NAHB Housing Market ... Best DOW Stocks ... Best ETFs … Stock Market Analysis ...
“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
“The entire nation knows who is responsible for that day
[6 January]. Beyond that, I don’t have any immediate observations.” - Mitch
McConnell, Republican Senate Minority Leader regarding the House committee referring
Trump to DOJ for prosecution. .
HOUSING STARTS / BUILDING PERMITS (Yahoo Finance)
“U.S. single-family homebuilding tumbled to a 2-1/2-year
low in November and permits for future construction plunged as higher mortgage
rates continued to depress housing market activity.”
https://finance.yahoo.com/news/u-single-family-housing-starts-134923583.html
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 rose about 0.1% to 3822.
-VIX fell about 4% to 21.45,
-The yield on the 10-year Treasury rose to 3.692%.
PULLBACK DATA:
-Drop from Top: 20.3% as of today. 25.4% max (on a closing
basis).
-Trading Days since Top: 243-days.
The S&P 500 is 5% BELOW its 200-dMA & 1.3% BELOW
its 50-dMA.
*I won’t call the correction over until the S&P 500
makes a new-high; however, evidence suggests the bottom was in the 3600 area.
MY TRADING POSITIONS:
I am doing less trading now. You may do better watching
the momentum charts rather than my moves.
XLK – Technology ETF
SOLD
Some of my SPY position in the 401k.
TODAY’S COMMENT:
Since the S&P 500 broke below its 50-dMA, it seems
likely that markets will fall at least another 5% (to the October lows). I
suspect that the prior low will hold. The worry is that if I am wrong, markets
may fall a lot farther than the prior low of 3777.
On the other hand, there are a few good signs
developing: Indicators are starting to suggest a bottom: RSI is oversold today,
Tuesday. Bollinger Bands are not
oversold yet. I work these indicators together so I don’t have a buy signal,
but it may be getting closer. Maybe I was too hasty selling more stocks today?
Perhaps, but its about risk for me. I’l jump back in if markets shake-off the
recent weakness. The bullish possibility is that a Santa Clause rally would
carry the index higher; my suspicion is that such a rally would be short
lived. We won’t have another Fed meeting
until the end of January so it won’t be Fed news that drives the markets for a
while.
Today, the daily sum of 20 Indicators improved from +3 to
+6 (a positive number is bullish; negatives are bearish); the 10-day smoothed
sum that smooths the daily fluctuations declined from +79 to 74. (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 20 indicators are short-term so they tend to bounce around
a lot.
LONG-TERM INDICATOR: The Long Term NTSM indicator
remained HOLD: SENTIMENT is neutral; VIX & PRICE are bullish; VOLUME is
negative.
Bottom line: The S&P 500 is only 5% above its October
low. Based on previous tests in June and October, the October low (3577) is
likely to hold (more or less) even if the Index does fall that low. That
optimism may not remain if the Fed continues hiking and markets look shaky now due
to earnings worries.
I’m a reluctant Bear at this point.
I’m now have about 40% of the portfolio invested in
stocks. (As a retiree, 50% invested in stocks is my “normal” portfolio.)
BEST ETFs - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs
(Ranked Daily)
ETF ranking follows:
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
BEST DOW STOCKS - TODAY’S MOMENTUM
RANKING OF THE DOW 30 STOCKS (Ranked Daily)
DOW 30 momentum ranking follows:
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
TUESDAY MARKET INTERNALS (NYSE
DATA)
My basket of Market Internals improved to NEUTRAL. (Market Internals are a decent
trend-following analysis of current market action, but should not be used alone
for short term trading. They are most useful when they diverge from the Index.)
...My current invested
position is about 40% stocks, including stock mutual funds and ETFs. I’m
usually about 50% invested in stocks. Last week’s indicator some was bad enough
to convince me to take a more conservative view of the markets.
I trade about 15-20% of the
total portfolio using the momentum-based analysis I provide here. If I can see
a definitive bottom, I’ll add a lot more stocks to the portfolio using an
S&P 500 ETF.
