“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
“Technical analysis tracks the past; it does not predict
the future. You have to use your own
intelligence to draw conclusions about what the past activity of some traders
may say about the future activity of other traders.” – Chris Ciovacco, Ciovacco
Capital Management.
Chevron Net profit Margin: 14%
Dominion Energy (regulated utility) Profit Margin: 18%
Microsoft Net Profit Margin: 31%
Tell me again...who is screwing the public?
S&P 500 EARNINGS SEASON UPDATE: FEBRUARY 3, 2023 –
EXCERPT (FactSet)
“Overall, 50% of the companies in the S&P 500 have reported actual results for Q4 2022 to date...The blended (combines actual results for companies that have reported and estimated results for companies that have yet to report) earnings decline for the fourth quarter is -5.3%...If -5.3% is the actual decline for the quarter, it will mark the first time the index has reported a year-over-year decrease in earnings since Q3 2020 (-5.7%). Four of the eleven sectors are reporting year-over-year earnings growth, led by the Energy and Industrials sectors. On the other hand, seven sectors are reporting a year-over-year decline in earnings, led by the Communication Services, Materials, and Consumer Discretionary sectors.
https://insight.factset.com/sp-500-earnings-season-update-february-3-2023
BofA’s HARTNETT WARNS INVESTORS (BNN Bloomberg)
“The US stock rally has already gone too far, and investors face brutal declines if economic growth crumbles in the second half of the year, Bank of America Corp. strategists say. The “most painful trade” is always the “apocalypse postponed,” a team led by Michael Hartnett wrote in a note. The risk is that inflation flares up again over the next few months, and that the US economy faces a deeper recession in the second half of 2023 after staying resilient in the first six months of the year, they said.” Story at...
https://www.bnnbloomberg.ca/bofa-s-hartnett-warns-investors-risk-sleepwalking-into-selloff-1.1878870
Always good to read articles on the other side, even if I don’t agree; however, sideways for a while or even down 3-5% is possible, especially if RSI & Bollinger Bands get too carried away.
DO THE CHARTS FAVOR THE BULLS OR THE BEARS? - Excerpt
(Ciovacco Capital)
“The Discretionary vs Staples $XLY vs. $XLP ratio bottomed in late December. It has been on a very rare 24-day trading run last seen in 2009 and 2020....So once again, it doesn’t look like a bear market anymore; doesn’t look like a major correction anymore; it looks more like, after the low.” – Chris Ciovacco, Ciovacco Capital Management. Detailed PowerPoint video and analysis at...
https://www.youtube.com/watch?v=y-k55AMmnAM
This is just one chart. There are dozens in the presentation.
MARKET REPORT / ANALYSIS
-Monday the S&P 500 dropped about 0.6% to 4111.
-VIX rose about 6% to 19.43.
-The yield on the 10-year Treasury rose to 3.645%.
PULLBACK DATA:
-Drop from Top: 14.3% as of today. 25.4% max (on a closing basis).
-Trading Days since Top: 274-days.
The S&P 500 is 4.1% ABOVE its 200-dMA & 3.8% 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.
MY TRADING POSITIONS:
QLD – (2xNas 100) The XLK bottomed 12 October, about the same time as when the S&P 500 retested its low. QLD seems like a decent bet even though the CNBC crowd doesn’t like Tech.
XLK – Technology ETF.
SSO – 2x S&P 500.
XLE – Energy Sector ETF. Low PE; good Dividend; decent momentum, although momentum has been slipping recently.
BA – (Boeing) I am late on this one, but we’ll see.
XLY - Consumer Discretionary ETF. (I considered selling XLY. But it has been a good performer recently, so I’ll continue to watch it.)
SHY – Short term bonds. 30-day yield is 4.2%. (Trailing 1-year yield is 1.3%.) I’ll hold this, but if the market retests the lows, I’ll sell it and buy stocks.)
TODAY’S COMMENT:
Today, (Monday) unchanged volume was 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. The S&P 500 is in between its trendlines so I don’t know whether this is bullish or bearish. Let’s just say investors may be confused, but I doubt that this is a major turning point. I suspect we are trending back to the lower trend line, about a 3-5% decline from recent highs.
Today, the daily spread of 20 Indicators (Bulls minus
Bears) slipped from +12 to +7 (a positive number is bullish; negatives are
bearish); the 10-day smoothed sum that smooths the daily fluctuations improved
from +66 to 67. (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: PRICE & VOLUME are positive. VIX & SENTIMENT are neutral.
(The important BUY in this indicator was on 21 October, 7-days after the bottom. For my NTSM overall signal, I suggested that a short-term buying opportunity occurred on 27 September (based on improved market internals on the retest), although without market follow-thru, I was unwilling to call a buy; however, I did close shorts and increased stock holdings. I issued a Buy-Signal on 4 October, 6-trading days before the final bottom, based on stronger market action that confirmed the market internals signal.)
Bottom line: I’m a BULL.
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
MONDAY 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 75% stocks, including stock mutual funds and ETFs. I’m
usually about 50% invested in stocks.
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.
Tell me again...who is screwing the public?
S&P 500 EARNINGS SEASON UPDATE: FEBRUARY 3, 2023 –
EXCERPT (FactSet)“Overall, 50% of the companies in the S&P 500 have reported actual results for Q4 2022 to date...The blended (combines actual results for companies that have reported and estimated results for companies that have yet to report) earnings decline for the fourth quarter is -5.3%...If -5.3% is the actual decline for the quarter, it will mark the first time the index has reported a year-over-year decrease in earnings since Q3 2020 (-5.7%). Four of the eleven sectors are reporting year-over-year earnings growth, led by the Energy and Industrials sectors. On the other hand, seven sectors are reporting a year-over-year decline in earnings, led by the Communication Services, Materials, and Consumer Discretionary sectors.
https://insight.factset.com/sp-500-earnings-season-update-february-3-2023
“The US stock rally has already gone too far, and investors face brutal declines if economic growth crumbles in the second half of the year, Bank of America Corp. strategists say. The “most painful trade” is always the “apocalypse postponed,” a team led by Michael Hartnett wrote in a note. The risk is that inflation flares up again over the next few months, and that the US economy faces a deeper recession in the second half of 2023 after staying resilient in the first six months of the year, they said.” Story at...
https://www.bnnbloomberg.ca/bofa-s-hartnett-warns-investors-risk-sleepwalking-into-selloff-1.1878870
Always good to read articles on the other side, even if I don’t agree; however, sideways for a while or even down 3-5% is possible, especially if RSI & Bollinger Bands get too carried away.
“The Discretionary vs Staples $XLY vs. $XLP ratio bottomed in late December. It has been on a very rare 24-day trading run last seen in 2009 and 2020....So once again, it doesn’t look like a bear market anymore; doesn’t look like a major correction anymore; it looks more like, after the low.” – Chris Ciovacco, Ciovacco Capital Management. Detailed PowerPoint video and analysis at...
https://www.youtube.com/watch?v=y-k55AMmnAM
This is just one chart. There are dozens in the presentation.
-Monday the S&P 500 dropped about 0.6% to 4111.
-VIX rose about 6% to 19.43.
-The yield on the 10-year Treasury rose to 3.645%.
-Drop from Top: 14.3% as of today. 25.4% max (on a closing basis).
-Trading Days since Top: 274-days.
The S&P 500 is 4.1% ABOVE its 200-dMA & 3.8% 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.
QLD – (2xNas 100) The XLK bottomed 12 October, about the same time as when the S&P 500 retested its low. QLD seems like a decent bet even though the CNBC crowd doesn’t like Tech.
XLK – Technology ETF.
SSO – 2x S&P 500.
XLE – Energy Sector ETF. Low PE; good Dividend; decent momentum, although momentum has been slipping recently.
BA – (Boeing) I am late on this one, but we’ll see.
XLY - Consumer Discretionary ETF. (I considered selling XLY. But it has been a good performer recently, so I’ll continue to watch it.)
SHY – Short term bonds. 30-day yield is 4.2%. (Trailing 1-year yield is 1.3%.) I’ll hold this, but if the market retests the lows, I’ll sell it and buy stocks.)
Today, (Monday) unchanged volume was 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. The S&P 500 is in between its trendlines so I don’t know whether this is bullish or bearish. Let’s just say investors may be confused, but I doubt that this is a major turning point. I suspect we are trending back to the lower trend line, about a 3-5% decline from recent highs.
(The important BUY in this indicator was on 21 October, 7-days after the bottom. For my NTSM overall signal, I suggested that a short-term buying opportunity occurred on 27 September (based on improved market internals on the retest), although without market follow-thru, I was unwilling to call a buy; however, I did close shorts and increased stock holdings. I issued a Buy-Signal on 4 October, 6-trading days before the final bottom, based on stronger market action that confirmed the market internals signal.)
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
MONDAY MARKET INTERNALS (NYSE DATA)
