The good news is:
The Nasdaq composite (OTC) closed at an all time high last Friday.

The sellers left town early last week.  Volume disappeared, new lows disappeared and the secondaries outperformed the blue chips.

The Negatives
The market is overbought.

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.

New highs picked up last week, but the indicator is a long way from confirming the new index high.

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.

The SPX is only 0.2% off its all time high while NY NH is near its low for the past 6 months. 

The Positives

The dramatic decline in the number of new lows and strength of the secondaries over the past 2 weeks could be seen as the market coming off a bottom.

Most traders will be back from vacation Tuesday so we should get view of reality next week.

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 rose to a comfortable 79%.

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 finished last week at 79%. 

Seasonality
Next week includes the 4 trading days prior to the 2nd Friday 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 1953 to 2016.  There are summaries for both the 1st 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 have been modestly negative because the definition of this week includes the period of the September 11, 2001 attack.