The good news is:
The Dow Jones Industrial Average (DJIA) & S&P 500 (SPX) closed at all time highs last Friday.
The NegativesThe first chart covers the last 6 months showing the S&P 500 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 failed to confirm the all time high for the SPX last Friday.
The next chart is similar to the 1st one except it shows the NASDAQ composite (OTC) in blue and OTC NH in green has been calculated with NASDAQ data. OTC NH also turned downward while the index rose.
The PositivesThe next chart covers the past 6 months showing the OTC in blue and a 10% trend (19 day EMA) of NASDAQ new lows (OTC NL) in brown. OTC NL has been plotted on an inverted Y axis so decreasing numbers of new lows move the indicator upward (up is good). OTC NL moved sharply upward last week.
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. NY NL also continued moving upward late last week.
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 (equal numbers of new highs and new lows). OTC HL Ratio continued its upward move finishing the week at a comfortable 75%. 
The next chart is similar to the one above except it shows the SPX in red and NY HL ratio, in blue, has been calculated with NYSE data. NY HL ratio finished the week at a very strong 86%. 
SeasonalityNext week includes the first 5 trading days of December during the 4th 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 2023 while SPX data runs from 1928 to 2023. There are summaries for both the 4th year of the Presidential Cycle and all years combined. Average returns for the coming week have been positive by all measures. Report the first 5 days of December.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 4 (PY4) Day1 Day2 Day3 Day4 Day5 Totals 1964-4 -0.64% 2 -0.82% 3 0.69% 4 -0.02% 5 0.09% 1 -0.70% 1968-4 0.52% 1 1.75% 2 0.10% 4 0.24% 5 -0.24% 1 2.37% 1972-4 0.74% 5 0.15% 1 0.10% 2 0.30% 3 0.28% 4 1.57% 1976-4 0.78% 3 0.01% 4 0.51% 5 0.35% 1 0.41% 2 2.06% 1980-4 -1.56% 1 -0.59% 2 0.58% 3 0.63% 4 -1.54% 5 -2.47% Avg -0.03% 0.10% 0.40% 0.30% -0.20% 0.57% 1984-4 -0.67% 1 0.02% 2 -0.90% 3 0.12% 4 -0.05% 5 -1.48% 1988-4 0.65% 4 0.01% 5 0.40% 1 0.42% 2 -0.17% 3 1.32% 1992-4 0.19% 2 -0.16% 3 0.53% 4 0.80% 5 0.75% 1 2.10% 1996-4 0.56% 1 0.05% 2 -0.26% 3 0.24% 4 -0.95% 5 -0.37% 2000-4 1.82% 5 -1.12% 1 10.47% 2 -3.23% 3 -1.57% 4 6.39% Avg 0.51% -0.24% 2.05% -0.33% -0.40% 1.59% 2004-4 1.98% 3 0.25% 4 0.20% 5 0.15% 1 -1.70% 2 0.88% 2008-4 -8.95% 1 3.70% 2 2.94% 3 -3.14% 4 4.41% 5 -1.04% 2012-4 -0.27% 1 -0.18% 2 -0.77% 3 0.52% 4 -0.38% 5 -1.07% 2016-4 -1.36% 4 0.09% 5 1.01% 1 0.45% 2 1.14% 3 1.33% 2020-4 1.28% 2 -0.05% 3 0.23% 4 0.70% 5 0.45% 1 2.61% Avg -1.47% 0.76% 0.72% -0.26% 0.78% 0.54% OTC summary for PY4 1964 – 2020Averages -0.33% 0.21% 1.06% -0.10% 0.06% 0.90%% Winners 60% 60% 80% 80% 47% 60%MDD 12/1/2008 8.95% — 12/7/2000 4.74% — 12/5/1980 2.46% OTC summary for all years 1963 – 2023Averages 0.13% 0.07% 0.33% -0.05% 0.13% 0.61%% Winners 61% 57% 67% 56% 52% 57%MDD 12/1/2008 8.95% — 12/6/1974 7.53% — 12/7/2018 6.35%
SPX PY4 Day1 Day2 Day3 Day4 Day5 Totals 1928-4 -1.03% 6 -0.75% 1 0.25% 2 -0.42% 3 -3.78% 4 -5.73% 1932-4 2.75% 4 -3.86% 5 -0.15% 6 1.24% 1 5.05% 2 5.01% 1936-4 -0.81% 2 -1.11% 3 0.53% 4 -0.18% 5 0.12% 6 -1.45% 1940-4 0.09% 1 -0.38% 2 0.00% 3 -0.66% 4 0.19% 5 -0.75% 1944-4 -0.23% 5 0.23% 6 0.62% 1 0.39% 2 0.00% 3 1.01% 1948-4 1.76% 3 -0.07% 4 0.87% 5 0.79% 6 -0.13% 1 3.22% 1952-4 0.08% 1 0.23% 2 -0.12% 3 -0.39% 4 0.04% 5 -0.15% 1956-4 2.00% 1 -0.30% 2 1.20% 3 0.91% 4 0.49% 5 4.29% 1960-4 -0.43% 4 0.16% 5 -0.14% 1 0.29% 2 0.99% 3 0.87% Avg 0.63% 0.05% 0.49% 0.40% 0.28% 1.85% 1964-4 -1.03% 2 0.29% 3 0.47% 4 0.20% 5 -0.02% 1 -0.10% 1968-4 -0.23% 1 -0.09% 2 -0.32% 4 0.24% 5 -0.25% 1 -0.66% 1972-4 0.61% 5 0.33% 1 -0.16% 2 0.37% 3 0.50% 4 1.65% 1976-4 0.38% 3 -0.36% 4 0.63% 5 0.78% 1 -0.07% 2 1.36% 1980-4 -2.36% 1 -0.17% 2 -0.19% 3 -0.17% 4 -1.80% 5 -4.68% Avg -0.53% 0.00% 0.08% 0.28% -0.33% -0.49% 1984-4 -0.46% 1 0.34% 2 -0.78% 3 0.41% 4 -0.31% 5 -0.80% 1988-4 -0.44% 4 -0.25% 5 1.15% 1 0.97% 2 0.19% 3 1.62% 1992-4 -0.13% 2 -0.21% 3 0.00% 4 0.50% 5 0.75% 1 0.92% 1996-4 -0.06% 1 -1.09% 2 -0.42% 3 -0.10% 4 -0.64% 5 -2.32% 2000-4 0.02% 5 0.74% 1 3.89% 2 -1.82% 3 -0.59% 4 2.25% Avg -0.22% -0.09% 0.77% -0.01% -0.12% 0.33% 2004-4 1.50% 3 -0.09% 4 0.07% 5 -0.08% 1 -1.11% 2 0.29% 2008-4 -8.93% 1 3.99% 2 2.58% 3 -2.93% 4 3.65% 5 -1.63% 2012-4 -0.47% 1 -0.17% 2 0.16% 3 0.33% 4 0.29% 5 0.14% 2016-4 -0.35% 4 0.04% 5 0.58% 1 0.34% 2 1.32% 3 1.93% 2020-4 1.13% 2 0.18% 3 -0.06% 4 0.88% 5 -0.19% 1 1.93% Avg -1.43% 0.79% 0.67% -0.29% 0.79% 0.53% SPX summary for PY4 1928 – 2020Averages -0.28% -0.10% 0.44% 0.08% 0.20% 0.34%% Winners 42% 42% 58% 63% 50% 58%MDD 12/1/2008 8.93% — 12/6/1928 5.64% — 12/5/1980 4.62% SPX summary for all years 1928 – 2023Averages -0.01% 0.09% 0.19% 0.06% 0.15% 0.48%% Winners 49% 54% 60% 53% 51% 67%MDD 12/1/2008 8.93% — 12/6/1974 7.09% — 12/6/1928 5.64% DecemberSince 1963, over all years, the OTC, in December, has been up 62% of the time with an average gain of 1.6%. During the 4th year of the Presidential Cycle December has been up 73% time with an average gain of 1.5%. The best December ever for the OTC was 1999 (+22.0%), the worst 2002 (-9.7%).The average month has 21 trading days. The chart below has been calculated by averaging the daily percentage change of the OTC for each of the 1st 11 trading days and each of the last 10. In months when there were more than 21 trading days some of the days in the middle were not counted. In months when there were less than 21 trading days some of the days in the middle of the month were counted twice. Dashed vertical lines have been drawn after the 1st trading day and at 5 trading day intervals after that. The line is solid on the 11th trading day, the dividing point.In the chart below the blue line shows the average of the OTC in December over all years since 1963 while the green line shows the average during the 4th year of the Presidential Cycle over the same period.
Since 1928 the SPX has been up 73% of the time in December with an average gain of 1.3%. During the 4th year of the Presidential Cycle the SPX has been up 79% of the time with an average gain of 1.5%. The best December ever for the SPX was 1991 (+11.2%), the worst 1931 (-14.5%).The chart below is similar to the one above except it shows the average daily performance over all years for the SPX in December in red and the performance during the 4th year of the Presidential Cycle in green.
Since 1979 the Russell 2000 (R2K) has been up 76% of the time in December with an average gain of 2.3%. During the 4th year of the Presidential Cycle the R2K has been up 91% of the time (1980 has been its only down year) with an average gain of 3.5%. The best December ever for the R2K, 2023 (+12.1%), the worst 2018 (-12.0%)The chart below is similar to those above except it shows the daily performance over all years of the R2K in December in magenta and the performance during the 4th year of the Presidential Cycle in green.
Since 1885 the Dow Jones Industrial Average (DJIA) has been up 70% of the time in December with an average gain of 1.2%. During the 4th year of the Presidential Cycle the DJIA has been up 62% of the time in December with an average gain of 1.0%. The best December ever for the DJIA, 1903 (+10.8%), the worst 1931 (-17.0%).The chart below is similar to those above except it shows the daily performance over all years of the DJIA in December in blue and the performance during the 4th year of the Presidential Cycle in green.
ConclusionLast week the market drifted upward on low volume; typical for Thanksgiving week.New highs failed to confirm the new all time highs for the SPX and DJIA, however, new lows remained at unthreatening levels.The strongest sectors last week were Finance and Utilities (for the 3rd week) while the weakest were Energy (down from the top last week) and Precious Metals.I expect the major averages to be higher on Friday December 6 than they were on Friday November 29. Technical Market Report For November 16, 2024 Technical Market Report For November 9, 2024 Technical Market Report For November 2
