The good news is:

The Dow Jones Industrial Average (DJIA) and S&P 500 (SPX) closed at new all time highs last Thursday.​

​The Negatives

Hindenburg Omens were triggered every day last week.
The blue chips have been outperforming the secondaries.

The first chart covers the past 9 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.

I extended the duration of this chart to 9 months to show the progressive deterioration of OTC NH while the index was rising.

 The next chart is similar to the one above one except it shows the SPX in red and NY NH, in green, has been calculated with NYSE data.

 NY NH fell as the SPX hit a new all time high.  

The next chart covers the past 6 months showing the OTC in blue and a 10% trend of Nasdaq new lows (OTC NL) in brown. OTC NL has been plotted on an inverted Y axis so diminishing new lows move the indicator upward (up is good). 

OTC NL did turn upward last week, but, the number of new lows remained uncomfortably high.

The next chart is similar to the one above except it shows the SPX in red and NY NL, in blue, has been calculated with NYSE data.

NY NL continued moving downward last week as prices moved upward.

This is a very unusual chart pattern.

The Positives

In spite of deterioration of the breadth indicators prices have not broken their upward trends.

The next chart covers the past 6 months showing the SPX in red and a 40% trend (4 day EMA) of NYSE new highs divided by new highs + new lows (NY HL Ratio), in blue.  Dashed horizontal lines have been drawn at 10% levels for the indicator; the line is solid at the 50%, neutral, level.

This chart is neutral finishing the week at 50%.

The next chart is similar to the one above except is shows the OTC in blue and OTC HL Ratio, in red, has been calculated with Nasdaq data.

OTC HL Ratio remained in modestly positive territory finishing the week at 62%, unchanged from a week ago.

Seasonality

Next week includes the last 5 trading days of September during the 2nd 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 2018 while SPX data runs from 1928 to 2018.  There are summaries for both the 2nd year of the Presidential Cycle and all years combined.

Average returns for the coming week have been negative by all measures.

Report for the last 5 days of September.
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 2
               Day5      Day4      Day3      Day2      Day1      Totals
 1966-2       0.11% 1   0.34% 2   0.27% 3  -1.06% 4  -0.96% 5    -1.29%
 1970-2       1.10% 4   2.26% 5   0.55% 1   0.49% 2   0.57% 3     4.97%
 1974-2      -1.36% 2  -0.15% 3  -1.51% 4  -1.30% 5  -2.54% 1    -6.86%

 1978-2      -0.14% 1   0.61% 2  -0.68% 3  -0.01% 4   0.67% 5     0.45%
 1982-2       0.24% 5   0.02% 1   0.21% 2  -0.41% 3  -0.32% 4    -0.26%
 1986-2       0.33% 3  -0.85% 4   0.03% 5  -1.08% 1   0.90% 2    -0.67%
 1990-2      -2.79% 1   0.74% 2  -1.34% 3  -2.53% 4   0.97% 5    -4.93%
 1994-2      -0.24% 1  -0.03% 2   0.61% 3  -0.09% 4   0.65% 5     0.90%

 Avg         -0.52%     0.10%    -0.23%    -0.82%     0.58%      -0.90%

 1998-2      -2.27% 4   1.35% 5  -0.25% 1  -0.29% 2  -2.32% 3    -3.79%
 2002-2      -0.23% 2   3.39% 3  -0.06% 4  -1.84% 5  -2.26% 1    -0.99%
 2006-2       1.36% 1   0.55% 2   0.09% 3   0.29% 4  -0.51% 5     1.78%
 2010-2       2.33% 5  -0.48% 1   0.41% 2  -0.13% 3  -0.33% 4     1.80%
 2014-2       1.03% 3  -1.94% 4   1.02% 5  -0.14% 1  -0.28% 2    -0.31%

 Avg          0.44%     0.57%     0.24%    -0.42%    -1.14%      -0.30%

OTC summary for Presidential Year 2 1966 - 2014
Averages     -0.04%     0.45%    -0.05%    -0.62%    -0.44%      -0.71%
% Winners       54%       62%       62%       15%       38%         38%
MDD  9/30/1974  6.69% --  9/27/1990  5.81% --  9/30/2002  4.11%

OTC summary for all years 1963 - 2017
Averages     -0.05%    -0.06%    -0.17%    -0.16%    -0.02%      -0.46%
% Winners       55%       50%       49%       44%       47%         47%
MDD 9/29/2008  9.28% --  9/30/1974  6.69% --  9/30/2003  6.04%


SPX Presidential Year 2
               Day5      Day4      Day3      Day2      Day1      Totals
 1930-2      -1.89% 4  -1.52% 5  -0.72% 6  -2.23% 1  -1.43% 2    -7.79%
 1934-2       2.81% 2  -0.66% 3   0.99% 4  -1.09% 5   0.22% 6     2.27%

 1938-2      -2.99% 1  -0.27% 2   4.46% 3   3.66% 4   2.86% 5     7.71%
 1942-2       0.45% 5  -0.22% 6   0.11% 1  -0.45% 2   0.00% 3    -0.11%
 1946-2       2.15% 2   2.58% 3   1.13% 4  -1.05% 5  -0.99% 1     3.82%
 1950-2      -0.10% 1  -1.44% 2   1.41% 3   0.05% 4   0.15% 5     0.07%
 1954-2       0.68% 5   0.40% 1   0.49% 2  -0.58% 3  -0.58% 4     0.41%

 Avg          0.04%     0.21%     1.52%     0.33%     0.29%       2.38%

 1958-2       0.44% 3  -0.42% 4   0.18% 5   0.42% 1   0.38% 2     1.01%
 1962-2      -1.84% 1   0.58% 2  -1.42% 3  -0.68% 4   0.90% 5    -2.46%
 1966-2       0.24% 1   0.31% 2  -1.27% 3  -1.04% 4   0.33% 5    -1.42%
 1970-2       1.30% 4   0.07% 5  -0.13% 1   0.52% 2  -0.11% 3     1.66%
 1974-2      -2.02% 2  -0.66% 3  -1.64% 4  -2.29% 5  -2.16% 1    -8.76%

 Avg         -0.37%    -0.02%    -0.86%    -0.61%    -0.13%      -2.00%

 1978-2       0.02% 1   0.75% 2  -0.94% 3   0.30% 4   0.57% 5     0.69%
 1982-2      -0.40% 5   0.24% 1  -0.31% 2  -1.31% 3  -0.97% 4    -2.74%
 1986-2       0.26% 3  -1.88% 4   0.17% 5  -1.00% 1   0.61% 2    -1.84%
 1990-2      -2.16% 1   1.20% 2  -1.04% 3  -1.34% 4   1.69% 5    -1.65%
 1994-2       0.25% 1   0.27% 2   0.60% 3  -0.56% 4   0.10% 5     0.66%

 Avg         -0.41%     0.12%    -0.30%    -0.78%     0.40%      -0.97%

 1998-2      -2.19% 4   0.19% 5   0.38% 1   0.03% 2  -3.05% 3    -4.64%
 2002-2      -1.73% 2   2.49% 3   1.82% 4  -3.23% 5  -1.46% 1    -2.11%
 2006-2       0.88% 1   0.75% 2   0.02% 3   0.19% 4  -0.25% 5     1.60%
 2010-2       2.12% 5  -0.57% 1   0.49% 2  -0.26% 3  -0.31% 4     1.47%
 2014-2       0.78% 3  -1.62% 4   0.86% 5  -0.25% 1  -0.28% 2    -0.51%

 Avg         -0.03%     0.25%     0.71%    -0.70%    -1.07%      -0.84%

SPX summary for Presidential Year 2 1930 - 2014
Averages     -0.13%     0.03%     0.26%    -0.55%    -0.17%      -0.58%
% Winners       59%       55%       64%       32%       45%         50%
MDD  9/30/1974  8.47% --  9/30/1930  7.56% --  9/30/2002  4.64%

SPX summary for all years 1928 - 2017
Averages     -0.17%    -0.11%     0.07%    -0.22%    -0.01%      -0.43%
% Winners       47%       46%       58%       52%       46%         50%
MDD 9/30/1931  11.08% --  9/29/2008  8.79% --  9/30/1974  8.47%

Conclusion

We have had Hindenburg Omens triggered on 13 of the last 14 trading days.
The breadth indicators have been deteriorating for quite a while.
Seasonality turns positive in a few weeks so, if the market is going to hiccup it should happen very soon.

I expect the major averages to be lower on Friday September 28 than they were on Friday September 21.

Last week the DJIA and SPX were up while the OTC and Russell 2000 were down. So I am calling last weeks negative forecast a tie.