“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
HOUSING STARTS / BUILDING PERMITS (CNBC)
“U.S. homebuilding surged to an eight-month high in
November amid an acute shortage of properties on the market, though higher
prices for raw materials and labor shortages remain a constraint... Housing
starts increased 11.8%...Permits for future homebuilding increased 3.6% to a
rate of 1.712 million units in November.” Story at...
https://www.cnbc.com/2021/12/16/us-housing-starts-building-permits-increase-in-november.html
JOBLESS CLAIMS (foxbusiness)
“Weekly jobless claims ticked higher by 206,000 from the
previous week’s revised tally of 188,000, rising above the pandemic low as
the economic recovery remains uneven.” Story at...
https://www.foxbusiness.com/economy/initial-jobless-claims-december-11
PHILADELPHIA FED INDEX (Nasdaq.com)
“Philadelphia-area manufacturing activity grew at a
substantially slower rate in the month of December, the Federal Reserve Bank of
Philadelphia revealed in a report on Friday...the Philly Fed Index fell to its
lowest level since hitting 11.1 in December 2020.” Story at...
https://www.nasdaq.com/articles/philly-fed-index-tumbles-to-lowest-level-in-a-year
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website as
of 6:30 PM Thursday. U.S. total case numbers are on the left axis; daily
numbers are on the right side of the graph in Red with the 10-dMA of daily
numbers in Green. I added the smoothed 10-dMA of new cases (in purple) to the
chart.
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 fell about 0.9% to 4669.
-VIX rose about 7% to 19.29.
-The yield on the 10-year Treasury was 1.422%.
After yesterday’s Fed driven relief rally, today’s
weakness was not expected and the lack of follow-thru was disappointing. There
was another Hindenburg Omen today as both new-highs and new-lows were elevated. Market internals weren’t consistent: Only 46%
of issues on the NYSE advanced today, a bear-sign; up-volume and down-volume were
close to evenly split (neutral) and new-highs outpaced new-lows, a bull sign.
Still, there really were too many new-lows for comfort.
The Index has visited the 4700 level 8 times since 5
November and has not managed to break decisively above it. That is a worrying sign, too.
We’ve now had 4 consecutive days with the % of issues
advancing over the last 50-days below 50%. That usually occurs in a correction,
not during a healthy bull market. It is also shocking to see the tech selloff
today. When they shoot the leaders, the
bull market is over. Is this the end? We don’t know, but overall, indicators
are essentially neutral.
The daily sum of 20 Indicators declined from +2 to -1 (a
positive number is bullish; negatives are bearish); the 10-day smoothed sum
that smooths the daily fluctuations improved from -45 to -31 (The trend is more
important than the actual number for the 10-day value.) These numbers sometimes
change after I post the blog based on data that comes in late. Most of these
indicators are short-term so they tend to bounce around a lot.
My basket of internals indicator is neutral.
The Long Term NTSM indicator
ensemble remained HOLD. VIX remained bearish; Volume, Price & Sentiment are
Neutral.
Bottom line, I don’t see enough clear, actionable signs, yet, but
that could change quickly. We may need to see the S&P 500 test its 50-dMA
about 1.5% below today’s close.
I am a cautious bull, but let’s
see what happens tomorrow when we review the Friday run-down of indicators. It
may be time to take more off the table.
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.
*For additional background on
the ETF ranking system see NTSM Page at…
http://navigatethestockmarket.blogspot.com/p/exchange-traded-funds-etf-ranking.html
TODAY’S RANKING OF THE DOW 30
STOCKS (Ranked Daily)
Here’s the revised DOW 30 and
its momentum analysis. 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
THURSDAY MARKET INTERNALS
(NYSE DATA)
Market Internals dipped to HOLD.
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.
My stock-allocation in the
portfolio is now about 50% invested in stocks; this is my “normal” fully
invested stock-allocation of 50%.
You may wish to have a higher
or lower % invested in stocks depending on your risk tolerance. 50% is a
conservative position that I consider fully invested for most retirees.
As a general rule, some
suggest that the % of portfolio invested in the stock market should be one’s
age subtracted from 100. So, a
30-year-old person would have 70% of the portfolio in stocks, stock mutual
funds and/or stock ETFs. That’s ok, but
for older investors, I usually don’t recommend keeping less than 50% invested
in stocks (as a fully invested position) since most people need some growth in
the portfolio to keep up with inflation.
