Jobless Claims ... EIA Crude Inventories ... Santa Clause Rally ... Best DOW Stocks ... Best ETFs … Stock Market Analysis ...

 
“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
JOBLESS CLAIMS (CNN)
“First-time claims for weekly unemployment benefits increased to 225,000 for the week ended December 24, according to Labor Department data released Thursday. That’s up 9,000 from the previous week’s tally of 216,000.” Story at...
https://www.cnn.com/2022/12/29/economy/initial-jobless-claims-december/index.html
 
EIA CRUDE INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 0.7 million barrels from the previous week. At 419.0 million barrels, U.S. crude oil inventories are about 6% below the five year average for this time of year.”  Story at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf
 
SANTA CLAUS RALLY (Heritage Capital)
“Regardless of what the pundits and media say, the true Santa Claus Rally (SCR) as observed and researched by Yale Hirsch of Stock Traders Almanac fame began at the close on December 22nd and lasts through the close on January 4th. In other words, the trend is the last five trading days of the year and first two of the new year. That’s not debatable. Whether Santa arrives or not is up for debate.” Commentary at... 
https://investfortomorrow.com/insights/
 
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 rose about 1.8% to 3849.
-VIX dipped about 3% to 21.49
-The yield on the 10-year Treasury dipped to 3.819%.
 
PULLBACK DATA:
-Drop from Top: 19.7% as of today. 25.4% max (on a closing basis).
-Trading Days since Top: 249-days.
The S&P 500 is 4% BELOW its 200-dMA & 1.2% BELOW 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. (I’ve been waiting for tech to take off.  Not sure we’re there yet but today’s move higher was nice to see.)
 
TODAY’S COMMENT:
Today, 90% of the volume was up-volume.  That’s always a positive sign, but it is not super bullish since the S&P 500 didn’t close in the top 10% of its range. Both have to happen for a more bullish sign. The last 90% down-volume day was 5 December and today’s reversal (even if it had met both tests) doesn’t really count as a reversal since the 90% down volume day was several weeks ago.
 
The 50-dMA remains an important point for the markets.  If the S&P 500 can climb above its 50-day and remain there for consecutive closes, I’ll be a stock buyer again.
 
Without a move above the 50-day, a retest of the October low seems likely.  I am not convinced that we’ll see a recession – even for economists, a recession call is mostly guesswork. I remember back at the beginning of the Great Recession Bernanke said he didn’t foresee a recession; we now know (per the NBER) that the recession had already started.
 
Today, the daily sum of 20 Indicators increased from -1 to +2 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations declined from +33 to 29. (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: PRICE & SENTIMENT are neutral; VIX is bullish; VOLUME is negative. 
 
Bottom line: I’m a Bear at this point. I am defensively positioned in the markets, but not drastically so. Apple is now at a market multiple, according to the CNBC Fast Money traders on Wednesday. That makes me wonder whether we are getting near an end to the tech selloff. If so, the October bottom may not be too far off the final bottom. We’ll see. 
 
Since the Index has broken below its 50-dMA, a retest of the October lows (about 5% below today’s close) seems likely. 
 
I’m now have about 40% of the portfolio invested in stocks. (As a retiree, 50% invested in stocks is my “normal” portfolio.) I was 75% invested in stocks in early December.
 
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
 
THURSDAY MARKET INTERNALS (NYSE DATA)

My basket of Market Internals improved 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 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 Friday-run-down indicator ensemble 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.