NAVIGATE THE STOCK MARKET FOCUSES ON:
(1) Daily momentum analysis of the DOW 30 stocks and 15 ETFs across various market sectors.
(2) Stock Market commentary and analysis.
(3) Buy/Sell signals for major market turns.
(((The blog is for information only. You assume all risk of its use; we don’t warrant the accuracy of our content. You must do your own due diligence.)))
“Bad medicine” – Michael Ramirez, political commentary
at... https://michaelpramirez.com/index.html “Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire. “Far
more money has been lost by investors in preparing for corrections, or anticipating
corrections, than has been lost in the corrections themselves.” -
Peter Lynch, former manager of Fidelity’s Magellan® fund. “Ms. Noonan [“Trump and the Collapse of the Old Order”] has expressed
concern about the chaos of a second Trump term. But for those who have spent
time in the tech industry, the disruption looks familiar and doesn’t cause
unease. An old saying among entrepreneurs is to “move fast and break things,”
and that’s exactly what Mr. Trump and his team are doing... Some things will
break, but there will be broad consensus around what should be fixed.
Meanwhile, we’ll discover that a lot of the time and money the government has
been spending can be discontinued without any great loss. - John Foster, WSJ
Letters at... https://www.wsj.com/opinion/the-collapse-of-the-old-order-predated-trump-biden-obama-whtite-house-d59b802a?mod=letterstoeditor_article_pos7 "If a judge tried to tell a general how to conduct a
military operation, that would be illegal. If a judge tried to command the
attorney general in how to use her discretion as a prosecutor, that’s also
illegal. Judges aren’t allowed to control the executive’s legitimate
power." JD Vance, VP. My cmt: Mr. Vance better read the Constitution. WHAT TO DO ABOUT THE STOCK MARKET’S GIANT PROBLEM (WSJ) “More than half the S&P 500’s 25% total return last
year came from only a few companies, the so-called Magnificent
Seven: Alphabet, Amazon.com, Apple, Meta Platforms, Microsoft, Nvidia and Tesla. Nvidia alone,
with its 171.2% return, produced more than one-fifth of the entire market’s
gain in 2024. But such dominance by a handful of companies isn’t unusual...
...What investors should worry about, though, is
overvaluation. The S&P 500 is trading at about 22 times what analysts
expect its constituent companies to earn over the next 12 months. That’s far
above its average, since 1990, of 16.4 times expected earnings, according to
Strategas Research Partners... putting most of your money in stocks when you’re
young makes sense... If you’re in or near retirement, though, you no longer
have decades of paychecks in front of you, and your human capital has lost its
power as a hedge. Treasury inflation-protected securities, or TIPS,
are an
ideal way to cushion your wealth against the risk of a stock-market
decline and the corrosive effects of inflation. I’ve bought them, and I think
you should, too—now more than ever.” Jason Zweig, WSJ column at... https://www.wsj.com/finance/investing/what-you-should-do-about-the-stock-markets-giant-problem-f4ca338e My cmt: That’s one way to do it. I’d prefer to invest
more heavily in stocks with the expectation that my indicators will warn of
stock downturns in advance. The caveat (and risk) is that a sudden black-swan
event might cause a big drop in stocks with little or no warning. MARKET REPORT / ANALYSIS AS OF 1PM FRIDAY -Monday the S&P 500 rose about 0.7% to 6066. -VIX declined about 4% to 15.81. -The yield on the 10-year Treasury rose (compared to
about this time, prior trading day) to 4.501%. MY TRADING POSITIONS: XLK – Holding since the October 2022
lows. Added more 9/20/2024.
QLD – added 12/20/2024. (IRA acct.) NVDA – added 1/6/2025. The decline in Nvidia appears to be overblown. Regarding
competition to Nvidia, Dan Ives (Managing Director and Senior Equity Research
Analyst covering the Technology sector at Wedbush Securities) says, “The
threat is minimal.” He recommended buying Nvidia. I will hold NVDA and see what
develops... CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS: Today, of the 50-Indicators I track, 10 gave Bear-signs
and 10 were Bullish. The rest are neutral. (It is normal to have a lot of
neutral indicators since many of the indicators are top or bottom indicators
that will signal only at extremes.)
TODAY’S COMMENT The McClellan Oscillator turned positive today and that
cancels the Hindenburg Omen we saw Friday. Once again, we saw more high, unchanged-volume. As I’ve
often said, many believe that this indicator suggests a market turning point
because investors are confused. Are markets turning back down? Perhaps, but the
best we can say is that investors are confused. “High-unchanged-volume” is not
one of my indicators because it is often wrong. The daily, bull-bear spread of 50-indicators improved to
a Neutral zero (Bear indicators equal to Bull indicators). The
10-dMA of the spread is still falling, a bearish sign. We note that Breadth indicators remained weak again today.
On both a ten- and fifty-day basis, the percentage of issues advancing on the
NYSE is below 50% - most issues have been going down over those time
frames.Breadth is probably the single
most important indicator and we’ll need to watch indicators closely. If indicators continue to fall, I’ll reduce stock
holdings further. For now, I am on hold. BOTTOM LINE I am Neutral – 60% in stocks. ETF - MOMENTUM ANALYSIS: TODAY’S RANKING OF 15 ETFs (Ranked Daily) ETF ranking
follows:
My basket of Market Internals remained SELL. (My basket of Market
Internals is a decent trend-following analysis that is most useful when it
diverges from the Index.)
...My current invested
position is about 60% stocks, including stock mutual funds and ETFs. 50%
invested in stocks is a normal position. (75% is my max stock allocation when I
am confident that markets will continue higher; 30% in stocks is my Bear market
position.) I trade about 15-20% of the total portfolio using the
momentum-based analysis I provide here. When I see bullish signs, I add a lot more
stocks to the portfolio, usually by using an S&P 500 ETF as I did back in
October 2022 and 2023.
