A Mixed Picture: S&P Flat, Dow Down And Nasdaq Up


[Chart courtesy of MarketWatch.com]

  1. Moving the Markets

US oil got spanked again at the tune of -2.19% on top of yesterday’s 3.85% loss, hurting the energy sector and negating advances in the financial and healthcare arenas. The S&P was unchanged, but the Nasdaq managed to buck the trend again by advancing +0.36%.

Midday, it looked like the Dow might be successful with another attempt to conquer the 20k level by reaching 19,950, but selling pressure set in and down we went. I suspect that we may see more of this aimless meandering as traders are awaiting earnings season, and the January 20th inauguration, to get a better sense as to not just how but if Trump’s ambitious economic plan plays out as advertised.

In other words, the post-election exuberance has reached an end, and Wall Street appears to have settled into a wait-and-see mode before pushing the indexes further into bubble territory. Any suggestion that earnings are not what was expected, or Trump’s plans are not executable within a reasonable amount of time, and we’ll undoubtedly see a negative reaction in equities.


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Slowing Momentum


[Chart courtesy of MarketWatch.com]

  1. Moving the Markets

At least for today, New Year momentum slowed as the major indexes predominantly hovered below the unchanged line and closed at their lows for the session. The exception was the Nasdaq, which managed to eke out a gain of +0.19%.

It was a tale of opposing market forces as technology strength was offset by weakness in financials and the energy sector. Oil took a beating and lost -3.85%. Bonds pulled back as Treasury yields rose slightly. The dollar came off its lofty level and, as a result, gold was the winner by adding +0.80%.

It seems right now we are in a holding pattern with earnings on deck as Wall Street is dealing with the political uncertainty as to whether Trump will be able to deliver on tax cuts, lighter regulation and fiscal stimulus.


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One Man’s Opinion: January 2017 Earnings Are Going To Be A Bloodbath

OneMan'sOpinionBy EconMatters

We discuss a preview of January`s Earnings releases and how massive the gap down in most of these stocks will be when they report in a month. There have already been two earning`s guide downs from industrial companies this past week in UTX, and HON.

But with the run up in financials and energies for the last month we are going to experience big $5 chunks taken out of these stocks and massive after hours and pre-market gap downs that will cause entire sectors to sell off during earnings in January. It is just going to be brutal, expect 500 point down days in the Dow during this upcoming earnings period.

You have seasonal stocks that selloff every year like Apple and Amazon, as the 4th quarter is their best by far for sales and revenues. And you have energy companies with exorbitant p/e ratios like COP, XOM, CVH that are priced for $115 dollar oil not $55 oil that 4th quarter earnings releases are going to bring some fundamental realities back to investors of how overpriced these stocks are right here.


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ETFs On The Cutline – Updated Through 01/06/2017

Below please find the latest High Volume ETFs Cutline report, which shows how far above or below their respective long-term trend lines (39 week SMA) my currently tracked ETFs are positioned.

This report covers the HV ETF Master List from Thursday’s StatSheet and includes 366 High Volume ETFs ETFs, defined as those with an average daily volume of more than $5 million, of which currently 234 (last week 201) are hovering in bullish territory. The yellow line separates those ETFs that are positioned above their trend line from those that have dropped below it.

Take a look:

The HV ETF Master Cutline Report            

In case you are not familiar with some of the terminology used in the reports, please read the Glossary of Terms.

If you missed the original post about the Cutline approach, you can read it here.

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ETF Tracker Newsletter For January 6, 2017

ETF Tracker StatSheet


Market Commentary

Dow 19,963.80


[Chart courtesy of MarketWatch.com]

  1. Moving the Markets

The assault at the Dow 20k marker continued but fell short once again. Given that we are in a manipulated market environment, I am pretty sure that we will conquer that milestone prior to the change in administrations on January 20th. After that, it’s anybody’s guess as to what will happen next.

The Nasdaq and S&P 500 reached record highs, but the advance was not broad based with small-caps down and mid-caps barely above the unchanged line. The big boost came from

Apple sporting a +1.11% gain. We’re still in post-election hope-mode that Trump, once in office, will be able to follow through and implement his campaign promises. Let’s see how hope and reality come together after inauguration day.

Today’s jobs report was not impressive as 156k jobs, less than expected, were added with the bulk going to nurses, waiters and waste cleaners, as ZH reported. Wage growth rose just 2.5%, which is far below the 4% it was when the unemployment rate last hit 4.7%.

Factory orders plunged in November and, when viewed YoY, they have declined now for the 23rd month out of the last 25. Hardly a reassuring sign of a growing economy…


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Weekly StatSheet For The ETF Tracker Newsletter – Updated Through 01/05/2017

ETF Data updated through Wednesday, January 05, 2017


Methodology/Use of this StatSheet:

  1. From the universe of over 1,800 ETFs, I have selected only those with a trading volume of over $5 million per day (HV ETFs), so that liquidity and a small bid/ask spread are assured.
  2. Trend Tracking Indexes (TTIs)

Buy or Sell decisions for Domestic and International ETFs (section 1 and 2), are made based on the respective TTI and its position either above or below its long-term M/A (Moving Average). A crossing of the trend line from below accompanied by some staying power above constitutes a “Buy” signal. Conversely, a clear break below the line constitutes a “Sell” signal. Additionally, I use a 7.5% trailing stop loss on all positions in these categories to control downside risk.

  1. All other investment arenas do not have a TTI and should be traded based on the position of the individual ETF relative to its own respective trend line (%M/A). That’s why those signals are referred to as a “Selective Buy.” In other words, if an ETF crosses its own trendline to the upside, a “Buy” signal is generated. Since these areas tend to be more volatile, I recommend a wider trailing sell stop of 7.5% -10% depending on your risk tolerance.

If you are unfamiliar with some of the terminology, please see Glossary of Terms and new subscriber information in section 9.


  1. DOMESTIC EQUITY ETFs: BUY — since 4/4/2016

ttiClick on chart to enlarge

Our main directional indicator, the Domestic Trend Tracking Index (TTI-green line in the above chart) is positioned above its long-term trend line (red) by +1.59% after having generated a new Domestic Buy signal effective 4/4/2016 as posted.


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