“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
GDP (msn.com)
“The U.S. economy expanded at an annual 2.3% pace in the
third quarter, up from the prior estimate of 2.1%, according to updated data
released by the Commerce Department Wednesday.” Story at...
CONSUMER CONFIDENCE (Conference Board)
“The Conference Board Consumer Confidence Index® increased again in December,
after an upward revision in November. The Index now stands at 115.8 (1985=100),
up from 111.9..."The Present Situation Index dipped slightly but remains
very high, suggesting the economy has maintained its momentum in the final
month of 2021. Expectations about short-term growth prospects improved, setting
the stage for continued growth in early 2022. The proportion of consumers
planning to purchase homes, automobiles, major appliances, and vacations over
the next six months all increased." Press release at...
EXISTING HOME SALES (CNBC)
“Sales of previously owned homes in November rose 1.9%
from October to 6.46 million units, according to the National Association of
Realtors’ seasonally adjusted count. Sales were 2.0% lower than November 2020...
The median price of an existing home sold in November was $353,900. That is a
13.9% gain from November of 2020.” Story at...
EIA CRUDE INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those
in the Strategic Petroleum Reserve) decreased by 4.7 million barrels from the
previous week. At 423.6 million barrels, U.S. crude oil inventories are about
8% below the five-year average for this time of year.” Report at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website as
of 6:00 PM ET Wednesday. U.S. total case numbers are on the left axis; daily
numbers are on the right side of the graph in Red with the 10-dMA of daily
numbers in Green. I added the smoothed 10-dMA of new cases (in purple) to the
chart.
Ruh-roh...Daily new cases jumped to over 260,000 today. Today’s
spike is apparently a legitimate number. We'll find out in a day or two. The other
recent spike was an anomaly after lower reporting over the weekend and my varying
times for recording of the data.
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 rose about 1% to 4697.
-VIX fell about 11% to 18.63.
-The yield on the 10-year Treasury slipped to 1.455%.
Another nice bounce today suggests the Santa rally has finally
arrived. Up-volume was 75% of the total today and that’s a good sign. Greater
than 80% would have given us a clear signal, but perhaps 75% is close enough. We’re
not out of the woods yet, though.
Breadth remains weak: 10-dMA, 50-dMA and 100-dMA of Breadth
(% of stocks advancing over the different time periods) are all below 50%,
indicating most stocks have not been advancing. This is a dangerous sign that
preceded the 2000 dot.com crash. That doesn’t mean a crash is coming soon, but
it is cause for being more cautious than usual.
On the chart, the Index is headed toward the 4712 prior-high.
That 4700 region has been a zone of strong resistance since early November. We
need to see the S&P 500 break above that level and move on.
There were a few more bull signs: The 5-10-20 Timer
system turned bullish; McClellan Oscillator is bullish; there is more buying
pressure than selling pressure.
The daily sum of 20 Indicators improved from -10 to -9
today (a positive number is bullish; negatives are bearish); the 10-day
smoothed sum that smooths the daily fluctuations declined from -30 to -39 (The
trend is more important than the actual number for the 10-day value.) These
numbers sometimes change after I post the blog based on data that comes in
late. Most of these indicators are short-term so they tend to bounce around a
lot.
The Long Term NTSM indicator
ensemble remained HOLD. VIX, Volume, Price & Sentiment are Neutral.
I am neutral until we see more bull signs. No trading on Friday since Christmas is
Saturday.
MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs
(Ranked Daily)
The top ranked ETF receives
100%. The rest are then ranked based on their momentum relative to the leading
ETF.
*For additional background on
the ETF ranking system see NTSM Page at…
http://navigatethestockmarket.blogspot.com/p/exchange-traded-funds-etf-ranking.html
TODAY’S RANKING OF THE DOW 30
STOCKS (Ranked Daily)
Here’s the revised DOW 30 and
its momentum analysis. The top ranked stock receives 100%. The rest are then
ranked based on their momentum relative to the leading stock.
For more details, see NTSM
Page at…
https://navigatethestockmarket.blogspot.com/p/a-system-for-trading-dow-30-stocks-my_8.html
WEDNESDAY MARKET INTERNALS
(NYSE DATA)
Market Internals remained SELL.
Market Internals are a decent
trend-following analysis of current market action, but should not be used alone
for short term trading. They are usually right, but they are often late. They are most useful when they diverge from
the Index.
My stock-allocation in the
portfolio is now about 45% invested in stocks; this is slightly BELOW my
“normal” fully invested stock-allocation of 50%. I trade with about 15-20% of
the total portfolio.
You may wish to have a higher
or lower % invested in stocks depending on your risk tolerance. 50% is a
conservative position that I consider fully invested for most retirees.
As a general rule, some
suggest that the % of portfolio invested in the stock market should be one’s
age subtracted from 100. So, a 30-year-old
person would have 70% of the portfolio in stocks, stock mutual funds and/or
stock ETFs. That’s ok, but for older
investors, I usually don’t recommend keeping less than 50% invested in stocks
(as a fully invested position) since most people need some growth in the
portfolio to keep up with inflation.
