“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
I hope you and yours have a very Merry Christmas.
PERSONAL INCOME / SPENDING (nasdaq.com)
“...personal income and spending in the U.S. both
increased in line with economist estimates in the month of November...personal
income rose by 0.4 percent in Novembercent in October...personal spending
advanced by 0.6 percent in November after jumping by 1.4 percent in October.”
Story at...
PCE PRICES (ABC News)
“U.S. consumer prices rose 5.7% over the past year, the
fastest pace in 39 years, as a surge in inflation confronts Americans with the
holiday shopping season under way.” Story at...
https://abcnews.go.com/US/wireStory/consumer-prices-57-past-year-fastest-39-years-81913747
JOBLESS CLAIMS (Yahoo Finance)
“Initial jobless claims, week ended Dec. 18: 205,000
vs. 205,000 expected and a downwardly revised 205,000
during prior week...” Story at...
https://finance.yahoo.com/news/weekly-unemployment-claims-week-ended-dec-18-2021-232812196.html
DURABLE ORDERS (Reuters)
“New orders for U.S.-made capital goods unexpectedly fell
in November while shipments rose modestly, suggesting that shortages were
hampering business spending on equipment. Orders for non-defense capital goods
excluding aircraft, a closely watched proxy for business spending plans, dipped
0.1% last month...” Story at...
NEW HOME SALES (YahooFinance)
“Existing home sales rose 1.9% to a seasonally adjusted
6.46 million million units in November from a month earlier, according to the National Association of Realtors (NAR). The number of
sales was down 2% from the same month a year ago...” Story at...
https://finance.yahoo.com/news/existing-home-sales-november-2021-150006550.html
UNIV MICHIGAN SENTIMENT (Univ Michigan)
“Although consumers were slightly more optimistic about
economic conditions in the December survey, nearly all the data were collected
prior to the rapid spread of Omicron in the U.S., according to the University
of Michigan Surveys of Consumers. While it is likely that confidence will
decline in the month ahead, it is simply too early to judge the eventual impact
of Omicron on prices, incomes and employment, said U-M economist Richard
Curtin, director of the surveys.” Story at...
https://news.umich.edu/consumer-confidence-omicron-plays-holiday-grinch/
SANTA CLAUSE RALLY IS HERE (msn.com)
“A Santa Claus Rally is one where stocks climb higher in the
final seven trading sessions of a year plus the first two trading days of the
New Year. Its precise cause has never been greatly explained — theories range
from year-end tax considerations to people spending their fat bonuses to buy
stocks to general seasonal effects.” Story at...
Santa
Claus Rally time for stock market? 92 years of data says maybe (msn.com)
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website as
of 5:30 PM ET Thursday.
U.S. total case numbers are on the left axis; daily numbers are on the right
side of the graph in Red with the 10-dMA of daily numbers in Green. I added the
smoothed 10-dMA of new cases (in purple) to the chart.
Daily new cases remained over 200,000 today. The spike in
new cases is real. I saw a report that
cases doubled overnight in Los Angeles County. Omicron is driving the spike.
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 rose about 0.6% to 4726.
-VIX fell about 5% to 17.66.
-The yield on the 10-year Treasury rose to 1.495%.
On 21 December, we noted that the 52-week,
New-high/new-low ratio improved by 3.7 standard deviations. Today, we see that
the % of new-highs (compared to new-highs+new-lows) is now rising so the two
signals are a good bullish sign indicating weakness should be over for a while.
The Friday run-down (on Thursday) improved overall, but it would have been merrier
to see it more bullish.
The Friday run-down of some important indicators turned
to the Bull side (8-bear and 12-bull). These indicators tend to be both
long-term and short-term, so they are different than the 20 that I report on
daily. Details follow:
BULL SIGNS
-The smoothed advancing volume on the NYSE is rising.
-23 December, the 52-week, New-high/new-low ratio
improved by 3.7 standard deviations and the % of new-highs is also increasing -
Bullish.
-Buying Pressure is bullish.
-MACD of S&P 500 price made a bullish crossover, 23
December. This has bounced back and forth recently.
-Short-term new-high/new-low data is rising.
-Long-term new-high/new-low data is rising.
-McClellan Oscillator.
-The Smart Money (late-day action) is rising. (This
indicator is based on the Smart Money Indicator developed by Don Hayes).
-The 5-10-20 Timer System is BUY; the 5-dEMA and 10-dEMA
are both ABOVE the 20-dEMA.
-The S&P 500 is under-performing the Utilities
ETF (XLU) over the last 40 sessions, but only by a little. The trend is sharply
improving so let’s call this one bullish.
-55% of the 15-ETFs that I track have been up over the
last 10-days – bullish.
NEUTRAL
-The S&P 500 has had 2 Distribution Days in the last
25-days; Neutral. Others were cancelled by a Follow-thru day 15 December.
-The S&P 500 is 8.3% above its 200-dMA (Bear indicator
is 12%.). This value was 15.9% above the 200-dMA when the 10% correction
occurred in Sep 2020.
-Non-crash Sentiment indicator is very bullish (96%-bulls
on a 5-day basis), but not enough to send a bear signal. (Too bullish is
bearish.)
-Bollinger Bands are neutral.
-Back-to-back >80% up-volume days cancelled two prior
high, down-volume days and gave a bullish buy signal on 7 December. This signal
has expired.
-Overbought/Oversold Index (Advance/Decline Ratio) is neutral.
-RSI is neutral.
-The Fosback High-Low Logic Index is neutral.
-The size of up-moves has been smaller than the size of
down-moves over the last month, but not enough to send a signal.
-The Calm-before-the-Storm Indicator was warning; then
there were 2 Panic Indicators on 26 & 30 November suggesting more downside
to come. – Signal has expired.
-There have been 10 up-days over the last 20 sessions –
Neutral.
-There have been 5 up-days over the last 10-sessions –
Neutral.
-Slope of the 40-dMA of New-highs is flat. This is one of
my favorite trend indicators.
-There were Hindenburg Omen signals 13 & 16 December. These have been cancelled because the
McClellan Oscillator turned positive.
-VIX.
-There have been 4 Statistically-Significant days (big
moves in price-volume) in the last 15-days. This can be a bull or bear. Now
it’s neutral.
BEAR SIGNS
-The 10-dMA % of issues advancing on the NYSE
(Breadth) is below 50%.
-The 50-dMA % of issues advancing on the NYSE (Breadth)
is below 50% today.
-The 50-dMA % of issues advancing on the NYSE (Breadth)
has been below 50% for 7 consecutive days.
-The 100-dMA % of issues advancing on the NYSE
(Breadth) is below 50%
-MACD of the percentage of issues advancing on the NYSE
(breadth) made a bearish crossover 11 November; it is close to a bullish cross.
-Breadth on the NYSE is too low when compared to the
S&P 500 index.
-My Money Trend indicator is falling.
-3.0% of all issues traded on the NYSE made new, 52-week
highs when the S&P 500 made a new all-time-high, 23 December. (There is no
bullish signal for this indicator.) This reminds us again that the advance is
too narrowly focused on a limited number of issues.
-Cyclical Industrials (XLI-ETF) are under-performing the
S&P 500.
On Friday, 21 February, 2 days after the top before the
Coronavirus pullback, there were 10 bear-signs and 1 bull-sign. Now there
are 9 bear-signs and 11 bull-signs. Last week, there were 16 bear-signs and
5 bull-signs.
The daily sum of 20 Indicators improved from -9 to -1
today (a positive number is bullish; negatives are bearish); the 10-day
smoothed sum that smooths the daily fluctuations declined from -39 to -40 (The
trend 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 indicators are short-term so they tend to bounce around a
lot.
The Long Term NTSM indicator
ensemble remained HOLD. VIX, Volume, Price & Sentiment are Neutral.
I am a cautious Bull. We’ll see
how long this market can keep going. No
trading on Friday since Christmas is Saturday.
MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs
(Ranked Daily)
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
TODAY’S RANKING OF THE DOW 30
STOCKS (Ranked Daily)
Here’s the revised DOW 30 and
its momentum analysis. 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)
Market Internals are a decent trend-following
analysis of current market action, but should not be used alone for short term
trading. They are usually right, but they are often late. They are most useful when they diverge from
the Index.
My stock-allocation in the
portfolio is now about 50% invested in stocks; this is my “normal” fully
invested stock-allocation of 50%. I trade about 15-20% of the total
portfolio.
You may wish to have a higher
or lower % invested in stocks depending on your risk tolerance. 50% is a
conservative position that I consider fully invested for most retirees.
As a general rule, some
suggest that the % of portfolio invested in the stock market should be one’s
age subtracted from 100. So, a
30-year-old person would have 70% of the portfolio in stocks, stock mutual
funds and/or stock ETFs. That’s ok, but
for older investors, I usually don’t recommend keeping less than 50% invested
in stocks (as a fully invested position) since most people need some growth in
the portfolio to keep up with inflation.
