FOMC RATE DECISION (MarketWatch)
THE ESTABLISHMENT FEARS YOU, NOT POLITICIANS (CaitlanJohnson.com)
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 more details, see NTSM Page at…
“The Federal Reserve held its benchmark fed funds
interest rate steady on Wednesday, as the economy stayed on a moderate growth
path. The central bank’s description of the economy was unchanged from six
weeks ago: the labor market remained strong, growth was helped by consumer
spending, and inflation remained below the 2% target…Fed officials have said it
would take a “material” change in the outlook for the Fed to ease monetary
policy further.” Story at…
EIA CRUDE INVENTORIES (OilPrice.com)
“Crude oil headed lower today, reversing a rally after
the Energy Information Administration reported a
build in oil inventories of 3.5 million barrels for the week to January 24.”
Story at...
https://morningporridge.com/the-morning-porridge/f/blains-morning-porridge---29-jan-2020-virus-economic-plague
VIRUS = ECONOMIC PLAGUE (Blaine’s Morning Porridge)
"It’s clear any business connected with China is going to
suffer some form of Q1 hit from the impact in China. We still don’t know how
much more economic damage may be inflicted from policy responses to the virus.
Firms like Honda are shuttering China factories. Plans to evacuate
foreign nationals from China are being put in place – will they all be put in
quarantine? Don’t discount CoronaVirus. It is not over yet.” - Bill
Blain, Strategist at Shard Capital, London. Commentary at…https://morningporridge.com/the-morning-porridge/f/blains-morning-porridge---29-jan-2020-virus-economic-plague
THE ESTABLISHMENT FEARS YOU, NOT POLITICIANS (CaitlanJohnson.com)
“…the Bush administration didn’t truly
end. All of its imperialist, power-serving agendas remained in place and were
expanded under the apparent oversight of the following administration. The same
thing happened after the Obama administration, and the same thing–whether in
2021 or 2025–will happen after the Trump administration. The disturbing fact of
the matter is that if you ignore election dates and just look at the numbers
and raw data of US government behavior over the years, you can’t really tell
who is president or which political party is in power at any given point in
time.” - Caitlin Johnstone, Rogue Journalist. Commentary at…
My cmt: Thought provoking. Read at your own risk.
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 dipped about 0.1% to 3273.
-VIX dropped about 11% to 16.39.
-The yield on the 10-year Treasury slipped to 1.583.
The high for the day was a few minutes after 2PM when the
FOMC rate decision was released.
Afterward, the Index fell for the rest of the afternoon (with a few
failed rallies along the way) and finished nearly 20 points off the high. That’s
a bearish close! Smart Money (based on late-day-action) was falling all thru
December signaling that the Pros were selling. This metric began improving in
January, but peaked last week. The Pros are leaning slightly bearish at this
point.
Overall, indicators are not optimistic. The daily sum of 20
Indicators was unchanged at -12 (a positive number is bullish; negatives
are bearish). The 10-day smoothed sum that negates the daily fluctuations dropped
from +7 to -11. (These numbers sometimes change after I post the blog based on
data that comes in late.) Most of these indicators are short-term.
Down still seems most likely for the short-term.
Major support levels are:
-50-dMA, now at 3206
-100-dMA, now at 3105
-200-dMA, now at 3008
It is very unlikely that any retreat would be lower than
the 200-dMA.
I took some money off the table by cutting stock
allocations Monday. Going forward, we will be trying to identify a buying
opportunity…assuming a dip evolves. If I am right, that could be a few weeks
out. If not, I’ll have to sit out for a while – the S&P 500 is already
stretched, so it will be hard to get back in unless we see some solid buy-signals.
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 29
January (The S&P 500 was 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)
*For additional background on the ETF ranking system see
NTSM Page at…
TODAY’S RANKING OF THE DOW 30 STOCKS (Ranked Daily)
- I cut my Apple (AAPL) position in half Monday, but I
still own a large position in AAPL.
- I cut my XLK position in half Monday, but I still own a
large position in XLK.
The top ranked stock receives 100%. The rest are then
ranked based on their momentum relative to the leading stock.
WEDNESDAY MARKET INTERNALS (NYSE DATA)
Market Internals
remained NEGATIVE / BEARISH 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 45% invested in
stocks as of 27 January (down from 60%). This is a conservative 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 VIX indicator was bearish; PRICE,
VOLUME and SENTIMENT Indicators were neutral. Overall, the Long-Term Indicator
remained HOLD.
