FOMC Minutes ... ISM Manufacturing ... JOLTS Job Openings ... Best DOW Stocks ... Best ETFs … Stock Market Analysis ...
“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
“Base case until proven otherwise is ongoing bear.” –
Chris Ciovacco, Ciovacco Capital.
FOMC MINUTES (CNBC)
“Participants generally observed that a restrictive
policy stance would need to be maintained until the incoming data provided
confidence that inflation was on a sustained downward path to 2 percent, which
was likely to take some time,” the meeting summary stated. “In view of the persistent
and unacceptably high level of inflation, several participants commented that
historical experience cautioned against prematurely loosening monetary policy.”
Story at...
https://www.cnbc.com/2023/01/04/fed-minutes-december-2022-.html
ISM MANUFACTURING INDEX (ISM via prnewswire)
"The December Manufacturing PMI® registered
48.4 percent, 0.6 percentage point lower than the 49 percent recorded in
November. Regarding the overall economy, this figure indicates contraction
after 30 straight months of expansion. The Manufacturing PMI® figure is the
lowest since May 2020, when it registered 43.5
percent.” Press release at...
https://www.prnewswire.com/news-releases/manufacturing-pmi-at-48-4-december-2022-manufacturing-ism-report-on-business-301712602.html
JOLTS JOB OPENINGS (CNN)
“The number of available jobs in the United States
totaled 10.46 million in November, according to data released Wednesday by the
Department of Labor... There were still about 1.7 job openings for each job
seeker in November, unchanged from October, according to data from the Bureau
of Labor Statistics.. Although openings came in above expectations, the JOLTS
report likely won’t spur a dramatic change in course from the Fed...” Story
at...
https://www.cnn.com/2023/01/04/economy/jolts-november-job-openings-and-quits/index.html
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 rose about 0.8% to 3853.
-VIX dipped about 4% to 22.01
-The yield on the 10-year Treasury slipped to 3.687%.
PULLBACK DATA:
-Drop from Top: 19.7% as of today. 25.4% max (on a
closing basis).
-Trading Days since Top: 252-days.
The S&P 500 is 3.7% BELOW its 200-dMA & 1.3%
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. (The S&P 500 is not far from
its prior lows so I am holding this position, even though it is now a losing
one.)
TODAY’S COMMENT:
New highs outpaced new-lows again today. That’s a good sign that hadn’t happened until
yesterday.
Indicators are getting more bullish, but the S&P 500
remains below its 50-dMA. I still think that the most likely scenario will see
the S&P 500 test its October lows, about 6% below today’s close.
The 50-dMA is the key for me; if the S&P 500 can
climb above its 50-dMA and remain for consecutive days, I’ll be adding to stock
holdings.
Today, the daily sum of 20 Indicators improved from +11
to +12 (a positive number is bullish; negatives are bearish); the 10-day
smoothed sum that smooths the daily fluctuations increased from +45 to 54. (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: VIX, VOLUME, PRICE & SENTIMENT are all neutral.
Bottom line: I’m a Bear at this point. I am defensively
positioned in the markets, but not drastically so. There was a successful test
and buy signal 27 September, so I need to be careful not to get too bearish.
Perhaps cautious is a better word than bearish.
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
WEDNESDAY MARKET INTERNALS
(NYSE DATA)
My basket of Market Internals remained BUY. (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.
