CRUDE INVENTORIES (OilPrice.com)
“The American Petroleum Institute (API) has estimated a
huge surprise crude oil inventory build of 4.7 million barrels for the week
ending December 11, compared to analyst expectations of a 1.288-million-barrel draw
in inventory.” Story at…
WORKING ON IMPEACHMENT FOR 2 YEARS (Federalist Papers)
“Watch as Nancy Pelosi admits Democrats have been working
on impeaching President Trump for over 22 months now…”
My cmt: 2 years? The impeachment isn’t for the Ukraine
phone call? The Democrats wouldn’t impeach just because they don’t like Trump
would they?
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 dipped about 1pt to 3191.
-VIX rose about 2% to 12.58.
-The yield on the 10-year Treasury rose to 1.921.
Once again there was a late-day selloff – it was not big,
but it did take-away the day’s profits. Again, unchanged volume was high. Some
consider this a sign of investor confusion that is typical at turning
points. It is a concern at this point
since a turn-down does seem overdue.
While the S&P 500 was little changed today, Market
Internals were good for the day: Advancers outpaced decliners by 1829 to 1142
on the NYSE; 61% of the volume was up volume; and there were 170 new-highs
compared to only 7 new-lows. Those are
good numbers – no dip yet!
My daily sum of 20 Indicators slipped +4 to +3 (a
positive number is bullish; negatives are bearish) while the 10-day smoothed
sum that negates the daily fluctuations improved from +15 to +20 (These
numbers sometimes change after I post the blog based on data that comes in
late.) A reminder: Most of these indicators are short-term.
The rest of today’s blog will look familiar…
As I’ve written before (way too much it seems), we’re due
for a pullback, but I think any pullback should be relatively small – say down
to the 50-dMA (3079), about 3-5% lower than current values. A drop to the
100-dMA at 3009 is not out of the question since the 100-dMA is actually on the
lower trend line, but it seems like there is a lot of pent-up buying energy
that should prevent a big drop.
We also note that the Fosback New-High/New-Low Logic
Index is much closer to giving a Buy indication than a Sell indication. This is
just another sign that any selloff should be short-lived.
I remain bullish in the long-term; short-term - it’s the
broken record report - it still looks like we are in for a bit of a pullback,
but the number of indicators calling for a top declined today.
TOP / BOTTOM INDICATOR SCALE OF 1 TO 10 (Zero is a
neutral reading.)
Today’s Reading: -1
Most Recent Day with a value other than Zero: -1 on 18
December (Breadth vs S&P 500 is
calling for a top).
(1) +10 Max Bullish / -10 Max Bearish)
(2) -4 or below is a Sell sign. +4 or higher is a Buy
Sign.
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. While momentum isn’t stock performance per
se, momentum is closely related to stock performance. For example, over the
4-months from Oct thru mid-February 2016, the number 1 ranked Financials (XLF)
outperformed the S&P 500 by nearly 20%. In 2017 Technology (XLK) was ranked
in the top 3 Momentum Plays for 52% of all trading days in 2017 (if I counted
correctly.) XLK was up 35% on the year while the S&P 500 was up 18%.
*For additional background on the ETF ranking system see
NTSM Page at…
TODAY’S 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…
WEDNESDAY MARKET INTERNALS (NYSE DATA)
Market Internals
remained POSITIVE on the market.
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. In 2014, using these internals alone would
have made a 9% return vs. 13% for the S&P 500 (in on Positive, out on
Negative – no shorting).
Using the Short-term indicator in 2018 in SPY would have
made a 5% gain instead of a 6% loss for buy-and-hold. The methodology was Buy
on a POSITIVE indication and Sell on a NEGATIVE indication and stay out until
the next POSITIVE indication. The back-test included 13-buys and 13-sells, or a
trade every 2-weeks on average.
My current stock allocation is about 60% invested in
stocks as of 7 Oct 2019 (up from 50%). This is a conservative balanced position
appropriate for a retiree. You may wish to have a higher or lower % invested in
stocks depending on your risk tolerance.
INTERMEDIATE / LONG-TERM INDICATOR
Wednesday, the PRICE indicator was Bullish; VIX,
VOLUME and SENTIMENT Indicators were neutral. Overall, the Long-Term Indicator slipped
to HOLD.
