EIA CRUDE OIL INVENTORIES (OilPrice.com)
“Crude oil prices rose higher after the Energy
Information Administration reported an inventory draw of 5.5 million barrels for the
week to December 20 in its last weekly petroleum status report for 2019. At
441.4 million barrels, inventories were some 2 percent above the seasonal
average, the EIA said.” Story at…
WHY NO POLITICIAN GETS MY RESPECT (Mishtalk)
“In 2016, Trump promised to totally wipe out $19 trillion
in national debt over eight years in office. Republicans cheered. Today,
hypocrite republicans cheer a trillion-dollar deficit and a national debt
projected to rise by about $9 trillion.” Commentary at…
My cmt: Remember when all those Republicans were running
against Obama spending? Of course, the Democrats are just as bad. They spent a year railing against Trump’s
immigration cages ignoring the fact that Obama actually built them. Trump was
forced to put even more illegal immigrants in cages (actually chain-link
holding cells) as illegal immigration ramped up. The Trump administration begged for more
money to solve the problem, but the Democrats would rather see immigrants die
than give Trump a victory. The Democrats finally funded the need a few months
back, years after the need was identified. Our Federal Politicians are truly
worthless.
MARKET REPORT / ANALYSIS
-Friday the S&P 500 was essentially unchanged at
3240.
-VIX rose about 6% to 13.43.
-The yield on the 10-year Treasury slipped to 1.878.
There are now 2 topping-indicators calling a top, down
from 3 yesterday. The top indicators are: RSI was overbought; and the S&P
500 is too far above its 200-dMA when sentiment is considered. It’s 9.3%
above tits 200-dMA without considering sentiment and that is a high number
too. The indicator that improved was the Breadth vs. S&P 500. It measures
divergence between advancing stocks on the NYSE and the S&P 500 index.
While the Breadth vs. the S&P 500 indicator has improved,
the signal is out there. In the past, the
divergence has sometimes cleared up, only to have the S&P 500 top out
3-weeks later, so it is too early to be optimistic about the possibility for a
pullback.
My daily sum of 20 Indicators remained -1 (a
positive number is bullish; negatives are bearish) while the 10-day smoothed
sum that negates the daily fluctuations declined from +27 to +26 (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. This isn’t a strong
signal since the number has been drifting around zero.
I remain bullish in the long-term; short-term - it’s STILL
the broken record report - it still looks like we are in for a bit of a
pullback.
Any pullback should be small: Breadth remains good; the Fosback
New-High/New-Low Logic Index is much closer to a buy than a sell.
TOP / BOTTOM INDICATOR SCALE OF 1 TO 10 (Zero is a
neutral reading.)
Today’s Reading: -2
Most Recent Day with a value other than Zero: -2 on 27
December (RSI was overbought; and the S&P 500 is too far above its 200-dMA
when sentiment is considered).
(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.
FRIDAY MARKET INTERNALS (NYSE DATA)
Market Internals remained
NEUTRAL on the market, but this may be due to the overall low volume. With
overall volume down, up-volume is reduced and that’s the internal that slipped
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 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
Friday, the PRICE indicator was Bullish; VIX, VOLUME
and SENTIMENT Indicators were neutral. Overall, the Long-Term Indicator slipped
to HOLD. At present, I expect a small pullback so we are looking for a
better buying opportunity.
