The good news is:

• Seasonality, next week has been very strong.

The Negatives

New highs continued to deteriorate and the secondaries continue to under perform the blue chips.

The first chart covers the past 6 months showing the OTC in blue and a 10% trend (19 day EMA) of NASDAQ new highs (OTC NH) in green. Dashed vertical lines have been drawn on the 1st trading day of each month.

OTC NH continued its decline.

The next chart is similar to the one above except it shows the S&P 500 (SPX) in red and NY NH, in green, has been calculated with NYSE data.

The pattern is similar to the chart above.

The next chart is from FastTrack (investorsfasttrack.com). It covers the past year showing the Russell 2000 (R2K) in red, the SPX in green and a relative strength indicator called Accutrack as a histogram on the bottom in yellow.

When Accutrack is above the neutral line the R2K is outperforming the SPX. That is good. This chart shows the R2K underperforming the SPX for the past 3 months.

The Positives

New lows increased last week, but remain at non threatening levels.

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.

OTC HL Ratio tumbled last week but remained above the neutral line.

The next chart is similar to the one above one except it shows the SPX in red and NY HL Ratio, in blue, has been calculated from NYSE data.

NY HL Ratio fell a bit last week, but finished the week at a very strong 81%.

Seasonality

Next week includes the 4 trading days prior to Good Friday and the 4 trading days prior to the 2nd Friday of April during the 1st year of the Presidential Cycle. Good Friday moves around a lot so the tables below show the daily change, on a percentage basis for the 5 trading days prior to the 2nd Friday of April.