The good news is:
The breadth indicators firmed up pretty nicely last week.

The Negatives
We saw a nice rally last week with the secondaries outperforming the blue chips and new lows dropping to non-threatening levels. The rally was consistent with the seasonal pattern which begins to deteriorate in the coming week.

The first chart covers the past 6 months showing the Nasdaq composite (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.

 New highs picked up a bit last week, but not enough to turn this indicator upward.

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 from NYSE data.

On the NYSE, new highs increased enough to turn the indicator upward.

The Positives

The most impressive statistic from last week was how new lows disappeared.

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 jumped into positive territory finishing the week at 56%.

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 with NYSE data.

 NY HL Ratio also moved sharply upward finishing the week at a comfortable 70%. 

Seasonality
Next week includes the last 4 trading days of August and the 1st trading day of September during the 1st 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 2016 while SPX data runs from 1928 to 2016. There are summaries for both the 1st year of the Presidential Cycle and all years combined.

Average returns have been modestly negative for the OTC and modestly positive for the SPX. The opposite of last week.