“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
“I don’t think that anything can save Donald Trump...He’s
decidedly on the path to irrelevance. He reduces himself by the day...This time
is different...Now Donald Trump is old, predictable, obviously petty.” - Carlos
Curbelo, Republican Congressman.
“It is better to be silent than to dispute with the
ignorant.” - Pythagoras
“Winter Storm Elliott? Blizzard? Bomb cyclone? What
happened to calling it 'weather'?” – USA Today.
(Panic sells.)
“On Monday,
the Jan. 6 committee made history by approving a criminal referral for former President Donald Trump...Section 3 of the 14th Amendment makes it clear that no
individual who engages in insurrection or rebellion against the Constitution
after having previously sworn an oath to support it can hold any federal or
state office...the standard of proof for a criminal conviction is so high, it’s
hard to imagine that courts and other decision-makers would not find sufficient
evidence for disqualification, for which the standard of proof is lower. In
fact, the committee’s determination that sufficient evidence existed to approve
the referral of criminal insurrection charges gives me a high degree of
confidence that the conditions for the disqualification clause have been met.” –
Noah Bookbinder, Executive director of Citizens for
Responsibility and Ethics in Washington.
(I doubt the disqualification clause has been met, but we’ll
see. It’s interesting though. Each state can decide whether to certify Trump to
be on their ballot. No matter what happens, it looks like the lawyers will be
busy.)
Political commentary at... https://michaelpramirez.com/index.html
CONSUMER CONFIDENCE (Conference Board)
“The Conference Board Consumer Confidence Index® increased
in December following back-to-back monthly declines. The Index now stands at
108.3 (1985=100), up sharply from 101.4 in November... “The Present Situation
and Expectations Indexes improved due to consumers’ more favorable view
regarding the economy and jobs. Inflation expectations retreated in December to
their lowest level since September 2021..” Press release at...
https://www.conference-board.org/topics/consumer-confidence
EXISTING HOME SALES (CNBC)
“Sales of existing homes fell 7.7% in November compared
with October, according to the National Association of Realtors. The seasonally
adjusted annualized pace was 4.09 million units. That is weaker than the 4.17
million units housing analysts had predicted, and it was a much deeper fall
than usual monthly declines.” Story at...
https://www.cnbc.com/2022/12/21/home-sales-tumbled-november.html
EIA CRUDE INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those
in the Strategic Petroleum Reserve) decreased by 5.9 million barrels from the
previous week. At 418.2 million barrels, U.S. crude oil inventories are about
7% below the five year average for this time of year.” Report at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 rose about 1.5% to 3878. (Of
course it did – I sold some stock yesterday.)
-VIX fell about 7% to 20.06,
-The yield on the 10-year Treasury slipped to 3.677%.
PULLBACK DATA:
-Drop from Top: 19.1% as of today. 25.4% max (on a
closing basis).
-Trading Days since Top: 244-days.
The S&P 500 is 3.6% BELOW its 200-dMA & at its
50-dMA.
*I won’t call the correction over until the S&P 500
makes a new-high; however, evidence suggests the bottom was in the 3600 area.
MY TRADING POSITIONS:
I am doing less trading now. You may do better watching
the momentum charts rather than my moves.
XLK – Technology ETF
TODAY’S COMMENT:
Yesterday I wrote, that since the S&P 500 broke below
its 50-dMA, it seemed likely that markets will fall at least another 5% (to the
October lows). So today, Wednesday, just to confuse the issue, the S&P 500
closed essentially at its 50-dMA. (0.03% above the 50-day, but who’s counting.)
That’s the key level. If the index can climb above its
50-dMA and stay there for consecutive closes, I might be enticed to up stock
holdings. On the other hand, a failure now would be bearish.
A couple of bearish signs:
-Breadth is again failing to confirm a rally at this
time. In fact, my comparison of the % of stocks advancing on the NYSE vs. the
S&P 500 switched back to “sell” today.
-My Money Trend indicator is headed down.
-Smart Money is drifting down.
RSI is no longer giving an oversold indication; that’s
neutral but it was bullish yesterday.
Today, the daily sum of 20 Indicators improved from +6 to
+9 (a positive number is bullish; negatives are bearish); the 10-day smoothed
sum that smooths the daily fluctuations improved from +74 to 76. (The trend
direction 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 20 indicators are short-term so they tend to bounce around
a lot.
LONG-TERM INDICATOR: The Long Term NTSM indicator
remained HOLD: SENTIMENT is neutral; VIX & PRICE are bullish; VOLUME is
negative.
Bottom line: I’m a reluctant Bear at this point. I think
there is a rally coming in the near term, but my indicators were bearish last
Friday. As a result, I am defensively positioned in the markets, but not
drastically so.
I’m now have about 40% of the portfolio invested in
stocks. (As a retiree, 50% invested in stocks is my “normal” portfolio.)
BEST ETFs - 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
BEST DOW STOCKS - TODAY’S MOMENTUM
RANKING OF THE DOW 30 STOCKS (Ranked Daily)
DOW 30 momentum ranking
follows:
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
WEDNESDAY MARKET INTERNALS
(NYSE DATA)
My basket of Market Internals remained 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 most useful when they diverge from
the Index.)
...My current invested
position is about 40% stocks, including stock mutual funds and ETFs. I’m
usually about 50% invested in stocks. Last week’s indicator some was bad enough
to convince me to take a more conservative view of the markets.
I trade about 15-20% of the
total portfolio using the momentum-based analysis I provide here. If I can see
a definitive bottom, I’ll add a lot more stocks to the portfolio using an
S&P 500 ETF.
