The good news is:

In spite of some deterioration in the indices, new lows have remained insignificant.

The Negatives

New highs and new lows both continued to decline last 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.

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 using NYSE data.

The Positives

The secondaries outperformed the blue chips and new lows declined.

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.

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 rose sharply finishing the week at 78%.

Seasonality

Next week includes the first 4 trading days of July 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 for the coming week have been mixed and a little stronger for the blue chips than the secondaries.

Report for the first 4 days of July.

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.

July

Since 1963, over all years, the OTC in July has been up 52% of the time with an average gain of 0.4%. During the 1st year of the Presidential Cycle the OTC in July has been up 77% of the time with an average gain of 2.7%. The best July ever for the OTC was 1997 (+10.5%), the worst 2002 (-9.2%).