Look: I am eager to learn stuff I don't know--which requires actively courting and posting smart disagreement.

But as you will understand, I don't like to post things that mischaracterize and are aimed to mislead.

-- Brad Delong

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Tuesday, December 29, 2020

Taking Stock - Week of 12/28/20

Monday, December 28, 2020

Green Arrow Up

DJi30 index at the close   —-   30,403.97   +204.10 (+0.68%)

The Index opened at 30283, the lo for the day, up 83 points, and immediately shot up another hundred.  By 10:00 it reached 30416, and 30526, a new intra-day hi at 10:30.  It slid to 30380 at 1:30, rose back up to 30450 and hovered there from 2:15 for about an hour before sliding into the close.

The Santa Clause Rally happens in the last week of the old year into the first two trading days of the new. That extends from today until a week from tomorrow, and got off to a strong start.  A gain of 0.68% is quite modest, but we got a new intra-day hi of 30256, and a new closing hi of 30404.  This is a clearly up day, with the hi and lo up by 316 and 184 points, respectively.  The span was 242.

Ignoring the aberrant low on 12/21, the rising wedge is getting narrower.  This can’t go on much longer, since the lines will cross in just a few days. 

Today was a rather tepid session on the NYSE, with volume at about 3/4 of the last 6 week’s average, and decline volume greater than advance volume.  The S&P500 and NASDAQ were also up today, but the Russell 2000, crude oil, silver and gold all slipped.

My way of measuring momentum looks at time spans from 5 to 34 days.  Today’s increase did next to nothing at the short end [which surprised me a little;] and the 34 day measure, which had been steadily rising to catch up, has now converged to head sideways with the five shorter ones.  They set up more or less this way - though far less neatly - a couple of times in late ’19 and early ’20 before the final convergence from Feb. 21 to 24.  After that came the crash. 

Can’t say with any certainty that history will repeat itself only a few months later, but it does seem likely that some sort of a down-turn will materialize in the reasonably near future.  Have I hedged that prediction enough?  There are few sure things in the real world.  So I’m very curious to see how this plays out.

% Changes -

DJI30  +0.68% 

SP500 +0.87%   

NASDAQ  +0.74%    

Russell 2000 -0.38%

DJI30 Closings -

12/28/18 - 23062 

01/02/20 - 28869

11/27/20 - 29910

12/28/20 - 30404

NYSE Internals -

A/D =  1658/1509 = 1.10

A/D Vol = 0.92

New Hi/Lo = 300/6 = 50

Tuesday, December 29, 2020

Monday, December 21, 2020

Taking Stock - Week of 12/21/20

Monday, December 21, 2020

Yellow Arrow Sideways

DJI30 Index at the close   —-   30,216.45   +37.40 (+0.12%)

Overnight, the DJI futures fell sharply between 4:00 and 6:00 a.m., bottoming near 29400, and were near 29680, off about 430 points at 9:00.  They rose about 90 points just before the opening bell.  The Index then opened at 30159. off 20 points, and immediately dropped to 29865, off 314.  It quickly recovered back to 30000, off 179, then dropped to the lo of 29755, off 424, before 10:30.  From there it was a slow steady climb to 29304, up 124 points and the day’s hi, at about 2:30.  After that, there was a slide to 30110 at 3:52, and then a 106 point rise into the close.

I didn’t expect a climb back into the green today, but that is where the Index ended up. The hi was 39 points under the all time intra-day hi set last Friday.  The close was 87 points under last Thursday’s all time closing hi, and two points under the close on 12/04.

Today’s span was 549 points, the largest since 803 on 11/09, the day the Index was up 834 points.  It was a strange day, with hi lower by 39 points, the 37 point gain at the close, and the lo off by 274.  The lo was the lowest since 11/30.

The Index, even with all the new highs, is really going nowhere. It seems that 30000 is a level this market just can’t get away from.  I ran a few numbers  for the action since 11/24 to check.  That was the day before Thanksgiving, and the first session to have intra-day and closing highs above 30000, at 30117 and 30046, respectively.

Total lo to hi span: 29463.94 to 30343.59; or 879.95 points.

Mean of the hi and lo = 29903.62

Average of all the daily highs and lows = 30015.36

Span as a % of all the highs and lows = 2.93%

So the range over this time is 30015.36 +/- 1.47%
The standard deviation for this data set is 215.

The 875.95 point range is 4.10 standard deviations.
The dataset is 29903 +/- 2.05 St Dev units.
There were no highs above this range, and only one lo below it.

Even with all the new intra-day and closing highs, this is a very well behaved data set.

All the indexes were close to neutral.  The other 3 were slightly negative.

Today’s lo fell outside the up slanting wedge, but in the end, nothing came of it.

% Changes -

DJI30  +0.12% 

SP500 -0.39%   

NASDAQ  -0.10%    

Russell 2000 -0.02%

DJI30 Closings -

12/21/18 - 22445

01/02/20 - 28869

11/18/20 - 29438

12/18/20 - 30216

NYSE Internals -

A/D = 1170/2016 = 0.58

A/D Vol = 0.49

New Hi/Lo =  177/6 = 29.5

Tuesday, December 22, 2020

Monday, December 14, 2020

Taking Stock - Week of December 14, 2020

Monday, December 14, 2020

Red Arrow Down

DJI30 Index at the close   —-   29,861.55   -184.82 (-0.62%)

The Index opened at 30124, up 78 points, and immediately shot up to 20240.  Then it climbed more slowly, hitting the hi of 30326, up 279, at 10:30, giving us a new all time intra-day hi - by 6 points.  [Yippee!] But by 11:30 it had dropped to 300100, and stayed below 30130 until dropping another 40 points by 12:30.  After that, it just kept tumbling, hitting 29960 at 2:30 and the low of 29849, 12 points below the close, in the last few minutes.  

The hi and lo were higher by 255 and 28 points, respectively.  But the Index tumbled almost continuously after the first hour. Maybe this illustrates the Smart Money Index that I mentioned last week - the idea being that emotional [dumb] money enters the market at the beginning of the day, and rational [smart] money trades at the end. The spread was 477 points, the largest since 498 on 11/18.

The big gains in November were concentrated in the first half of the month. Increases since, though real, have been rather tepid, and would have been far less impressive without the late October slump.  In fact, compared to the highs on 9/03 and 10/12, the recent gains, though real, are rather incremental.

All the indexes started hi this morning and slumped the rest of the day, though the NASDAQ and Russell stayed positive.

DJI30 momentum is still sideways, though at the micro level it’s been slipping for the last 3 sessions.  And today’s closing value is the lowest since 12/01.  The question always is - what will the follow-through be?  Today might have been a turning point leading into a slump.  The action for the rest of the week will either confirm or refute.  At least I hope so.

% Changes -

DJI30  -0.62% 

SP500 -0.44%   

NASDAQ  +0.50%    

Russell 2000 +0.11%

DJI30 Closings -

12/11/18 - 24101

01/02/20 - 28869

11/13/20 - 29480

12/10/20 - 29862

NYSE Internals -

A/D = 1218/1932 = 0.63

A/D Vol = 0.26

New Hi/Lo = 221/2 = 110.50

Tuesday December 15, 2020

Monday, December 7, 2020

Taking Stock - Week of December 7, 2020

Monday, December 7, 2020

Red Arrow Down

DJI30 Index at the close   —-   30,069.79   -148.47 (-0.49%)

The index opened at 30233, up 15 points, and a new intra-day hi.  It immediately started falling, and hit a local lo of 30036, off 182, after 10:00.  It recovered to about 30115 at noon, then resumed falling.  It hit the day’s lo of 29967, off 251, at 2:00.  From there, it zig-zagged into the close, gaining 100 points along the way.

This is an outside day by tiny margins.  The hi was higher by 15 points, and the lo was lower by 22.  The span was 266.

I guess this could be called a sideways day, since it’s only off a half percent; and if you chose to do that I wouldn’t argue.  But the Index slid most of the day, so I’ll stick with red. We’ll have to see what happens for the rest of the week.

Today’s close was the 2nd highest. [Friday’s was the highest at 30218; 11/24 is in 3rd place, at 30046.]  Momentum increased by the tiniest increment, but remains basically sideways, as it has been since 11/16.  

This day was uninformative.  It’s hard to say whether the Index is topping or biding time for another thrust up.  An impulsive move below 30000 would be required to support the bearish case.

% Changes -
DJI30 -0.49%
SP500 -0.19%
NASDAQ +0.45%
Russell 2000 -0.06%

DJI30 Closings -
12/07/18 - 24389
01/02/20 - 28869
11/06/20 - 28323
12/07/20 - 30070

NYSE Internals -
A/D = 1315/1823 = 0.72
A/D Vol = 0.61
New Hi/Lo = 286/2 = 143.0 

Tuesday, December 8, 2020