Old Skeet's Barometer Report

[archer]

Tom Bowley's vid this morning has a good section on divergences. About 6 min to 13 in the vid, and some more later. He is using PPO rather than RSI, but I think the principles still apply.

[uncleharley]

Today saw most equity indexes make minor gains on very light trading volume.  The small and mid-caps made the best gains on above average trading volume, implying that market participation was becoming broader. 2, 5, & 10 yr treasury rates all declined for one day in a row.  We shall see if a trend develops.  The equity market seems to be back in a consolidation mode.

[oldskeet]

Hi archer. Thanks for posting the Utube link for Tom Bowley's commentary. I know you commented that the two of you have breakfast several times a week; but, please make sure he is cool with you doing this. There is no problem on my end. Old_Skeet

[archer]

Feb 7, 2024 0:00:16 GMT oldskeet said:

Hi archer. Thanks for posting the Utube link for Tom Bowley's commentary. I know you commented that the two of you have breakfast several times a week; but, please make sure he is cool with you doing this. There is no problem on my end. Old_Skeet

I know there is a courtesy to follow when posting info from others, but I've never been clear on the rules. My breakfast with Tom I mentioned earlier is just me watching his youtube vids tues.- thurs.  I assume public youtube links should be OK since they are on youtube for anyone to see. 

[anitya]

archer,

You are fine to post public URLs.

I started listening yesterday but he started his show with a rant on Federal Reserve and so I stopped and so did not get to the portion you alluded to.

Thanks

[yogibearbull]

AAII Bull-Bear Spread +26.4% (high)

%Above 50-dMA for NYSE 54.39% (positive)
%Above 50-dMA for SP500 64.20% (positive)
(Scale: oversold < 30-; 30 < negative < 50-; 50 < positive < 70-; overbought > 70)

Big stock rally continued (IVV, QQQ), but others lagged (RSP, IJR).

[uncleharley]

The Nasdaq, the small caps, mid caps, & the nasdaq 100 are making solid advances this morning while the S&P 500 and the DJI are struggling. It looks like market participation is becoming broader.

[FD1000]

Observations: since 12/2023 I read and heard the following by many in the media.
1) The market expanded to more categories. LC growth still leads. HC is doing well but still behind (schrts.co/JbbVDEbc)
2) Interest rates will be cut 5-7 times and LT rates will follow. No rates cuts yet and the first cut maybe in May 2024 according to CME.  The 10 year rate went down to from Nov/2024 to the end of the 2023, but it is in an uptrend YTD. If Rates would go down = buy treasuries. Reality: treasuries lost YTD. This category supposed to protect you, not to lose money.
3) The mag 5-6-7 or LC growth are too expensive, and overvalue = switch to other categories + equal weighted index.  Reality: LC growth made 7+% YTD.
4) The market, AKA the SP500, is overvalued, sell to cash. How many times I heard this in the last several years? imagine if you disregarded it and just invested your stocks in the SP500 since 2010. That's already 14 years.

[anitya]

This is as good a thread as any to share the following:

“It's not what you buy, it's what you pay. Success in investing doesn't come from buying good things but from buying things well. If you don't know the difference, you're in the wrong business.”

- Howard Marks

[uncleharley]

Feb 9, 2024 8:24:56 GMT anitya said:

This is as good a thread as any to share the following:

“It's not what you buy, it's what you pay. Success in investing doesn't come from buying good things but from buying things well. If you don't know the difference, you're in the wrong business.”

- Howard Marks

I would add that in an auction environment, what you pay is largely determined by when you buy it.  Market timing is not everything, but it is crucial to being a successful investor.

[mnfish]

Feb 9, 2024 2:22:04 GMT FD1000 said:

Observations: since 12/2023 I read and heard the following by many in the media.
1) The market expanded to more categories. LC growth still leads. HC is doing well but still behind (schrts.co/JbbVDEbc)
2) Interest rates will be cut 5-7 times and LT rates will follow. No rates cuts yet and the first cut maybe in May 2024 according to CME.  The 10 year rate went down to from Nov/2024 to the end of the 2023, but it is in an uptrend YTD. If Rates would go down = buy treasuries. Reality: treasuries lost YTD. This category supposed to protect you, not to lose money.
3) The mag 5-6-7 or LC growth are too expensive, and overvalue = switch to other categories + equal weighted index.  Reality: LC growth made 7+% YTD.
4) The market, AKA the SP500, is overvalued, sell to cash. How many times I heard this in the last several years? imagine if you disregarded it and just invested your stocks in the SP500 since 2010. That's already 14 years.

2) If you bought a 10yr at a 4% yield in Jan and it still yields 4%, how exactly did you lose money YTD? Not everyone "trades" bonds. Some just want the 4% interest and a return of their investment for a portion of their portfolio.
Who was the guy on MStar that used to always post that "bond funds are not bonds"?

4) Isn't 2010 about the time when you got out of the stock market?

[uncleharley]

My Friday P M observations are that the S&P 5000 finally broke and closed above 5000, that the small caps and mid-caps are participating in the rally, and we are in a stable interest rate environment. GDP indicates that the economy is growing and the labor market is stable. What's to not like???

[retiredat48]

Feb 9, 2024 21:23:23 GMT uncleharley said:

My Friday P M observations are that the S&P 500 finally broke and closed above 500, that the small caps and mid-caps are participating in the rally, and we are in a stable interest rate environment. GDP indicates that the economy is growing and the labor market is stable. What's to not like???

That was many, many Fridays ago the S&P broke above 500.  I'm not sure I was investing back then.

Recently it broke above 5000....no!

R48

[oldskeet]

Hi guys. For the weekending February 9, the S&P500 Index closed for the first time above 5000 at 5027(round number). Year to date the Index has gained 257 points moving from 4770 to 5027 for a 5.38% gain. It's ttm earnings yield is 3.8% based upon ttm earnings of $191.31 putting the ttm p/e ratio at 26.3%. Old_Skeet's Barometer closed the week with a reading of 70 (overvalued). At the beginning of the year my thoughts were that the Index would reach 5200 sometimes before year end. It now sits at 173 points away from reaching this mark. It will be interesting to see just where it does finish the year. Thus far, it has meat and handled the headwinds that it has meat, thus the bull keeps changing a head. How long this last is anybody's guess. What concerns me most is that this rally is based upon the performance of a small number of stocks and is not a broad based rally. The cap weighted Index is up about 5.4% while the equally weighted Index is up about 0.75%. That is a pretty large difference. Now you perhaps understand why many question if this rally has long legs? In time we will have an answer. For now the Bull runs.  Wishing All, Good Investing. OS

[FD1000]

On Jan 19, 3 weeks ago, I posted "You can just keep it simple using 3 funds" (link).
SPY or QQQ (generic or targeted)
PDI (that's for you R48, as I said many times before, I have nothing against CEFs, just against lagging categories).
RSIIX for the bird in the hand bonds.

[habsui]

Feb 10, 2024 14:37:52 GMT FD1000 said:

On Jan 19, 3 weeks ago, I posted "You can just keep it simple using 3 funds" (link).
SPY or QQQ (generic or targeted)
PDI (that's for you R48, as I said many times before, I have nothing against CEFs, just against lagging categories).
RSIIX for the bird in the hand bonds.

I'm certain you have been posting this three times each week..

[oldskeet]

Hi guys. Here is the Leadership Investment Strategy Recap for the weekending February 9th. QQQ is still the lead hound with a track score of 23.31, followed by SPY with a score of 19.43, and Place goes to MDY with a score of 16.27.  The two other ETFs with positive momentum were EWJ and SHV with scores of 15.88 and 2.87 respectively. Thanks for stopping by. Wishing All, Good Investing. OS

[uncleharley]

Based on the daily and weekly charts, It appears to me that MDY is poised to break to a new all-time high. That break out should put the mid-caps in the lead.

stockcharts.com/h-sc/ui?s=MDY&p=W&b=3&g=0&id=p40343287923&listNum=86&a=1601515658

[uncleharley]

As of noon, et, The S&P 500 was at a new high, the S&P mid-caps were at a 2 yr high, and the S&P small-caps were at a YTD high. Some individual stocks are expensive, making this a stock pickers market.

[oldskeet]

Hi guys. Yesterday, IJR and MDY made strong advances in the Leadership Investment Strategy and overtook SPY and are closing in on QQQ. I would not be surprised if both IJR and MDY both finish the week as members of the lead pack. EEM was on the move yesterday as well with good momentum but has a good ways to go to catch the lead pack.  OS

[archer]

Near term, options expiration is this Fri, and while I don't really understand options, commentators have suggested that this particular options expiration isn't favorable for market gains this week.

Seasonally the 2nd 1/2 of the first quarter is not a good period, whereas the first 1/2 usually is a good period for the market. I'm not making any changes based on the above.

[oldskeet]

Hi guys. The Big Spoiler showed up today and reported that year over year inflation was 3.1% which was higher than had been forecast. This effected not only stock but bond valuations as well. The US10YrT yield rose 3.45% to a yield of 4.316%. For stocks SPY lost 1.4%, MDY declined 2.5%, and IJR have back 3.0%. Rising interest rates are headwinds for stocks especially small caps. This is just for starters as come Friday is a big options settlement day so there could be more downside coming. Old_Skeet is long term bullish; and, I plan to do a little near term buying should today's decline be the start of a February/March pullback. We will have to wait and see how the driving forces choose to govern. I have ample cash and will deploy some of it when I feel opportunity presents itself. For now, this higher than expected inflation report most likely will give the FOMC pause and push interest rate cuts to later in the year. And, so it goes. Ain't investing a mixed bag of tricks? OS

[oldskeet]

Hi guys. After yesterday's sell off I thought I'd post an update on the Leadership Investment Strategy. Currently, as I write, QQQ has the lead with a track score of 18.54. In the place position is SPY with a score of 16.35 and show goes to MDY with a score of 15.23. Close behind id IJR with a score of 13.72 and EWJ with a score of 12.45. The higher the score the better the performance.

[uncleharley]

archer,uncleharley,oldskeet,anitya,yogibearbull,FD1000,mnfish,retiredat48,habsui, I think that expecting 2 broad based buying opportunities in the same week is unreasonable. Possibly unprecedented.

[FD1000]

Nothing major changed IMO.
LC tilting growth is in since 2010.  SPY/VOO are a good choice, VUG/QQQ is more growth.
BTW, chips usually lead growth = SMH.  FSELX is even better, see (schrts.co/TyPIBtat).

When the world is in trouble, AKA covid or inflation, what country, Fed, companies have better control? The US.
What companies can handle it better? small, international? no, again SPY,QQQ
The Dollar and treasury rates are in uptrend.

For bonds: I will post in more details under the bond thread (link).

[uncleharley]

I have no other place to post this, but I believe it is something well worth reading.

Sometimes it's really worth reading the details of the CPI release on the BLS website. Just noticed: shelter was up 0.6% accounting for MORE THAT TWO-THIRDS of the all items increase, That means ex-shelter, CPI would have been up 0.1% or less. Of course reality has nothing to do with changes in asset prices ---- only herds of people trading assets do. However, Fed is most interested in CPI less food energy and shelter because they have no tools to address th9se exceptions. Nonetheless, the CPI release probably cost global bond and equity markets several trillion dollars. It would be funny if it was not so costly.

Regards, Dick

[yogibearbull]

AAII Bull-Bear Spread +15.4% (above average)

%Above 50-dMA for NYSE 55.38% (positive)
%Above 50-dMA for SP500 56.80% (positive)
(Scale: oversold < 30-; 30 < negative < 50-; 50 < positive < 70-; overbought > 70)

With good economic data & stock market, the Fed won't rush to cut. Japan is in technical recession - an example of bad economy, good stock market; the BOJ may remain easy for longer.

[uncleharley]

The large cap indexes closed down for the week while the small and mid-caps closed up. WITC closed up a per cent, while Nat Gas looked for a new bottom. Gold closed down while silver was up. I guess we are in a stable market.

[oldskeet]

Hi guys. It appears to me that the market is trading more on economic growth and projected higher earnings more so than on interest rates and inflation news as the S&P500 Index reached a new all time high of 5029 on Thursday after pulling back on Monday from a higher inflation report as noted above in comments made on Tuesday. For the week the Index gave back 21 points moving from 5027 down to 5006 on Friday which was an options expiration day. The yield on the US10YrT gained 11 basics points moving from 4.19% to 4.30%.

Old_Skeets Barometer closed the week with a reading of 69 (overvalued). Generally the stock market tends to go soft about now on into March. It will be interesting to see if this seasonality trend holds or it continues it's upward path as thus far since the last of October it has successfully navigated the headwinds that it has meat. No doubt, the bull continues to run.

For the Win, Place and Show Investment Strategy MDY took the lead with a track score of 17.15 followed by IJR in the Place position with a score of 17.11 and Show was QQQ with a score of 16.98. SPY finished the week with a score of 16.58. Seem to be a pretty tight pack at present.

Thanks for stopping by and reading. Wishing All Good Investing. Old_Skeet

[FD1000]

Last week... SPY started at 501 on 2/09/2024 and closed on 2/16/2024 at 500. It was one of the best examples of doing-nothing weeks.

SPY performance has been amazing at 5+% for 1 month and 11+% for 3 months, a breather can happen any time. In the last 10-15 years Feb was a positive month.

Attachments: