The good news is:

 The NegativesThe first chart covers the last 6 months showing the 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 1^st trading day of each month.  NY NH failed to confirm the new SPX all time high by a wide margin.The next chart is similar to the 1^st one except it shows the Nasdaq composite (OTC) in blue and OTC NH in green has been calculated with Nasdaq data.  OTC NH turned upward, but is near its recent low. The PositivesThe 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 (equal numbers of new highs and new lows).NY HL ratio continued its upward move finishing the week at a very strong 84%. 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 also continued its move upward.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 continued its move 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. SeasonalityNext week includes the last 5 trading days of January during the 1^st 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 2024 while SPX data runs from 1928 to 2024.  There are summaries for both the 1^st year of the Presidential Cycle and all years combined.  Seasonally, next week’s returns have been modestly positive by all measures. Report for the last 5 days of January.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 1 (PY1)               Day5      Day4      Day3      Day2      Day1      Totals 1965-1       0.61% 1   0.39% 2   0.62% 3   0.75% 4   0.36% 5     2.72% 1969-1       0.23% 1  -0.14% 2   0.09% 3   0.22% 4   0.39% 5     0.79% 1973-1      -1.47% 3  -0.56% 5   0.00% 1  -1.00% 2  -0.19% 3    -3.22% 1977-1      -0.32% 2  -0.57% 3  -0.49% 4  -0.33% 5  -0.19% 1    -1.89% 1981-1      -1.20% 1   1.05% 2  -0.41% 3   0.26% 4  -0.04% 5    -0.34%  Avg         -0.43%     0.03%    -0.04%    -0.02%     0.07%      -0.39%  1985-1       0.61% 5   0.38% 1   0.41% 2   0.87% 3   0.04% 4     2.32% 1989-1       0.52% 3   0.78% 4   0.22% 5   0.32% 1   0.52% 2     2.35% 1993-1       0.76% 1   0.03% 2  -1.31% 3  -0.46% 4   0.24% 5    -0.74% 1997-1      -0.81% 1   0.12% 2   0.06% 3   1.17% 4   0.65% 5     1.19% 2001-1      -3.67% 4   0.98% 5   2.05% 1   0.00% 2  -2.31% 3    -2.95%  Avg         -0.52%     0.46%     0.29%     0.38%    -0.17%       0.43%  2005-1       0.56% 2   1.29% 3   0.05% 4  -0.55% 5   1.31% 1     2.66% 2009-1       0.82% 1   1.04% 2   3.55% 3  -3.24% 4  -2.08% 5     0.09% 2013-1       0.62% 5   0.15% 1  -0.02% 2  -0.36% 3  -0.01% 4     0.38% 2017-1       0.99% 3  -0.02% 4   0.10% 5  -0.83% 1   0.02% 2     0.26% 2021-1       0.69% 1  -0.07% 2  -2.61% 3   0.50% 4  -2.00% 5    -3.49%  Avg          0.74%     0.48%     0.21%    -0.90%    -0.55%      -0.02% OTC summary for PY1 1965 – 2021Averages     -0.07%     0.32%     0.15%    -0.18%    -0.22%       0.01%% Winners       67%       67%       60%       53%       53%         60%MDD  1/30/2009  5.26% —  1/29/2021  4.15% —  1/25/2001  3.67% OTC summary for all years 1963 – 2024Averages     -0.07%     0.19%     0.02%     0.02%     0.23%       0.38%% Winners       46%       60%       58%       56%       63%         56%MDD 1/28/2000  6.73% —  1/30/2009  5.26% —  1/30/1970  4.76%
 SPX PY1               Day5      Day4      Day3      Day2      Day1      Totals 1929-1      -0.20% 6  -0.31% 1   0.04% 2   0.35% 3   1.14% 4     1.02% 1933-1      -0.70% 4  -0.14% 5  -1.14% 6   0.29% 1  -0.57% 2    -2.27% 1937-1      -1.46% 2   0.80% 3  -0.11% 4   0.79% 5   0.34% 6     0.35% 1941-1       0.00% 1  -0.57% 2  -2.01% 3  -1.76% 4   0.30% 5    -4.05%  1945-1       0.98% 5   0.45% 6   0.15% 1  -0.59% 2   0.07% 3     1.05% 1949-1      -0.26% 3  -0.26% 4  -0.33% 5   0.20% 6  -0.07% 1    -0.72% 1953-1      -0.19% 1   0.12% 2   0.31% 3   0.27% 4   0.69% 5     1.19% 1957-1      -0.47% 5  -0.74% 1   0.49% 2   0.45% 3  -0.42% 4    -0.68% 1961-1       0.13% 3   0.15% 4   1.02% 5   1.19% 1  -0.31% 2     2.19%  Avg          0.04%    -0.06%     0.33%     0.30%    -0.01%       0.60%  1965-1       0.14% 1   0.09% 2   0.33% 3   0.29% 4   0.09% 5     0.94% 1969-1       0.02% 1   0.01% 2   0.10% 3   0.04% 4   0.45% 5     0.61% 1973-1      -1.26% 3  -0.24% 5  -0.38% 1  -0.16% 2   0.17% 3    -1.86% 1977-1      -0.12% 2  -0.77% 3  -0.54% 4   0.14% 5   0.10% 1    -1.18% 1981-1      -0.30% 1   0.99% 2  -0.59% 3  -0.08% 4  -0.53% 5    -0.52%  Avg         -0.30%     0.02%    -0.22%     0.05%     0.06%      -0.40%  1985-1       0.36% 5   0.03% 1  -0.03% 2   1.15% 3   0.13% 4     1.65% 1989-1       0.23% 3   0.88% 4   0.73% 5   0.40% 1   0.84% 2     3.08% 1993-1       0.89% 1  -0.01% 2  -0.42% 3   0.13% 4   0.03% 5     0.62% 1997-1      -0.71% 1   0.00% 2   0.98% 3   1.51% 4   0.25% 5     2.03% 2001-1      -0.50% 4  -0.19% 5   0.68% 1   0.70% 2  -0.56% 3     0.13%  Avg          0.05%     0.14%     0.39%     0.78%     0.14%       1.50%  2005-1       0.40% 2   0.48% 3   0.04% 4  -0.27% 5   0.85% 1     1.50% 2009-1       0.56% 1   1.09% 2   3.36% 3  -3.31% 4  -2.28% 5    -0.59% 2013-1       0.54% 5  -0.18% 1   0.51% 2  -0.39% 3  -0.26% 4     0.22% 2017-1       0.80% 3  -0.07% 4  -0.09% 5  -0.60% 1  -0.09% 2    -0.05% 2021-1       0.36% 1  -0.15% 2  -2.57% 3   0.98% 4  -1.93% 5    -3.31%  Avg          0.53%     0.23%     0.25%    -0.72%    -0.74%      -0.44% SPX summary for PY1 1929 – 2021Averages     -0.03%     0.06%     0.02%     0.07%    -0.07%       0.06%% Winners       50%       46%       54%       67%       58%         58%MDD  1/30/2009  5.52% —  1/30/1941  4.29% —  1/29/2021  3.66% SPX summary for all years 1928 – 2024Averages     -0.05%     0.15%     0.00%     0.11%     0.22%       0.43%% Winners       52%       51%       46%       59%       61%         56%MDD 1/29/1938  6.33% —  1/30/2009  5.52% —  1/30/1932  5.05% ConclusionThe market had a good week but the secondaries lagged.Seasonality for the coming week has been modestly positive.The strongest sectors last week were Precious Metals and Health Care (up from the bottom last week) while the weakest were Electronics and Energy (down from the top last week).I expect the major averages to be higher on Friday January 30 than they were on Friday January 24. Last week’s negative forecast was a miss.More By This Author:Technical Market Report For January 18, 2025
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