The next chart is similar to the one above except is shows the NASDAQ composite (OTC) in blue and OTC HL Ratio, in red, has been calculated with NASDAQ data.

The pattern of OTC HL Ratio is similar to that of NY HL Ratio.

Report for the 3 days before Thanksgiving and 1 day after. 
Day1 = the day after
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 2
               Day4       Day3       Day2       Day1       Totals
 1966-2      -0.31% 1   -1.00% 2   -0.42% 3    0.18% 5    -1.54%
 1970-2       0.47% 1    0.28% 2    0.31% 3    0.25% 5     1.32%
 1974-2      -0.63% 1    1.57% 2    0.24% 3    0.24% 5     1.42%

 1978-2       0.72% 1    0.04% 2    0.71% 3    0.69% 5     2.17%
 1982-2      -1.58% 1   -0.27% 2    0.76% 3    0.78% 5    -0.32%
 1986-2       0.41% 1    0.24% 2    0.34% 3    0.40% 5     1.38%
 1990-2       0.54% 1   -1.26% 2    0.14% 3    0.08% 5    -0.51%
 1994-2      -0.91% 1   -2.18% 2   -0.61% 3    0.79% 5    -2.91%

 Avg         -0.16%     -0.69%      0.27%      0.55%      -0.04%

 1998-2       2.57% 1   -0.58% 2    0.88% 3    1.65% 5     4.52%
 2002-2       0.90% 1   -2.53% 2    3.01% 3   -0.62% 5     0.76%
 2006-2       0.28% 1    0.09% 2    0.45% 3   -0.23% 5     0.59%
 2010-2       0.55% 1   -1.46% 2    1.93% 3   -0.34% 5     0.68%
 2014-2       0.89% 1    0.07% 2    0.61% 3    0.09% 5     1.66%

 Avg          1.04%     -0.88%      1.38%      0.11%       1.64%

OTC summary for Presidential Year 2 1966 - 2014
Averages      0.30%     -0.54%      0.64%      0.31%       0.71%
%Winners        69%        46%        85%        77%         69%
MDD  11/23/1994  3.66% --  11/26/2002  2.53% --  11/23/1982  1.85%

OTC summary for all years 1963 - 2017
Averages     -0.02%     -0.15%      0.34%      0.46%       0.62%
% Winners      51%        56%        76%        81%         67%


SPX Presidential Year 2
               Day4       Day3       Day2       Day1       Totals
 1954-2       0.39% 1    1.34% 2    0.56% 3    0.96% 5     3.25%

 1958-2      -2.60% 1   -0.60% 2    1.72% 3    1.12% 5    -0.36%
 1962-2      -0.57% 1    1.05% 2    0.60% 3    1.20% 5     2.28%
 1966-2      -1.44% 1   -0.52% 2    0.68% 3    0.80% 5    -0.49%
 1970-2       0.62% 1    0.64% 2    0.37% 3    0.99% 5     2.61%
 1974-2      -0.10% 1    0.93% 2    0.68% 3    0.04% 5     1.55%

 Avg         -0.82%      0.30%      0.81%      0.83%       1.12%

 1978-2       0.88% 1   -0.25% 2    0.49% 3    0.32% 5     1.45%
 1982-2      -2.04% 1   -0.96% 2    0.71% 3    0.75% 5    -1.54%
 1986-2       0.65% 1    0.29% 2    0.24% 3    0.18% 5     1.36%
 1990-2       0.70% 1   -1.26% 2    0.23% 3   -0.29% 5    -0.63%
 1994-2      -0.69% 1   -1.79% 2   -0.03% 3    0.52% 5    -1.99%

 Avg         -0.10%     -0.80%      0.33%      0.30%      -0.27%

 1998-2       2.12% 1   -0.44% 2    0.33% 3    0.45% 5     2.47%
 2002-2       0.25% 1   -2.10% 2    2.80% 3   -0.27% 5     0.68%
 2006-2      -0.05% 1    0.16% 2    0.23% 3   -0.37% 5    -0.02%
 2010-2      -0.16% 1   -1.43% 2    1.49% 3   -0.75% 5    -0.84%
 2014-2       0.29% 1   -0.12% 2    0.28% 3   -0.25% 5     0.20%

 Avg          0.49%     -0.78%      1.03%     -0.24%       0.50%

SPX summary for Presidential Year 2 1954 - 2014
Averages     -0.11%     -0.32%      0.71%      0.34%       0.62%
%Winners        50%        38%        94%        69%         56%
MDD  11/25/1958  3.19% --  11/23/1982  2.98% --  11/23/1994  2.50%

SPX summary for all years 1953 - 2017
Averages     -0.09%      0.10%      0.33%      0.36%       0.70%
% Winners      45%        61%        77%        74%         70%

Technical market report for November 17, 2018

The good news is:

The next 3 weeks have been seasonally strong.


The Negatives

New lows remained at threatening levels on both exchanges all week.

The first chart covers the past 6 months showing the S&P 500 (SPX) in red and a 40% trend (4 day EMA) of NYSE new highs divided by new highs + new lows (NY HL Ratio), in blue.  Dashed vertical lines have been drawn on the first trading day of the month.  Dashed horizontal lines have been drawn at 10% levels for the indicator; the line is solid at the 50%, neutral, level.

NY HL Ratio headed sharply downward last week.

Conclusion
The new low indicators did not follow the market downward early in the week.
Seasonally for the next 3 weeks is strong.

I expect the major averages to be higher on Friday November 23 than they were on Friday November 16.

Good Luck,
Mike Burk
YTD W 18 / L 15 / T 13

Seasonality
Next week includes Thanksgiving during the 2nd 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 2018 while SPX data runs from 1953 to 2018.  There are summaries for both the 2nd year of the Presidential Cycle and all years combined.  Prior to 1953 the market traded 7 days a week so that data has been ignored.

Average returns for the coming week have been positive by all measures.

​​​​The Positives

The next chart covers the past 6 months showing the OTC in blue and a 10% trend of NASDAQ new lows (OTC NL) in brown.  OTC NL has been plotted on an inverted Y axis so diminishing numbers of new lows move the indicator upward (up is good).

So far it looks like there was a bottom in late October OTC NL did not follow prices sharply downward last week as it has been doing.

Money supply (M2) and Interest Rates
The following charts were supplied by Gordon Harms.
M2 growth has fallen to its regression line that began in 2011.  

The yield curve is nearly flat, but it is relatively consistent between maturities.

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

OTC NL is also showing strength relative to prices and its behavior pattern of the past 2 months.