentage basis for the first 5 trading days of June during the 4th year of the Presidential Cycle. NASDAQ (OTC) data covers the period from 1963 – 2007 and SPX data from 1928 to 2007. There are summaries for both the 4th year of the Presidential Cycle and all years combined.

The huge gain in 2000 skews the OTC results positively.

The OTC has been up about 2/3 of the time and without 2000 the average OTC gain has been about 1%. The SPX has been up a little over ½ of the time with an average gain of about 0.5%.

First 5 days of June.
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 4
Day1 Day2 Day3 Day4 Day5 Totals
1964-4 -0.08% 1 -0.15% 2 -0.10% 3 -0.10% 4 -0.49% 5 -0.92%
1968-4 0.87% 1 0.69% 2 1.06% 3 0.32% 4 1.14% 5 4.08%
1972-4 0.45% 4 0.29% 5 -0.58% 1 -0.56% 2 -0.76% 3 -1.15%
1976-4 -0.26% 2 0.40% 3 0.11% 4 -0.58% 5 -0.60% 1 -0.93%
1980-4 -0.19% 1 -0.17% 2 0.86% 3 0.66% 4 0.31% 5 1.48%
1984-4 1.32% 5 1.21% 1 -0.13% 2 0.44% 3 0.17% 4 3.01%
Avg 0.44% 0.49% 0.26% 0.06% 0.05% 1.30%
1988-4 1.21% 3 -0.04% 4 0.59% 5 0.77% 1 -0.11% 2 2.41%
1992-4 0.52% 1 0.14% 2 0.13% 3 -0.28% 4 -0.48% 5 0.02%
1996-4 -0.38% 1 0.40% 2 0.44% 3 -1.34% 4 -0.22% 5 -1.09%
2000-4 5.34% 4 6.45% 5 0.22% 1 -1.71% 2 2.21% 3 12.50%
2004-4 0.20% 2 -0.09% 3 -1.44% 4 0.94% 5 2.12% 1 1.73%
Avg 1.38% 1.37% -0.01% -0.33% 0.70% 3.11%
OTC summary for Presidential Year 4 1964 - 2004
Averages 0.82% 0.83% 0.10% -0.13% 0.30% 1.92%
% Winners 64% 64% 64% 45% 45% 64%
MDD 6/7/1972 1.89% -- 6/6/2000 1.71% -- 6/7/1996 1.55%
OTC summary for all years 1963 - 2007
Averages 0.28% 0.36% 0.18% 0.05% 0.11% 0.97%
% Winners 61% 71% 60% 56% 53% 64%
MDD 6/7/2002 4.97% -- 6/6/1967 3.90% -- 6/7/2006 3.07%
SPX Presidential Year 4
Day1 Day2 Day3 Day4 Day5 Totals
1928-4 0.35% 5 0.75% 6 -2.00% 1 0.25% 2 -0.96% 3 -1.61%
1932-4 -1.57% 3 2.00% 4 2.00% 5 2.00% 6 -2.00% 1 2.43%
1936-4 -0.07% 1 0.00% 2 -0.35% 3 -1.46% 4 -0.07% 5 -1.95%
1940-4 -0.43% 6 -1.30% 1 1.32% 2 -1.52% 3 1.43% 4 -0.50%
1944-4 -0.32% 4 -0.08% 5 0.08% 6 -0.65% 1 0.65% 2 -0.32%
Avg -0.41% 0.27% 0.21% -0.28% -0.19% -0.39%
1948-4 0.30% 2 0.12% 3 -0.24% 4 -0.78% 5 -0.30% 1 -0.90%
1952-4 -0.25% 1 -0.08% 2 0.71% 3 0.63% 4 0.66% 5 1.67%
1956-4 0.84% 5 0.59% 1 0.02% 2 -0.50% 3 0.79% 4 1.74%
1960-4 0.11% 3 0.43% 4 0.18% 5 1.17% 1 0.95% 2 2.84%
1964-4 -0.32% 1 -0.51% 2 -0.26% 3 -1.03% 4 0.44% 5 -1.69%
Avg 0.13% 0.11% 0.08% -0.10% 0.51% 0.73%
1968-4 1.33% 1 0.39% 2 -0.49% 3 0.76% 4 0.62% 5 2.61%
1972-4 0.15% 4 0.04% 5 -0.83% 1 -0.56% 2 -0.52% 3 -1.72%
1976-4 -0.33% 2 0.37% 3 -0.09% 4 -0.98% 5 -0.52% 1 -1.55%
1980-4 -0.43% 1 -0.23% 2 1.90% 3 0.15% 4 0.37% 5 1.77%
1984-4 1.79% 5 0.72% 1 -0.45% 2 0.89% 3 -0.06% 4 2.88%
Avg 0.50% 0.26% 0.01% 0.05% -0.02% 0.80%
1988-4 1.73% 3 -0.51% 4 0.42% 5 0.23% 1 -0.70% 2 1.16%
1992-4 0.47% 1 -0.91% 2 0.26% 3 -0.32% 4 0.05% 5 -0.45%
1996-4 -0.22% 1 0.73% 2 0.87% 3 -0.80% 4 0.04% 5 0.63%
2000-4 1.99% 4 1.97% 5 -0.66% 1 -0.67% 2 0.93% 3 3.56%
2004-4 0.05% 2 0.34% 3 -0.74% 4 0.52% 5 1.60% 1 1.76%
Avg 0.80% 0.32% 0.03% -0.21% 0.38% 1.33%
SPX summary for Presidential Year 4 1928 - 2004
Averages 0.26% 0.24% 0.08% -0.13% 0.17% 0.62%
% Winners 55% 60% 50% 45% 60% 55%
MDD 6/6/1928 2.69% -- 6/4/1964 2.12% -- 6/6/1932 2.00%
SPX summary for all years 1928 - 2007
Averages 0.05% 0.15% 0.14% 0.12% 0.03% 0.48%
% Winners 51% 62% 54% 53% 51% 59%
MDD 6/6/1930 3.96% -- 6/2/1931 3.58% -- 6/7/2002 3.24%

 

Money supply (M2)

The chart below was supplied by Gordon Harms. After a bulge in March, money supply growth has fallen back to the elevated trend than began in late 2006. Declining money supply growth is usually not good for the stock market.

June

Over all years the OTC has been up 53% of the time with an average gain of 0.5%. That makes it the 10th strongest month of the year, ahead of February and July. During the 4th year of the Presidential Cycle the OTC has been up 73% of the time with an average gain of 1.8% putting it in a tie with September and November as the strongest month of the year.

The chart below shows an average June for all years in blue and the 4th year of the Presidential Cycle in green. The average month has 21 trading days. The chart has been calculated by averaging the return of the 1st 11 trading days of the month and the last 10. Dashed vertical lines have been drawn on the 1st trading day of the month and at 5 trading day intervals after that. The line is solid on the 11th trading day, the dividing point.

Over all years the SPX has been up 54% of the time with an average gain of 1.0% making June the 5th strongest month of the year. During the 4th year of the Presidential Cycle the SPX has been up 74% of the time with an average gain of 1.7% making June the strongest month of the 4th year.

Conclusion

The market is over bought but seasonally next week has a positive bias.

I expect the major indices to be lower on Friday June 6 than they were on Friday May 30.

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