“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
“Mr. Biden was wrong to say Georgia Republicans passed
“new laws designed to suppress your vote, to subvert our elections.” He
substituted adjectives for evidence. His claims don’t survive even minimal
scrutiny.” – Karl Rove. Read the full opinion piece at...
JOBLESS CLAIMS (Yahoo Finance)
“Initial unemployment claims unexpectedly jumped to total
230,000 last week, but still remained low compared to their pandemic-era
averages.” Story at...
https://finance.yahoo.com/news/weekly-unemployment-claims-week-ended-jan-8-2022-233140248.html
PPI (FoxBusiness)
“The Labor Department said Thursday that its producer
price index, which measures inflation at the wholesale level before it reaches
consumers, surged 9.7% in December from the year-ago period. It marked the
highest figure on record since the government began tracking the data in 2010.”
Story at...
https://www.foxbusiness.com/economy/producer-prices-inflation-manufacturers-december
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website as
of 6:30 PM ET Thursday. 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.
Over 1-million new cases today. Wow! I know a lot of people
who have confirmed cases of Covid, most likely Omicron. I didn’t test until 2
weeks after I first had symptoms and my test was negative. My ER nurse daughter said my sinus infection
is a classic Omicron symptom so I probably had it. I still have a lingering
cough, but otherwise I’m fine.
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 fell about 1.4% to 4659.
-VIX rose about 15% to 20.31.
-The yield on the 10-year Treasury slipped to 1.703%.
The S&P 500 closed 0.5% below its 50-dMA. That’s not
a good sign, but the index is sitting on the lower, short-term, trend-line and
that may provide some support.
The 50-dMA of breadth (issues advancing on the NYSE) is
still below 50%. As I’ve said before, this is almost the definition of a
pullback. Today, the 150-dMA of breadth dropped below 50%. This often signals a
bigger dip, but not necessarily a crash. This is another warning that a 10%
correction may be more likely.
As of Thursday, the S&P 500 is down about 2.9%. It is
8 days since the top.
The daily sum of 20 Indicators improved from -1 to -2
today (a positive number is bullish; negatives are bearish); the 10-day
smoothed sum that smooths the daily fluctuations declined from -17 to -22 (The
trend direction 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 5-10-20 Timer system switched to Neutral.
The Long Term NTSM indicator ensemble
dropped to SELL. Volume & VIX are bearish; Price & Sentiment are
Neutral. This signal isn’t always right, but I follow it because it has proven valid most of the time. It is a better
sell-signal than buy-signal.
Today was a statistically significant down-day. That just
means that the price-volume move exceeded my statistical parameters. Statistics
show that a statistically-significant, down-day is followed by an up-day about
60% of the time.
Statistically-significant, down-days almost always coincide with, or occur
near, bottoms.
When I compared today’s low to the prior low, the numbers
didn’t quite indicate the pullback was over- but it could be. Mr. Market doesn’t
always pay attention to my numbers.
If today was the bottom, the
market action should tell us – if Friday is a big up-day, it would suggest that
the pullback is over. If not...
...I’d be selling if I wasn’t
already conservatively positioned. Futures are flat as I write this so we are
not getting a clue from the futures market.
We’ll see...
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
THURSDAY MARKET INTERNALS
(NYSE DATA)
Market Internals remained HOLD.
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 35% invested in stocks. This is close to my “normal”
fully invested stock-allocation of 50%. I trade about 15-20% of the total
portfolio using the momentum-based analysis I provide here.
The S&P 500 is still about
1% above its 50-dMA. If that level fails, it will tend to confirm the
downtrend.
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.
