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December 23, 2017 – Weekend Market Comment

December 23, 2017 – For the 70th time in 2017, we set a new record high during this week.

U.S. equities fell slightly on Friday, but traded near record levels, after lawmakers agreed on a plan to prevent a government shutdown. The Dow Jones industrial average slipped 53 points, with Nike leading decliners. The S&P 500 traded 0.1 percent lower, with financials falling 0.4 percent. The NASDAQ composite declined 0.2 percent. Despite small declines, the major indexes remained about 1 percent below record highs set earlier this week.

Here is what our charts say:

CLICK HERE: To see the 100 and 200 series charts

101 Bull Bear
Bull market (dark green over red)  the dark green 50 day average is in a parabolic uptrend.   NOTICE THE SLOPE (second window), we are in a big upturn!  Bull market -- expect bullish outcomes.
103 NYSE High Low Market Forces
Breadth lines on a tear... BULLISH

105 Non Farm Payroll
Lots of jobs! But beware this is lagging indicator. The smart money is gone before this turns down.

107 Industrial Production
Renewed stronger industrial production. All hail the Trump Bump. BULLISH
115 Renko
sideways trend CAUTION
203 OBV
OBV (red line) the big boys are still a bit on the sidelines. CAUTION

207 VIX
Fear is spooky low again. CAUTION

209 VIX Evaluator

211 S&P500 over 50 day
Now about 73% of stocks are above their 50 day MA,  slightly up from last week when it was 74%. 

213 Green Arrow
Very bullish.

301 NASDAQ Summation
Nasdaq breadth sideways. 

303 Aggressive Defensive
Very strong. BULLISH

305 Consumer Bonds vs Equities
Bonds fall consumer up. BULLISH

307 Bond Direction
Bonds rise a tiny bit

309 Sectors
Utilities suck.. finance leading all based on upcoming increase in bond rates causing concerns. Going in to Christmas the consumer is strong. BULLISH

311 Nations
Germany catches a bounce.

313 Major sectors
Nothing beats USA now.

! = Pay attention this chart is important this week.

What I Find Interesting

The Warning

If you have not done so please read my rant on why the markets are set for a sell off.

Long Tea Becomes Long Shot
Long Island Ice Tea (Ticker: LTEA) announced it is getting in to Blockchain something eruther and woosh, the stock surged to 5 times last weeks price. If you ever want proof this is a bubble, here is your sign.

Bitcoin The Big Short
This week Bitcoin started trading on a second futures market ... the CME and well it has been ugly folks. In just a few days it is now worth almost half it $20,000 peak. Of course I would not need a bitcoin if I just had a nickle for everyone that asked me about Bitcoin this week. What Is say is you can't "invest" in Bitcoin, you can gamble on Bitcoin, but not invest. 

Apple iPhones Have Built in Obsolescence Software 
Users posting on Reddit have found that Apple is using details on how old your battery is, to slow the processor, so that they sell more newer iPhones -- as the old ones become unbearable. CPU frequencies can be set as low as half speed as the battery ages. 

What Works Now

Life Saving Biotech
FibroGen creates new class medicines to treat chronic and life-threatening conditions such as anemia, idiopathic pulmonary fibrosis, and pancreatic cancer.  FibroGen (Ticker:FGEN)

Rotating Nations

If you want to put a segment of your funds outside of US lets look at some top performing nation based ETFs. 

Here are the picks for December hold until month end:
50% EPOL Poland
35% EWZ Brazil
15% AFK Africa

What I Think

I think we are in a cyclical bull market (since February 2016) within a near record long, secular bull market (since early-2009), and neither show signs of abating.

It is a Merry Christmas, thanks in part to over optimism. Stock indexes are rising again this week led by airlines, banks, oil service stocks, and small caps. Utilities are taking another bad hit because of fear of interest rate hikes will hurt them. Money continues to be laundered in real estate, from China on the west coast and Russia on the east coast, so home builders are helping lead consumer cyclical stocks higher. Selling in semiconductors is weighing on the technology sector which continues to lag behind. Foreign stocks are also rebounding.

A typical year for a stock index like the S&P500 is 9% return, this year is over 25% that alone tells you this was a good year be thankful -- but don't think you are entitled to two such years in a row. 

The market has some warnings that there will be consolidation and profit taking now that the Trump tax bill is done... so a bit of a correction could happen, or just flat for a while. However in 3 out of 4 years there is a year end surge in prices in the last week of the  year. The big picture is solid, overbought can go on a long time, and so far has. In 2017 you have been participating in the second longest bull market in our lifetimes. Merry Christmas.

You can learn more about my indicators by visiting the CME4PIF school by clicking here.

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