Report for the week before the 4th Friday of September.
The number following the year is the position in the Presidential Cycle.
Daily returns from Monday through the 4th Friday.

OTC Presidential Year 1
 Year       Mon     Tue     Wed    Thur    Fri    Totals
 1965-1   0.30%   0.26%  -0.22%   0.26%  -0.69%  -0.09%
 1969-1   0.40%   0.41%   0.77%  -0.17%  -0.27%   1.14%
 1973-1   0.21%   0.10%   0.75%   0.59%  -0.06%   1.58%

 1977-1  -0.39%  -0.12%  -0.47%  -0.29%   0.10%  -1.17%
 1981-1   0.08%  -0.62%  -1.78%   0.22%  -2.92%  -5.03%
 1985-1   0.00%   0.00%   0.00%   0.00%   0.00%   0.00%
 1989-1  -0.15%   0.03%  -0.07%   0.06%   0.23%   0.11%
 1993-1   0.01%  -0.90%   1.63%   0.90%   0.32%   1.97%

 Avg     -0.11%  -0.40%  -0.17%   0.22%  -0.57%  -1.03%

 1997-1   0.54%   0.47%  -0.59%  -0.50%   0.20%   0.11%
 2001-1   0.00%   0.00%   0.00%   0.00%   0.00%   0.00%
 2005-1  -0.70%  -0.65%  -1.16%   0.20%   0.29%  -2.02%
 2009-1   0.24%   0.39%  -0.69%  -1.12%  -0.79%  -1.97%
 2013-1  -0.25%   0.08%  -0.19%   0.70%  -0.15%   0.18%

 Avg     -0.04%   0.07%  -0.66%  -0.18%  -0.12%  -0.92%

OTC summary for Presidential Year 1 1965 - 2013
 Avg      0.03%  -0.05%  -0.18%   0.08%  -0.34%  -0.47%
 Win%       64%     64%     27%     64%     45%     55%

OTC summary for all years 1965 - 2016
 Avg     -0.28%  -0.09%   0.07%  -0.35%  -0.14%  -0.79%
 Win%       38%     50%     55%     38%     46%     42%


SPX Presidential Year 1
 Year       Mon     Tue     Wed    Thur    Fri    Totals
 1953-1  -0.31%   1.40%   0.13%   0.04%   0.26%   1.52%

 1957-1  -2.29%   0.68%  -1.21%   0.26%  -0.05%  -2.61%
 1961-1  -0.65%  -0.79%   0.42%   0.04%  -0.40%  -1.38%
 1965-1   0.03%  -0.30%   0.46%  -0.40%   0.18%  -0.03%
 1969-1   0.46%   0.00%  -0.14%  -0.76%  -0.64%  -1.08%
 1973-1   0.15%   0.64%   0.72%   0.23%  -0.60%   1.15%

 Avg     -0.46%   0.06%   0.05%  -0.13%  -0.30%  -0.79%

 1977-1  -0.65%   0.04%  -0.82%  -0.01%  -0.05%  -1.50%
 1981-1   0.84%  -0.48%  -0.88%  -0.55%  -1.95%  -3.02%
 1985-1   0.00%   0.00%   0.00%   0.00%   0.00%   0.00%
 1989-1   0.48%  -0.05%  -0.02%  -0.22%   0.39%   0.58%
 1993-1  -0.82%  -0.46%   0.72%   0.34%  -0.02%  -0.25%

 Avg     -0.04%  -0.24%  -0.25%  -0.11%  -0.41%  -1.05%

 1997-1   0.52%  -0.37%  -0.78%  -0.70%   0.78%  -0.55%
 2001-1   0.00%   0.00%   0.00%   0.00%   0.00%   0.00%
 2005-1  -0.56%  -0.79%  -0.91%   0.37%   0.06%  -1.83%
 2009-1  -0.34%   0.66%  -1.01%  -0.95%  -0.61%  -2.25%
 2013-1  -0.47%  -0.26%  -0.27%   0.35%  -0.41%  -1.06%

 Avg     -0.21%  -0.19%  -0.74%  -0.23%  -0.05%  -1.42%

SPX summary for Presidential Year 1 1953 - 2013 
 Avg     -0.26%  -0.01%  -0.26%  -0.14%  -0.22%  -0.88%
 Win%       43%     38%     36%     50%     36%     21%

SPX summary for all years 1953 - 2016
 Avg     -0.42%  -0.05%  -0.04%  -0.22%  -0.14%  -0.87%
 Win%       31%     46%     51%     39%     40%     35%

Technical market report for September 16, 2017

The good news is:
The Dow Jones Industrial Average (DJIA) and S&P 500 (SPX) closed at all time highs last Friday.  The NASDAQ composite (OTC) closed at an all time high last Wednesday.


The Negatives
Leadership continues to narrow.

The first chart covers the past 6 months showing the OTC in blue and a 10% trend (19 day EMA) of NASDAQ new highs (OTC NH) in green.  Dashed vertical lines have been drawn on the 1st trading day of each month.

Progressively higher highs for the index have been accompanied by progressively lower highs for OTC NH.
Last Wednesday’s high was not confirmed by OTC NH.

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

The pattern of NY NH is similar to OTC NH.

Conclusion
The all time index highs last week were not confirmed by 52 week issue highs or the small and mid cap indices.  Seasonality for the rest of the month leaves a lot to be desired.

I expect the major averages to be lower on Friday September 22 than they were on Friday September 15.

Good Luck,
Mike Burk
YTD W 15 / L 10 / T 12

The next chart is similar to the one above one except it shows the SPX in red and NY HL Ratio, in blue, has been calculated with NYSE data.

 NY HL Ratio rose to a very strong 92%. 

The yield curve continued its slow motion compression.

Money supply (M2) and Interest Rates
The following charts were supplied by Gordon Harms.
M2 growth has leveled off above its elevated trend.        

Seasonality
Next week includes the 5 trading days prior to the 4th Friday of September during the 1st year of the Presidential Cycle.  The tables below show the daily change, on a percentage basis for that period.

OTC data covers the period from 1963 to 2016 while SPX data runs from 1953 to 2016.  There are summaries for both the 1st 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.

Average returns have been negative by all measures.

The Positives

New lows have disappeared.

The next chart covers the past 6 months showing the OTC in blue and a 40% trend (4 day EMA) of NASDAQ new highs divided by new highs + new lows (OTC HL Ratio), in red.  Dashed horizontal lines have been drawn at 10% levels for the indicator; the line is solid at the 50%, neutral, level. 

OTC HL Ratio rose finishing the week at a very strong 84%.