“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
LEADING ECONOMIC INDICATORS (Conference Board)
“The Conference Board Leading Economic Index (LEI)for the U.S. decreased by 1.0 percent in December 2022 to 110.5 (2016=100), following a decline of 1.1 percent in November. The LEI is now down 4.2 percent over the six-month period between June and December 2022—a much steeper rate of decline than its 1.9 percent contraction over the previous six-month period (December 2021–June 2022)...There was widespread weakness among leading indicators in December, indicating deteriorating conditions for labor markets, manufacturing, housing construction, and financial markets in the months ahead.’” Press release at...
https://www.conference-board.org/topics/us-leading-indicators
BEAR MARKET ISN’T OVER (Market Insider / msn.com)
“Investors shouldn't let the current stock market surge fool them into buying the rally because corporate earnings are still set to decline, according to Morgan Stanley's Michael Wilson. In a note on Sunday, the firm's top strategist explained that...the bear market isn't over yet, he said.” Story at...
Don't buy into the current stock rally as the final stages of the bear market have yet to play out, Morgan Stanley's top strategist says (msn.com)
My cmt: Market participants clearly don’t agree with the call by Mike Wilson. Investors don’t expect that earnings will fall that far. I will trade what I see (improving market conditions) rather than what I think – earnings may fall.
BIDEN AGAIN CONFUSES WEATHER WITH CLIMATE (msn.com)
“When touring damaged areas [in California] last week, President Joe Biden stated, “If anybody doubts the climate is changing, they must have been asleep for the past couple of years.”
But this has happened before. Geologic evidence shows that massive floods occur in California every century or two. A historic cataclysmic event was the great flood of the winter of 1861-1862 [long before human activity affected the climate]. During December and January of that winter, a series of massive storms slammed, one after another, into the west coast of the state. This occurred after two decades of drought during 1840-1860. The event would also be called an atmospheric river by today’s scientists.” Story at...
California: Atmospheric river and misguided climate fear (msn.com)
My comment: The Intergovernmental Panel on Climate Change (IPCC) defines climate in 30-year slices, not the “past couple of years” as Biden claims – that’s weather.
MARKET REPORT / ANALYSIS
-Monday the S&P 500 rose about 1.2% to 4020.
-VIX fell about 0.2% to 19.81.
-The yield on the 10-year Treasury rose to 3.521%.
PULLBACK DATA:
-Drop from Top: 16.2% as of today. 25.4% max (on a closing basis).
-Trading Days since Top: 264-days.
The S&P 500 is 1.3% ABOVE its 200-dMA & 2.2% ABOVE 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:
XLK – Technology ETF.
SSO – 2x S&P 500.
XLE – Energy Sector ETF. Low PE; good Dividend; decent momentum.
BA – (Boeing) I am late on this one, but we’ll see.
XLY - Consumer Discretionary ETF.
SHY – Short term bonds. 30-day yield is 4.2%. (Trailing
1-year yield is 1.3%.) I’ll hold this, but if the market retests the lows, I’ll
sell it and buy stocks.)
TODAY’S COMMENT:
I made a mistake in my count for Friday’s indicator rundown for the Bear count. I said that there had been 2 Distribution Days since the last Follow-thru day. That’s true, but it is not a bearish sign, because it takes more than that to send a bearish signal. This should have been in the neutral column. So, Friday’s count should have been slightly more bullish: 5 bear-signs and 17-Bull.
The Friday rundown is still giving a solidly bullish
indication. The shorter-term indicators are quite bullish, too...and we
continue to get more bullish signs today.
The 100-dMA of the percentage of stocks advancing on the NYSE
moved above 50% today. That just means that over the last 100-days, more than
half of all issues on the NYSE have gone up. Looking at all of the moving
averages that I track, - the 10-dMA, 20-day, 50-day, 100-day and 150dMA - all are above 50%. That’s the first time that has happened since 17 November 2021. At that time, the S&P 500 was 2% below its
all-time high in January 2022. Simply put, this is a very bullish
indication that tends to confirm the bottom is in and demonstrate continued
strong upward momentum. A key point to note; this didn’t happen in any of the previous
rallies we have seen in this Bear Market.
The short-term Fosback High/Low Logic index issued
another a buy signal today. The long-term version of the same indicator is very
nearly issuing a buy signal. These are very accurate indicators. The short-term
indicator first gave a buy signal on 29 September, very near the bottom. The
short-term indicator first gave a bearish warning on 13 January, 8 days after
the all-time high back in January 2022. Although I am already long, the new buy
signal is good conformation we’re on the right track.
Today, the daily sum of 20 Indicators remained +6 (a
positive number is bullish; negatives are bearish); the 10-day smoothed sum
that smooths the daily fluctuations decreased from +103 to 98. (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
improved to BUY: PRICE & VOLUME are positive. VIX & SENTIMENT are
neutral.
(The important BUY in this indicator was on 21 October, 7-days after the bottom. My NTSM buy-signal was 27 September, based on improved internals at the retest low, about 2% before the bottom.)
At least one Bear sign remains: The Advance / Decline Ratio is overbought, so some short-term weakness is possible.
Bottom line: I’m a BULL, but I am watching indicators
closely.
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
MONDAY MARKET INTERNALS (NYSE DATA)
My basket of 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 most useful when they diverge from
the Index.)
...My current invested
position is about 75% stocks, including stock mutual funds and ETFs. I’m
usually about 50% invested in stocks.
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.
“The Conference Board Leading Economic Index (LEI)for the U.S. decreased by 1.0 percent in December 2022 to 110.5 (2016=100), following a decline of 1.1 percent in November. The LEI is now down 4.2 percent over the six-month period between June and December 2022—a much steeper rate of decline than its 1.9 percent contraction over the previous six-month period (December 2021–June 2022)...There was widespread weakness among leading indicators in December, indicating deteriorating conditions for labor markets, manufacturing, housing construction, and financial markets in the months ahead.’” Press release at...
https://www.conference-board.org/topics/us-leading-indicators
“Investors shouldn't let the current stock market surge fool them into buying the rally because corporate earnings are still set to decline, according to Morgan Stanley's Michael Wilson. In a note on Sunday, the firm's top strategist explained that...the bear market isn't over yet, he said.” Story at...
Don't buy into the current stock rally as the final stages of the bear market have yet to play out, Morgan Stanley's top strategist says (msn.com)
My cmt: Market participants clearly don’t agree with the call by Mike Wilson. Investors don’t expect that earnings will fall that far. I will trade what I see (improving market conditions) rather than what I think – earnings may fall.
“When touring damaged areas [in California] last week, President Joe Biden stated, “If anybody doubts the climate is changing, they must have been asleep for the past couple of years.”
But this has happened before. Geologic evidence shows that massive floods occur in California every century or two. A historic cataclysmic event was the great flood of the winter of 1861-1862 [long before human activity affected the climate]. During December and January of that winter, a series of massive storms slammed, one after another, into the west coast of the state. This occurred after two decades of drought during 1840-1860. The event would also be called an atmospheric river by today’s scientists.” Story at...
California: Atmospheric river and misguided climate fear (msn.com)
My comment: The Intergovernmental Panel on Climate Change (IPCC) defines climate in 30-year slices, not the “past couple of years” as Biden claims – that’s weather.
-Monday the S&P 500 rose about 1.2% to 4020.
-VIX fell about 0.2% to 19.81.
-The yield on the 10-year Treasury rose to 3.521%.
-Drop from Top: 16.2% as of today. 25.4% max (on a closing basis).
-Trading Days since Top: 264-days.
The S&P 500 is 1.3% ABOVE its 200-dMA & 2.2% ABOVE 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.
XLK – Technology ETF.
SSO – 2x S&P 500.
XLE – Energy Sector ETF. Low PE; good Dividend; decent momentum.
BA – (Boeing) I am late on this one, but we’ll see.
XLY - Consumer Discretionary ETF.
I made a mistake in my count for Friday’s indicator rundown for the Bear count. I said that there had been 2 Distribution Days since the last Follow-thru day. That’s true, but it is not a bearish sign, because it takes more than that to send a bearish signal. This should have been in the neutral column. So, Friday’s count should have been slightly more bullish: 5 bear-signs and 17-Bull.
(The important BUY in this indicator was on 21 October, 7-days after the bottom. My NTSM buy-signal was 27 September, based on improved internals at the retest low, about 2% before the bottom.)
At least one Bear sign remains: The Advance / Decline Ratio is overbought, so some short-term weakness is possible.
BEST ETFs - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily)
ETF ranking follows:
*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
MONDAY MARKET INTERNALS (NYSE DATA)
