Nvidia Crash ... Home Sales ... 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.
“Of Mr. Trump’s executive orders, some were sound... But
let me tell you what happens when you pardon virtually everyone who did Jan. 6:
You get more Jan. 6ths. When people who commit crimes see that their punishment
will be minimal they are encouraged. It was a wicked act. Conservatives are
tough on crime because of the pain and disorder it causes. In that case it
pained an entire nation. Jan. 6 too shamed us in the eyes of the world. This
pardon was not a patriotic act.” Peggy Noonan, WSJ. Commentary at...
https://www.wsj.com/opinion/the-white-house-wonder-horse-donald-trump-america-inaugural-address-f4569d27?mod=opinion_recentauth_pos3&mod=opinion_recentauth_pos_3
My cmt: It was neither patriotic nor the act of a real
conservative. It was the act of a coward who may have been worried that if he
didn’t offer a pardon, some of those incarcerated may have broken their silence
and testified against him. How’s that for a conspiracy theory? Regular readers
know that I have previously noted that there have been numerous reports by
major news sources that there were phone communications between the White House
and January 6 rioters, both before, and during the riot.
“The press is reporting that Republicans in Congress are
getting nervous about spending reductions in social programs as too politically
risky. Another GOP faction wants to retain Joe Biden’s green subsidies. And
this is only week one of the new Administration. If this keeps up, why not let
Democrats run the place? ... Progressives claim that Republicans want to take
food and healthcare away from the poor and sick. But the reality is that Mr.
Biden’s welfare expansions have mostly benefited those who can support
themselves but for any number of reasons choose not to. Republicans need not
fall into the trap of talking about this like accountants. This is a moral
issue of helping people who really need it but not those who don’t.” – WSJ
Editorial Board. Commentary at...
https://www.wsj.com/opinion/biden-welfare-spending-transfer-payments-republicans-savings-tax-reform-3f10d9eb?mod=opinion_lead_pos12
CHINESE AI UPSTART SPARKS TRILLION DOLLAR MARKET ROUT
(The Daily Beast)
“A Chinese artificial
intelligence startup’s latest AI model spooked markets Monday, leaving U.S.
and European technology
stocks on track for a $1 trillion wipeout, a week after President Donald Trump threw
his weight behind a $500 billion private sector investment in AI infrastructure.
DeepSeek’s latest AI model topped Apple’s App Store charts over the weekend,
challenging the dominance of Silicon
Valley giants like ChatGPT-maker OpenAI and leading to concerns
that some of America’s largest publicly traded companies are overvalued. Chinese
AI researchers have more widely shared their work—DeepSeek is an open-source
model, meaning anyone can view, use and modify its source code. And, because of
U.S. sanctions disrupting their access to advanced semiconductor chips,
developed AI models that require far less computing power.” Story at...
Chinese
AI Upstart Sparks $1 Trillion Market Rout After Trump Hyped AI Megadeal
NEW HOME SALES (Realtor.com)
“New-home sales rose again in December to a seasonally
adjusted annual rate of 698,000, a 3.6% increase from November 2024 and a 6.7%
increase from December 2023.” Story at...
https://www.realtor.com/research/new-home-sales-december-2024/
MARKET REPORT / ANALYSIS AS OF 1PM FRIDAY
-Monday the S&P 500 declined about 1.5% to 6012.
-VIX rose about 21% to 20.54.
-The yield on the 10-year Treasury declined (compared to
about this time, prior trading day) to 4.534%.
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.
My Nvidia trade got blown up today. It had been drifting
lower before today. Now we know why. See
the article above. “A Chinese artificial
intelligence startup’s latest AI model spooked markets Monday...” CNBC
reporters congratulated themselves for being “out front” on this story. I watch a lot of CNBC and I don’t remember
hearing about this issue; the reporter today said that it was widely known in Silicon
Valley. In a different part of the story, Josh Brown said that NVDA is not held
by institutional investors, but instead, is held by “retail.” To translate, the
smart money unloaded their positions to the suckers like me - then it was
leaked to the press.
As a practical matter, this appears to be overblown. Regarding
competition to Nvidia, Dan Ives (Managing Director and Senior Equity Research
Analyst covering the Technology sector at Wedbush Securities) says, “The
threat is minimal.” He recommended buying Nvidia. I will hold NVDA and see what
develops.
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
Today, of the 50-Indicators I track, 7 gave Bear-signs
and 16 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 +9 (9 more Bull
indicators than Bear indicators).
TODAY’S COMMENT
Overall, the daily, bull-bear spread of 50-indicators is
a bullish +9. The 10-dMA of the spread is also moving higher, another bull-sign.
Monday 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. Bottoms almost
always occur on Statistically-significant, down-days, but not all
statistically-significant, down-days occur at bottoms. The daily chart showed
that the S&P 500 bounced higher from below its 50-dMA (and lower trend-line)
suggesting that the markets will move higher from here.
I thought that my Panic Indicator would have been
triggered today, but it wasn’t. That’s probably good news. Today’s panic was not widespread and seemed
to be concentrated in chip names.
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
MONDAY MARKET INTERNALS (NYSE
DATA)
My basket of Market Internals improved to BUY. (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.
