Technical Stock Market Report

The good news is:  Most of the major indices closed at all time highs at some time in the past week. 

The negatives:   Considering the major indices are very near their all time highs, 52 week new highs of the individual issues are anemic.

The chart below covers the past 6 months showing the S&P500 (SPX) in red and a 10% trend (19 day EMA) of NYSE new highs (NY NH), in green.  Dashed vertical lines have been drawn on the 1st trading day of each month.

NY NH is just off its low of the past 6 months while the SPX is just off its all time high.  

The next chart is similar to the one above except is shows the NASDAQ composite (OTC) in blue and OTC NH, in green, has been calculated from NASDAQ data.

OTC NH has been stronger than NY NH, but remains closer to its low of the past 6 months than its high.

The positives:  New lows have been slightly elevated, but remain below threatening levels.

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 blue.  Dashed horizontal lines have been drawn at 10% levels for the indicator, the line is solid at the 50%, neutral level.

NY HL Ratio finished the week nearly unchanged at 72%.

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

OTC HL Ratio fell a little to finish the week at a comfortably positive 66%.

Conclusion

The breadth indicators deteriorated a little at the end of last week, but seasonality for the coming week has been quite strong for the past 20 – 30 years.

I expect the major averages to be higher on Friday May 29 than they were on Friday May 22.

Last week the Dow Jones Industrial Average was down slightly while all of the other major averages were up, so I am calling last weeks positive forecast a tie.

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Disclaimer:  Charts and figures presented herein are believed to be reliable but I cannot attest to their accuracy.  Recent (last 10-15 yrs.) data has been supplied by CSI (csidata.com), FastTrack (fasttrack.net), Quotes Plus and the Wall Street Journal (wsj.com).  Historical data is from Barron’s and ISI price books.  The views expressed dare provided for information purposes only and should not be construed in any way as investment advice.  Furthermore, the opinions expressed may change without notice.