• The S&P 500 (SPX) and Dow Jones Industrial Average (DJIA) closed at all time highs last Friday.
The negatives
The secondaries continue to under perform the blue chips. Of the major indices only the Russell 2000 (R2K) was down last week.
The positives
. . .
Seasonality
Average returns for the coming week have been mixed, but mostly positive.
March
Since 1963, over all years, the OTC in March has been up 63% of the time with an average gain of 0.9%. During the 1st year of the Presidential Cycle March the OTC has been up 54% of the time with an average loss of -0.2%. The best March ever for the OTC was 2009 (+10.9%), the worst, 1980 (-17.1%).
Conclusion
The breadth indicators deteriorated a bit last week and the secondaries were weaker than the blue chips. Seasonality turns modestly positive next week and is strong for the first half of March. However the market has not been following the seasonal pattern.
I expect the major averages to be higher on Friday March 3 than they were on Friday February 24.
Last week the R2K was down while all of the other major indices were up so I am calling last weeks positive forecast a tie.
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