FED Rate Decision ... Crude Inventories ... Best DOW Stocks ... Best ETFs … Stock Market Analysis ...

 
“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
FOMC RATE DECISION (YahooFinance)
“The Federal Reserve raised short-term interest rates Wednesday by a half percentage point, slowing down its pace of rate hikes from this summer's torrid clip. The rate hike brings the Fed’s benchmark policy rate, the federal funds rate, to a new range of 4.25%-4.5%, the highest level since December 2007..."The Committee anticipates that ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time," the Fed's statement said.” Story at...
https://finance.yahoo.com/news/federal-reserve-meeting-interest-rate-announcement-december-14-180643459.html
 
EIA CRUDE INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 10.2 million barrels from the previous week. At 424.1 million barrels, U.S. crude oil inventories are about 6% below the five year average for this time of year.
https://ir.eia.gov/wpsr/wpsrsummary.pdf
My cmt: Lower inventories usually means higher prices.
 
IS SOCIAL MEDIA CENSORSHIP A CRIME? - EXCERPT (WSJ)
“Cooperation between government officials and private parties to suppress speech could be considered a criminal conspiracy to violate civil rights...Section 241 of Title 18 of the U.S. Code provides: “If two or more persons conspire to injure, oppress, threaten, or intimidate any person . . . in the free exercise or enjoyment of any right or privilege secured to him by the Constitution or laws of the United States, or because of his having so exercised the same...they shall be fined under this title or imprisoned not more than ten years, or both... Because the First Amendment doesn’t bar private parties from independently suppressing speech, Section 241 would apply to tech censorship only if government officers, acting as part of a conspiracy, have violated the Constitution.” Opinion at...
https://www.wsj.com/articles/is-social-media-censorship-a-crime-section-241-us-code-government-private-conspiracy-civil-rights-speech-11670934266
My cmt: The above is why Twitter meetings with Homeland Security, the FBI, et al., are troubling.
 
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 dipped about 0.6% to 3995.
-VIX bucked the trend and fell about 6% to 21.14.
-The yield on the 10-year Treasury dropped to 3.479%.
 
PULLBACK DATA:
-Drop from Top: 16.7% as of today. 25.4% max (on a closing basis).
-Trading Days since Top: 239-days.
The S&P 500 is 0.9% BELOW its 200-dMA & 3.5% ABOVE 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 and I am fully invested with a higher percentage of stocks than normal.
 
MY TRADING POSITIONS:
I am doing less trading now. You may do better watching the momentum charts rather than my moves.
 
XLI – Industrial ETF (XLI still looks good to me. Nearly 10% of XLI is in Boeing and Caterpillar and they are both strong performers in the DOW momentum analysis.) 
QLD – 2x Nas 100
DDM – 2x Dow 30.
XLK – Technology ETF
 
CVX – (I may hold this as a long-term position. I already owned a small position in CVX.)
 
TODAY’S COMMENT:

Today’s 50 basis point rate hike by the Fed was the most well telegraphed rate hike in history. The market reaction at 2pm was baffling at first, but the commentary was more hawkish than expected, or at least more hawkish than hoped for.
 
Today, (Wednesday) unchanged volume was again high, but actually very high. As I’ve often said, many believe that this indicator suggests investor confusion at market turning points. My problem is that it is frequently a false signal. Not much has happened the last 4 times we’ve seen this indicator. The S&P 500 is near its lower trendline and has gone sideways for more than a month; I’ll say this is a bullish sign. I suspect the argument could be made that it is bearish rather than bullish – but I’ll take the bullish side.
 
The Bollinger Squeeze last week predicted a big move in the markets – so far, we haven’t seen it.
 
Today, the daily sum of 20 Indicators fell from +18 to +16 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations declined from +134 to 128. (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 BUY: SENTIMENT & VOLUME are neutral; VIX, & PRICE are bullish.  (The important Buy signal from this indicator ensemble was 21 October (7 days after the low); my first buy indication was on 27 September (2% above the low) based on analysis of retests of the June low.)
 
Bottom line: I remain a Bull. I’ll take profits in the leveraged positions if there is weakness.
 
As previously noted, I think the bottom was 3577 on 12 October. There is always the possibility that the markets could retest those lows, but it seems unlikely that a retest will occur in 2022.
 
I’m now invested with about 75% of the portfolio invested in stocks. (As a retiree, 50% invested in stocks is my “normal” portfolio.) 75% stocks is uber-bullish and that’s as far as I’ll go.
 
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 fell from BUY to SELL. It’s unusual to see that sort of reversal in one day.
(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 75% stocks, including stock mutual funds and ETFs. I’m usually about 50% invested in stocks. I’ll cut back on stocks if we see serious bear signs.
 
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.