The good news is:The NASDAQ composite (OTC), S&P 500 (SPX) and Dow Jones Industrial Average (DJIA) all closed at all time high last Friday. The NegativesThe first chart covers the last 6 months showing the S&P 500 (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 failed to confirm the SPX all time high.
The next chart is similar to the 1st one except it shows the OTC in blue and OTC NH in green has been calculated with NASDAQ data. OTC NH, by a small margin, also failed to confirm the new index high. 
The 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 did not respond positively to the rapid upward move of the index.
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 did not respond positively to the rapid upward move of the SPX.
The PositivesThe 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 returned to positive territory.
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 also responded positively. 
SeasonalityNext week includes the 5 trading days prior to the 3rd Friday of November 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 1953 to 2023. 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.Average returns for the coming week have been mixed and weaker during the 4th year of the Presidential Cycle than other years. Report for the week before the 3rd Friday of November.The number following the year is the position in the Presidential Cycle.Daily returns from Monday through 3rd Friday.OTC Presidential Year 4 (PY4) Year Mon Tue Wed Thur Fri Totals 1964-4 0.27% 0.29% 0.27% 0.13% 0.04% 1.02% 1968-4 0.00% 0.27% 0.31% 0.13% 0.57% 1.29% 1972-4 -0.26% 0.10% -0.34% -0.14% 0.05% -0.59% 1976-4 0.03% 0.44% 0.55% 0.90% 0.18% 2.11% 1980-4 -0.08% 1.08% 0.62% 0.72% -0.21% 2.12% Avg -0.01% 0.44% 0.28% 0.35% 0.13% 1.19% 1984-4 -0.10% -0.57% -0.35% -0.39% -0.36% -1.77% 1988-4 -0.37% -0.06% -1.17% -0.10% 0.04% -1.66% 1992-4 -0.49% -1.09% 1.24% 0.58% 0.63% 0.87% 1996-4 0.41% -0.49% 0.18% 0.93% -0.68% 0.35% 2000-4 -2.06% 5.78% 0.87% -4.22% -0.16% 0.22% Avg -0.52% 0.71% 0.15% -0.64% -0.10% -0.40% 2004-4 0.42% -0.74% 1.01% 0.22% -1.60% -0.69% 2008-4 -2.29% 0.08% -6.53% -5.07% 5.18% -8.63% 2012-4 -0.02% -0.70% -1.29% -0.35% 0.57% -1.78% 2016-4 -0.36% 1.10% 0.36% 0.74% -0.23% 1.61% 2020-4 0.80% -0.21% -0.82% 0.87% -0.42% 0.23% Avg -0.29% -0.09% -1.45% -0.72% 0.70% -1.85%OTC summary for PY4 1964 – 2020 Avg -0.29% 0.35% -0.34% -0.34% 0.24% -0.35% Win% 36% 53% 60% 60% 53% 60%OTC summary for all years 1963 – 2023 Avg -0.16% 0.18% -0.12% 0.09% 0.05% 0.05% Win% 43% 57% 52% 57% 56% 59%SPX PY4 Year Mon Tue Wed Thur Fri Totals 1956-4 0.32% -0.47% -0.56% -0.63% 0.04% -1.30% 1960-4 -0.50% 0.40% -0.20% -0.27% 0.49% -0.09% 1964-4 0.52% 0.44% 0.22% -0.05% 0.12% 1.25% 1968-4 0.00% 0.64% 0.49% 0.07% 0.55% 1.75% 1972-4 0.15% 0.92% -0.39% 0.55% 0.31% 1.54% 1976-4 0.67% 0.14% 0.57% 1.27% 0.03% 2.68% 1980-4 0.44% 1.42% -0.46% 0.96% -0.92% 1.44% Avg 0.44% 0.71% 0.09% 0.56% 0.02% 1.73% 1984-4 -0.14% -0.83% 0.01% -0.06% -1.08% -2.10% 1988-4 -0.07% 0.23% -1.68% 0.30% 0.71% -0.53% 1992-4 -0.41% -0.34% 0.85% 0.18% 0.72% 1.00% 1996-4 0.15% -0.32% 0.21% 0.65% 0.24% 0.93% 2000-4 -1.08% 2.35% 0.50% -1.26% -0.34% 0.17% Avg -0.31% 0.22% -0.02% -0.04% 0.05% -0.10% 2004-4 -0.03% -0.71% 0.55% 0.14% -1.12% -1.16% 2008-4 -2.58% 0.98% -6.12% -6.71% 6.32% -8.10% 2012-4 0.01% -0.40% -1.39% -0.16% 0.48% -1.45% 2016-4 -0.01% 0.75% -0.16% 0.47% -0.24% 0.81% 2020-4 1.16% -0.48% -1.16% 0.39% -0.68% -0.76% Avg -0.29% 0.03% -1.65% -1.17% 0.95% -2.13%SPX summary for PY4 1956 – 2020 Avg -0.09% 0.28% -0.51% -0.24% 0.33% -0.23% Win% 50% 59% 47% 59% 65% 53%SPX summary for all years 1956 – 2023 Avg -0.03% 0.05% -0.07% -0.02% 0.13% 0.06% Win% 46% 48% 58% 54% 61% 54%Money supply (M2) and Interest RatesThe following charts were supplied by Gordon Harms.The first chart, made with FastTrack, covers the past 4 years showing the SPX in red and M2 money supply in green.Money supply has remained constant for several months.
Treasury rates at their close last Friday and their changes from last month:2yr yield 4.264% up from 3.966%5yr yield 4.197% up from 3.909%10yr yield 4.310% up from 4.105% 30yr yield 4.473% up from 4.414%The 2 yr and 5 yr rates are still inverted. All of the others remained uninverted.The next chart covers the past 15 months showing the 30 year yield over the 5 year yield on top, The 1, 2, 5, 10 & 30 year treasury rates in the middle group and the SPX with a 50 day simple moving average on the bottom.
ConclusionExcept for the Russell 2000 all of the major indices closed at all time highs last week. These new highs were unconfirmed by any of the breadth indicators except the NYSE advance decline line.I think we saw a bear market rally last week. It was violent which, discourages the shorts. Some of the numbers were pretty strange. For example, on Wednesday, there were 1732 issues advancing on the NYSE and 474 new 52 week highs (27%). On the NASDAQ there were 2789 issues advancing and 667 new 52 week highs (24%). The next 2 days prices were up yet the number of new 52 week highs declined on both days. New lows have been increasing and that did not change. Look at the new low charts and you see prices following the indicator pretty closely; not this time.The strongest sectors last week were Energy and Banks while the weakest were Precious Metals (for the 2nd week) and Basic Materials.I expect the major averages to be lower on Friday November 15 than they were on Friday November 8. Last weeks negative forecast was a miss. More By This Author:Technical Market Report For November 2 Technical Market Report For October 26 Technical Market Report For October 19
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