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

OTC HL Ratio reached a higher level than NY HL Ratio, but also turned sharply downward on Friday.

Conclusion
The market is entering a seasonally weak period and the breadth indicators are confirming.

I expect the major averages to be lower on Friday April 27 than they were on Friday April 20.


Good Luck,
Mike Burk
YTD W 8 / L 8 / T 0

Seasonality
Next week includes the 5 trading days prior to the 4th  Friday of April during the 2nd year of the Presidential Cycle.  Counting stock market Fridays in April is hazardous because Good Friday usually occurs in April. The tables below show the daily change, on a percentage basis for the last 6 trading days of April. 

OTC data covers the period from 1963 to 2018 while SPX data runs from 1928 to 2018.  There are summaries for both the 2nd year of the Presidential Cycle and all years combined.

Average returns for the coming week have been mixed; weaker during the 2nd year of the Presidential Cycle than other years.

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

NY NL also turned downward at the end of last week.

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 fewer new lows move the indicator upward (up is good).

OTC NL turned downward at the end of last week.

​​​The Positives

I could be wrong.

The next chart is similar to the one above one except it shows the S&P 500 (SPX) in red and NY NH, in green, has been calculated with NYSE data.

 Ditto for NY NH. 

Report for the last 6 days of April.
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
               Day6      Day5      Day4      Day3      Day2      Day1      Totals
 1966-2       0.20% 5   0.25% 1   1.10% 2   0.03% 3  -0.81% 4  -0.07% 5     0.70%
 1970-2      -1.55% 4  -2.78% 5  -0.49% 1  -2.01% 2  -2.66% 3   1.59% 4    -7.91%
 1974-2      -1.99% 2  -1.72% 3  -1.05% 4   0.23% 5   0.26% 1   0.46% 2    -3.81%

 1978-2       0.41% 5   0.25% 1   0.60% 2   0.37% 3  -0.10% 4   0.51% 5     2.04%
 1982-2       0.69% 5   0.47% 1  -0.58% 2   0.09% 3  -0.40% 4   0.30% 5     0.57%
 1986-2      -0.25% 3   0.52% 4   0.21% 5  -0.23% 1  -0.57% 2  -1.53% 3    -1.86%
 1990-2      -1.34% 1  -0.21% 2   0.33% 3   0.12% 4  -0.73% 5   0.50% 1    -1.34%
 1994-2       1.87% 4   0.53% 5   1.14% 1   0.47% 2  -0.34% 4   0.29% 5     3.96%

 Avg          0.28%     0.31%     0.34%     0.16%    -0.43%     0.02%       0.68%

 1998-2      -1.88% 4  -0.66% 5  -2.61% 1   0.63% 2   1.08% 3   0.91% 4    -2.53%
 2002-2      -1.61% 2  -0.98% 3   0.02% 4  -2.91% 5  -0.42% 1   1.89% 2    -4.01%
 2006-2      -0.83% 5  -0.40% 1  -0.13% 2   0.14% 3   0.49% 4  -0.95% 5    -1.70%
 2010-2       0.44% 5  -0.28% 1  -2.04% 2   0.01% 3   1.63% 4  -2.02% 5    -2.27%
 2014-2      -0.83% 3   0.52% 4  -1.75% 5  -0.03% 1   0.72% 2   0.27% 3    -1.11%

 Avg         -0.94%    -0.36%    -1.30%    -0.43%     0.70%     0.02%      -2.32%

OTC summary for Presidential Year 2 1966 - 2014
Averages     -0.51%    -0.35%    -0.40%    -0.24%    -0.14%     0.17%      -1.48%
% Winners       38%       46%       46%       69%       38%       69%         31%
MDD  4/29/1970  9.16% --  4/29/2002  5.79% --  4/27/1998  5.07%

OTC summary for all years 1963 - 2017
Averages     -0.13%    -0.08%    -0.01%    -0.01%     0.18%     0.18%       0.13%
% Winners       55%       56%       47%       65%       65%       64%         53%
MDD 4/29/1970  9.16% --  4/24/2001  6.79% --  4/30/2004  6.32%


SPX Presidential Year 2
               Day6      Day5      Day4      Day3      Day2      Day1      Totals
 1930-2      -0.78% 4  -0.12% 5   0.20% 6  -2.40% 1  -0.12% 2   0.69% 3    -2.54%
 1934-2      -0.81% 2  -0.55% 3  -1.37% 4   0.09% 5  -0.83% 6  -2.33% 1    -5.80%

 1938-2      -1.54% 1  -2.45% 2   1.20% 3  -3.08% 4   0.10% 5  -0.82% 6    -6.58%
 1942-2      -0.53% 5   0.26% 6  -0.40% 1  -0.93% 2   1.87% 3   0.66% 4     0.94%
 1946-2      -1.01% 3  -0.59% 4   0.22% 5   0.86% 6  -0.11% 1   0.21% 2    -0.41%
 1950-2      -0.72% 1   0.00% 2  -0.39% 3   0.56% 4   0.56% 5   0.61% 6     0.62%
 1954-2       0.36% 5   0.36% 1  -0.43% 2   0.00% 3   1.51% 4   0.28% 5     2.09%

 Avg         -0.69%    -0.48%     0.04%    -0.52%     0.79%     0.19%      -0.67%

 1958-2       0.00% 3   0.79% 4   0.51% 5  -0.32% 1  -0.51% 2   1.02% 3     1.50%
 1962-2      -0.09% 1  -0.10% 2  -1.10% 3  -0.97% 4  -1.12% 5  -1.60% 1    -4.98%
 1966-2      -0.16% 5  -0.21% 1  -0.10% 2  -0.25% 3  -0.69% 4  -0.08% 5    -1.48%
 1970-2      -1.46% 4  -0.33% 5  -1.58% 1  -1.46% 2   1.92% 3  -0.35% 4    -3.26%
 1974-2      -1.68% 2  -1.64% 3  -0.81% 4   0.68% 5  -0.20% 1   0.34% 2    -3.31%

 Avg         -0.68%    -0.30%    -0.61%    -0.47%    -0.12%    -0.13%      -2.31%

 1978-2      -0.21% 5   1.52% 1   0.91% 2   0.19% 3  -0.99% 4   1.01% 5     2.42%
 1982-2       1.24% 5   0.52% 1  -1.06% 2  -0.63% 3  -0.96% 4   0.27% 5    -0.62%
 1986-2      -0.28% 3   0.11% 4   0.11% 5   0.33% 1  -1.06% 2  -2.07% 3    -2.86%
 1990-2      -1.21% 1  -0.21% 2   0.51% 3   0.27% 4  -1.14% 5   0.51% 1    -1.28%
 1994-2       1.53% 4  -0.25% 5   1.13% 1  -0.19% 2  -0.61% 4   0.40% 5     2.03%

 Avg          0.21%     0.34%     0.32%    -0.01%    -0.95%     0.02%      -0.06%

 1998-2      -0.92% 4  -1.05% 5  -1.93% 1  -0.13% 2   0.88% 3   1.57% 4    -1.58%
 2002-2      -2.15% 2  -0.71% 3  -0.15% 4  -1.39% 5  -1.01% 1   1.08% 2    -4.34%
 2006-2      -0.01% 5  -0.24% 1  -0.49% 2   0.28% 3   0.33% 4   0.07% 5    -0.06%
 2010-2       0.71% 5  -0.43% 1  -2.34% 2   0.65% 3   1.29% 4  -1.66% 5    -1.78%
 2014-2      -0.22% 3   0.17% 4  -0.81% 5   0.32% 1   0.48% 2   0.30% 3     0.24%

 Avg         -0.52%    -0.45%    -1.14%    -0.05%     0.39%     0.27%      -1.50%

SPX summary for Presidential Year 2 1930 - 2014
Averages     -0.45%    -0.23%    -0.37%    -0.34%    -0.02%     0.01%      -1.41%
% Winners       18%       32%       36%       45%       41%       68%         32%
MDD  4/30/1938  6.46% --  4/30/1934  5.68% --  4/29/2002  5.31%

SPX summary for all years 1928 - 2017
Averages     -0.14%    -0.17%     0.06%    -0.09%    -0.02%     0.23%      -0.13%
% Winners       41%       49%       58%       52%       51%       57%         52%
MDD 4/29/1932  7.02% --  4/29/1936  6.82% --  4/30/1938  6.46%

The next 4 charts could be considered positives, but, because they all turned downward with the change in seasonality, I see them as confirming the approaching seasonal weakness.

The next chart covers the past 6 months showing the SPX in red and a 40% trend (4 day EMA) of NYSE new highs divided by new highs + new lows (NY 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.

NY HL Ratio turned sharply downward on Friday.

Technical market report for April 21, 2018

The good news is:
The secondaries outperformed the blue chips last week.


The Negatives

The market is entering a seasonally weak period which, on average, has lasted until early October.

Last week started strong with new highs outnumbering new lows by good margins.  Those numbers deteriorated through the week ending with new lows outnumbering new highs by significant margins.

The first chart covers the past 6 months showing the NASDAQ composite (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.

OTC NH has been deteriorating since late January.