Home Sales ... Michigan Sentiment ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...
“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
“Far more money has been lost by investors in preparing for
corrections, or anticipating corrections, than has been lost in the corrections
themselves.” - Peter Lynch, former manager of Fidelity’s Magellan®
fund.
“When I saw the film, I thought it was great and that
Steve Carell was wonderful. But I thought, hey, I wasn’t that angry.
After the crash I was interviewed by the Federal Crisis Inquiry Commission, and
I saw a transcription later on. After reading it, I realized that ‘yes,’ I
really was that angry...” - Steven Eisman, discussing “The Big Short.” He was the
real Big Short investor played by Steve Carell (Mark Baum) in the “Big Short”
movie.
HOME SALES (CNN)
“Sales of previously owned homes, which make up the vast
majority of the market, totaled 4.06 million in 2024, the National Association
of Realtors said Friday. That’s the lowest level since 1995 and slightly below
2023’s similarly anemic levels.” Story at...
https://www.cnn.com/2025/01/24/economy/us-home-sales-worst-year-in-three-decades/index.html
MICHIGAN FINAL SENTIMENT (Advisor Perspectives)
“Consumer sentiment fell for the first time in six
months, according to the final January report for the Michigan Consumer
Sentiment Index, coming in at 71.1. The index dropped 2.9 points (-3.9%) from
December's final reading to 74.0 and is down 10.0% compared to one year ago.
The latest reading was lower than the 73.2 forecast.” Analysis and charts at...
https://www.advisorperspectives.com/dshort/updates/2025/01/24/michigan-consumer-sentiment-january-2025-final
MARKET REPORT / ANALYSIS AS OF 1PM FRIDAY
-Friday the S&P 500 declined about 0.3% to 6101.
-VIX declined about 1% to 14.85.
-The yield on the 10-year Treasury rose (compared to
about this time, prior trading day) to 4.617%.
MY TRADING POSITIONS:
XLK – Holding since the October 2022 lows. Added more 9/20.
SSO – added 12/20. (IRA acct.)
SPY – added 12/20. (IRA acct.)
QLD – added 12/20. (IRA acct.)
NVDA – added 1/6/2025
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
Today, of the 50-Indicators I track, 7 gave Bear-signs
and 17 were Bullish. The rest are neutral. (It is normal to have a lot of
neutral indicators since many of the indicators are top or bottom indicators
that will signal only at extremes.)
The daily Bull/Bear, 50-Indicator spread (Bull Indicators
minus Bear Indicators, red curve in the chart above) declined to +10 (10 more Bull
indicators than Bear indicators).
TODAY’S COMMENT
I’ve been re-watching “The Big Short” on cable. The “can’t
lose” mentality shown in the movie is being mirrored by current stock market
action: Everyone on CNBC is bullish; Valuations are extreme by any measure; the
Government is considering establishing a bitcoin “asset stockpile” (bitcoins
have no real value); it’s been a generation (24 years) since there was a
valuation crash; Wall Street (Calamos Investments) is offering funds with 100%
downside protection.
The end could be near, but we don’t know. I bring this up
because at yesterday’s all-time S&P 500 high, the number of new 52-week
highs for issues on the NYSE was lower than I would like. They weren’t low
enough to trigger my Bear-indicator, but it was close.
In the Big Short, it was possible to predict a collapse
due to the sharply rising interest rates since the Fed was in a hiking cycle.
The mortgage-based instruments (Collateralized Mortgage Obligations) failed as interest
rates on sub-prime, adjustable-rate mortgages reset. My guess is the next crash will be a valuation
crash – markets will run out of buyers when the prices get too high. That was the
main cause of the dot.com crash although the Fed lit the fire by hiking
interest rates.
Now, markets could keep going up for another year or two,
or even longer. I’ll just keep watching indicators. Until I see more signs of
trouble, I’ll be fully invested.
Overall, the daily, bull-bear spread of 50-indicators is
a bullish +10. The 10-dMA of the spread is also moving higher, another bull-sign.
BOTTOM LINE
I remain bullish.
ETF - 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
DOW STOCKS - TODAY’S MOMENTUM RANKING
OF THE DOW 30 STOCKS (Ranked Daily)
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
FRIDAY MARKET INTERNALS (NYSE
DATA)
My basket of Market Internals declined to HOLD. (My basket of Market
Internals is a decent trend-following analysis that is most useful when it
diverges from the Index.)
...My current invested
position is about 75% stocks, including stock mutual funds and ETFs. 50%
invested in stocks is a normal position. (75% is my max stock allocation when I
am confident that markets will continue higher; 30% in stocks is my Bear market
position.)
I trade about 15-20% of the total portfolio using the
momentum-based analysis I provide here. When I see bullish signs, I add a lot more
stocks to the portfolio, usually by using an S&P 500 ETF as I did back in
October 2022 and 2023.
