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

Stocks Technicals Point to Sustainable Rally Underway

Stock-Markets / US Stock Markets Nov 09, 2008 - 06:31 AM GMT

By: Mike_Burk

Stock-Markets

The good news is: The bottom indicators have been moving sharply upward suggesting a high likelihood of a rally lasting at least several weeks.

Short Term - Downside volume has been drying up.


The chart below covers the past 6 months showing the S&P 500 (SPX) in red and a 5% trend (39 day EMA) of NYSE downside volume (NY DV) in black. NY DV has been plotted on an inverted Y axis so decreasing downside volume moves the indicator upward (up is good). Dashed vertical lines have been drawn on the 1st trading day of each month.

NY DV has been ratcheting upward since the October 10 low and that upward movement has accelerated in the past week and a half.

The next chart shows the same index and indicator at the 2002 bottom.

The next chart shows the same index and indicator at the 1998 bottom.

The sharp move upward in DV suggests a short term low is in place.

Intermediate term

On Monday there were 21 new lows on the NYSE, the lowest number since April 8. That number increased to 133 on Thursday.

The chart below covers the past year showing the SPX in red and a 10% trend (19 day EMA) of NYSE new lows (NY NL) in blue. NY NL has been plotted on an inverted Y axis so decreasing new lows move the indicator upward (up is good).

The next chart is similar to the previous one except it shows the NASDAQ composite (OTC) in blue and the indicator OTC NL has been calculated from NASDAQ new lows.

Currently it would require more than 337 new lows on the NYSE or 247 new lows on the NASDAQ to turn those indicators downward. As long as OTC NL and NY NL do not turn downward it is unlikely the October 24 lows will be penetrated.

Seasonality

Next week is the week prior to the 2nd Friday of November during the 4th year of the Presidential Cycle.

The tables show the daily return on a percentage basis for week prior to the 2nd Friday of November during the 4th year of the Presidential Cycle. OTC data covers the period from 1963 - 2007 and SPX data from 1953 - 2007. There are summaries for both the 4th 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.

Large losses in 2000 skew the averages downward otherwise the indices have been up a little over half of the time with modest gains.

Report for the week before the 2nd Friday of November
The number following the year is the position in the presidential cycle.
Daily returns from Monday to 2nd Friday.

OTC Presidential Year 4
Year Mon Tue Wed Thur Fri Totals
1964-4 0.25% 0.25% -0.27% 0.16% 0.30% 0.68%
1968-4 -0.68% 0.00% -0.54% 0.06% -0.09% -1.25%
1972-4 0.18% 0.00% -0.39% -0.18% 0.23% -0.16%
1976-4 -0.82% -0.74% -0.30% 0.38% -0.06% -1.54%
1980-4 -0.21% 0.99% 1.42% 1.25% 0.75% 4.20%
1984-4 0.20% 0.86% -0.32% -0.10% 0.00% 0.64%
Avg -0.27% 0.37% -0.03% 0.28% 0.21% 0.38%
1988-4 -1.18% 0.62% -0.29% 0.17% -1.23% -1.91%
1992-4 0.85% 0.92% 1.14% -0.09% 0.44% 3.26%
1996-4 -0.11% 0.70% 1.37% 0.66% 0.27% 2.89%
2000-4 -1.03% -0.01% -5.39% -0.97% -5.36% -12.75%
2004-4 0.02% 0.20% -0.43% 1.31% 1.17% 2.27%
Avg -0.29% 0.49% -0.72% 0.22% -0.94% -1.25%
OTC summary for Presidential Year 4 1964 - 2004
Avg -0.23% 0.42% -0.36% 0.24% -0.36% -0.33%
Win% 45% 78% 27% 64% 60% 55%
OTC summary for all years 1963 - 2007
Avg -0.03% 0.19% -0.02% 0.17% -0.04% 0.26%
Win% 44% 63% 56% 60% 59% 53%
SPX Presidential Year 4
Year Mon Tue Wed Thur Fri Totals
1956-4 1.32% 0.00% -1.03% -0.81% -0.83% -1.35%
1960-4 0.38% 0.00% 0.44% 1.41% -0.46% 1.76%
1964-4 -0.05% -0.41% 0.28% 0.13% 0.02% -0.02%
1968-4 0.04% 0.00% 0.16% 0.22% 0.43% 0.86%
1972-4 -0.21% 0.00% -0.55% 0.13% 0.20% -0.43%
1976-4 -1.21% -0.28% -0.51% 0.84% -0.40% -1.57%
1980-4 0.23% 1.37% 2.54% 1.41% 0.48% 6.04%
1984-4 0.69% 1.09% -0.73% -0.29% -0.64% 0.12%
Avg -0.09% 0.73% 0.18% 0.46% 0.02% 1.01%
1988-4 -0.86% 0.45% -0.66% 0.13% -2.11% -3.05%
1992-4 0.24% 0.01% 0.86% 0.16% -0.10% 1.16%
1996-4 0.42% 1.05% 1.46% 0.42% 0.44% 3.79%
2000-4 0.39% -0.02% -1.58% -0.65% -2.44% -4.30%
2004-4 -0.11% -0.07% -0.10% 0.91% 0.91% 1.54%
Avg 0.02% 0.28% 0.00% 0.19% -0.66% -0.17%
SPX summary for Presidential Year 4 1956 - 2004
Avg 0.10% 0.35% 0.04% 0.31% -0.35% 0.35
Win% 62% 56% 46% 77% 46% 54%
SPX summary for all years 1953 - 2007
Avg -0.05% 0.14% 0.07% 0.18% 0.00% 0.31%
Win% 51% 52% 59% 60% 57% 56%

Money Supply (M2)

The chart was provided by Gordon Harms. Money supply growth has been accelerating sharply enough to enhance the chances of an upswing in equities.

Conclusion

A retest of the October 24 low is possible in the next few days, but with the bottom indicators moving sharply upward, it is unlikely the October low will be penetrated.

I expect the major indices to be higher on Friday November 14 than they were on Friday November 7.

Last weeks positive forecast was a miss.

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

© 2005-2022 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