Technical Market Report For September 27, 2025
The good news is:
- The pullback from the confirmed all time highs appears to be over.
The Negatives
No surprises here; the market had a down week following confirmed all time highs the previous week and the pullback was consistent with the seasonal pattern.
The Positives
The first chart covers the last 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.
OTC NH declined along with prices after confirming the all time index high..
The next chart is similar to the one above except it shows the S & P 500 (SPX) in red and OTC NH in green has been calculated with NYSE data.
Ditto NY NH.
The next chart covers the past 6 months showing the SPX in red and a 10% trend (19 day EMA) of NYSE new lows (NY NL) in blue. NY NL has been plotted on an inverted Y axis so decreasing numbers of new lows move the indicator upward (up is good).
NY NL; NYSE new lows increased last week, but remained at insignificant levels.
The next chart is similar to the one above except it shows the OTC in blue and OTC NL, in brown, has been calculated with Nasdaq data.
Nasdaq new lows also remained at unthreatening 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 (equal numbers of new highs and new lows).
OTC HL Ratio declined last week, but remained in positive territory.
The next chart is similar to the one above except it shows the SPX in red and NY HL ratio, in blue, has been calculated with NYSE data.
Ditto NY HL ratio.
Seasonality
Next week includes the last 2 trading days of September and the first 3 trading days of October 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 2024 while SPX data runs from 1928 to 2024. There are summaries for both the 1st year of the Presidential Cycle and all years combined.
Seasonality for the coming week has been mixed and stronger during the 1st week of the Presidential cycle than other years.
Report for the last 2 days of September and first 3 days of October
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)
Day2 Day1 Day1 Day2 Day3 Totals
1965-1 0.07% 3 -0.88% 4 -0.06% 5 -0.17% 1 0.30% 2 -0.72%
1969-1 -0.36% 1 -0.39% 2 0.42% 3 -0.61% 4 0.36% 5 -0.59%
1973-1 0.59% 4 -0.06% 5 -0.21% 1 0.71% 2 0.33% 3 1.36%
1977-1 0.31% 4 0.58% 5 0.31% 1 -0.35% 2 0.01% 3 0.86%
1981-1 1.99% 2 0.85% 3 0.59% 4 1.81% 5 0.84% 1 6.08%
Avg 0.52% 0.02% 0.21% 0.28% 0.37% 1.40%
1985-1 -0.57% 4 0.05% 1 0.51% 2 -0.22% 3 0.09% 4 -0.14%
1989-1 0.72% 4 0.38% 5 0.48% 1 0.44% 2 0.43% 3 2.45%
1993-1 -0.06% 3 -0.05% 4 0.06% 5 0.21% 1 -0.34% 2 -0.18%
1997-1 0.70% 1 -0.48% 2 0.27% 3 0.72% 4 0.79% 5 1.99%
2001-1 -0.23% 4 2.61% 5 -1.22% 1 0.80% 2 5.93% 3 7.89%
Avg 0.11% 0.50% 0.02% 0.39% 1.38% 2.40%
2005-1 1.22% 4 0.49% 5 0.17% 1 -0.75% 2 -1.70% 3 -0.56%
2009-1 -0.31% 2 -0.08% 3 -3.06% 4 -0.46% 5 0.98% 1 -2.93%
2013-1 -0.15% 5 -0.27% 1 1.23% 2 -0.08% 3 -1.07% 4 -0.33%
2017-1 0.00% 4 0.66% 5 0.32% 1 0.23% 2 0.04% 3 1.25%
2021-1 -0.24% 3 -0.44% 4 0.82% 5 -2.14% 1 1.25% 2 -0.74%
Avg 0.10% 0.07% -0.10% -0.64% -0.10% -0.66%
OTC summary for PY1 1965 – 2021
Averages 0.24% 0.20% 0.04% 0.01% 0.55% 1.04%
% Winners 53% 47% 73% 47% 80% 47%
MDD 10/2/2009 3.88% — 10/5/2005 2.43% — 10/4/2021 2.14%
OTC summary for all years 1963 – 2024
Averages -0.20% -0.01% -0.05% -0.10% 0.27% -0.09%
% Winners 43% 50% 52% 53% 63% 53%
MDD 10/5/1998 11.64% — 10/3/2008 10.81% — 10/3/2000 8.54%
SPX PY1
Day2 Day1 Day1 Day2 Day3 Totals
1929-1 0.56% 6 -0.92% 1 -0.60% 2 0.73% 3 -4.14% 4 -4.36%
1933-1 -0.72% 5 1.13% 6 -2.14% 1 0.52% 2 6.41% 3 5.21%
1937-1 0.51% 3 -0.22% 4 -0.29% 5 0.29% 6 -1.24% 1 -0.94%
1941-1 0.00% 1 0.69% 2 -0.29% 3 -0.29% 4 -0.10% 5 0.00%
1945-1 1.20% 5 0.69% 6 1.05% 1 0.00% 2 -0.18% 3 2.75%
1949-1 0.58% 4 -0.26% 5 -0.39% 6 0.52% 1 0.96% 2 1.42%
1953-1 0.17% 2 -0.60% 3 0.60% 4 0.43% 5 -0.47% 1 0.13%
1957-1 -0.05% 5 -0.31% 1 0.80% 2 0.80% 3 0.09% 4 1.34%
1961-1 0.17% 4 0.23% 5 0.06% 1 -0.06% 2 0.67% 3 1.07%
Avg 0.41% -0.05% 0.43% 0.34% 0.22% 1.34%
1965-1 -0.45% 3 -0.07% 4 -0.07% 5 0.20% 1 0.61% 2 0.22%
1969-1 -0.80% 1 -0.31% 2 -0.64% 3 0.78% 4 -0.05% 5 -1.03%
1973-1 0.23% 4 -0.60% 5 -0.20% 1 0.54% 2 -0.01% 3 -0.04%
1977-1 0.57% 4 0.71% 5 0.22% 1 -0.73% 2 -0.36% 3 0.40%
1981-1 0.35% 2 0.21% 3 0.77% 4 1.95% 5 0.13% 1 3.41%
Avg -0.02% -0.01% 0.02% 0.55% 0.06% 0.59%
1985-1 0.35% 4 0.44% 1 1.64% 2 -0.55% 3 0.16% 4 2.04%
1989-1 1.01% 4 0.16% 5 0.49% 1 1.09% 2 0.63% 3 3.39%
1993-1 -0.31% 3 -0.26% 4 0.51% 5 0.01% 1 -0.03% 2 -0.07%
1997-1 0.86% 1 -0.64% 2 0.86% 3 0.53% 4 0.47% 5 2.08%
2001-1 1.15% 4 2.19% 5 -0.23% 1 1.23% 2 1.99% 3 6.33%
Avg 0.61% 0.38% 0.66% 0.46% 0.65% 2.76%
2005-1 0.89% 4 0.09% 5 -0.17% 1 -1.00% 2 -1.49% 3 -1.68%
2009-1 -0.22% 2 -0.33% 3 -2.58% 4 -0.45% 5 1.49% 1 -2.09%
2013-1 -0.41% 5 -0.60% 1 0.80% 2 -0.07% 3 -0.90% 4 -1.18%
2017-1 0.12% 4 0.37% 5 0.39% 1 0.22% 2 0.12% 3 1.22%
2021-1 0.16% 3 -1.19% 4 1.15% 5 -1.30% 1 1.05% 2 -0.13%
Avg 0.11% -0.33% -0.08% -0.52% 0.06% -0.77%
SPX summary for PY1 1929 – 2021
Averages 0.25% 0.03% 0.07% 0.22% 0.24% 0.81%
% Winners 67% 46% 54% 63% 54% 63%
MDD 10/3/1929 4.89% — 10/2/2009 3.55% — 10/5/2005 2.64%
SPX summary for all years 1928 – 2024
Averages -0.23% -0.02% 0.08% 0.13% 0.23% 0.19%
% Winners 52% 46% 52% 63% 56% 59%
MDD 10/3/1931 10.76% — 10/3/2008 9.38% — 10/3/1974 6.29%
October
Since 1963, over all years, the OTC in October has been up 55% of the time with an average gain of 0.9%. During the 1st year of the Presidential Cycle October has been up 60% time with an average gain of 2.6% (helped considerably by an 11.7% gain in 1969 and a 12.8% gain in 2001). The best October ever for the OTC was 1974 (+17.2%), the worst 1987 (-27.2%).
The average month has 21 trading days. The chart below has been calculated by averaging the daily percentage change of the OTC for each of the 1st 11 trading days and each of the last 10. In months when there were more than 21 trading days some of the days in the middle were not counted. In months when there were less than 21 trading days some of the days in the middle of the month were counted twice. Dashed vertical lines have been drawn after the 1st trading day and at 5 trading day intervals after that. The line is solid on the 11th trading day, the dividing point.
In the chart below the blue line shows the average of the OTC in October over all years since 1963 while the green line shows the average during the 1st year of the Presidential Cycle over the same period.
Since 1928 the SPX has been up 57% of the time in October with an average gain of 0.5%. During the 1st year of the Presidential Cycle the SPX has been up 54% of the time with an average loss of -0.7%. The best October ever for the SPX was 1974 +16.3% the worst 1987 -21.8%.
The chart below is similar to the one above except it shows the average daily performance over all years for the SPX in October in red and the performance during the 1st year of the Presidential Cycle in green
Since 1979 the Russell 2000 (R2K) has been up 57% of the time in October with an average loss of -0.2%. During the 1st year of the Presidential Cycle the R2K has been up 64% of the time with an average gain of 0.6%. The best October ever for the R2K, 2011 (+15.0%), the worst 1987 (-30.7%)
The chart below is similar to those above except it shows the daily performance over all years of the R2K in October in magenta and the performance during the 1st year of the Presidential Cycle in green.
Since 1885 the DJIA has been up 55% of the time in October with an average gain of 0.4%. During the 1st year of the Presidential Cycle the DJIA has been up 57% of the time in October with an average loss of -0.2%. The best October ever for the DJIA, 1885 (+12.3%), the worst 1987 (-23.2%).
The chart below is similar to those above except it shows the daily performance over all years of the DJIA in October in grey and the performance during the 1st year of the Presidential Cycle in green.
Conclusion
The market had an unsurprising pullback last week from its confirmed all time highs the week before.
The strongest sectors last week were Precious Metals (for the 5th week) and Utilities while the weakest were Internet and Basic Materials.
I expect the major averages to be higher on Friday October 3 than they were on Friday September 26.
Last week’s positive forecast was a miss.
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