12-24-17 Market Commentary

 

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Market Breadth: With this past week’s market advance, our Bull/Bear Point and Figure Ratio at 1.69, rose from 1.32 last week, advancing within bullish territory. The total count of securities in bullish or bearish patterns increased 3% to 3205. The count of bearish stocks decreased 12%, while the count of stocks in bullish patterns increased 14%. The Sand 2 Pirls P&F Market Breadth Summary Chart shows us a market now seventeen weeks in bullish territory. Paid subscribers have access to the OpenOffice Calc data from which the chart is generated.

The well known market breadth indicator, the NASDAQ McClellan Summation Index (NASI) rose 32 points for the third advance in ten weeks. At a positive 120.60 points, it  continues below all seven tops in the last 30 months, and continues above all five bottoms in the last 30 months. 

Volume Analysis: In this week’s volume analysis, the NASDAQ Composite Index ended in neither Accumulation nor Distribution mode with average daily volume lower than the prior week. In the last two weeks the NASDAQ had two (2) Accumulation days and two (2) Distribution days. (Accumulation days are counted when the index closes up on higher volume than the prior day while Distribution days occur when the index closes down on volume higher than the prior market day.) Last week, the NASDAQ ended in Accumulation mode on lower average daily volume.

Momentum: The CCI(20) daily in a Woodie’s Up trend is now at +98.10, down from +136.85 last week. At Wednesday 12/6 close, the CCI(20) daily was within the +/- 50 range for a ZLR (Zero Line Reject) pivot and Long entry signal at Thursday 12/7 close. At Fri 12/22 close the CCI(20) fell below +100 to signal our exit from the trade at Tuesday 12/26 open. We will report the results of this trade simulation in next week’s commentary.
In Woodie’s CCI trading system, six consecutive bars above or below zero are required for a change of trend. The Weekly CCI(20) of the NASDAQ Composite Index began a Woodie’s up trend eighty-six weeks ago, while the Daily CCI(20) began a Woodie’s up trend fifteen weeks ago.
The CCI(20) weekly at +128.92, is up from +123.887 last week after forming a ZLR (Zero Line Reject) Long entry signal for Tuesday 9/5 open. Our rule is to stay in the trade until the CCI(20) drops below +100. We will continue to follow the result of this trade simulation in next week’s commentary.
Industry Rotation the last two weeks: All of the top five industries are  positive and four of the bottom five are negative. Summary: Gold & Silver, Oil Services, Oil, and S&P Retail on top; REITs and Disk Drives on the bottom. Bullish: S&P Retail has entered the top five. Bearish: Gold & Silver PHLX continues in the top five. REITs and Disk Drives have entered the bottom five. Comp Tech, Disk Drives, Computer Hardware, and Semis PHLX have left the top five. Oil Services has left the bottom five and entered the top five.
Focus this week: From www.zerohedge.comHow Will Tax Reform Affect You: Find Out With This Interactive Website“. The following are some key points.

  • Will you be paying US taxes in 2018? If so, this interactive model created by JPM is for you.

    The Tax Cuts and Jobs Act (TCJA), which was signed into law by Donald Trump this week, is projected to reduce individual tax payments by over $1 trillion over the next 10 years, more than triple the tax cut impact on businesses and corporations.

    However, the impact on individual taxpayers will differ, and depends on their income and deduction characteristics.
     

  • X


     

  • The bill entails changes to marginal tax rates, tax bracket levels, itemized deductions, the child tax credit and the Alternative Minimum Tax, and creates a new approach to pass through entity taxation.

    To allow everyday Americans from all walks of life (as well as certain subsets of Wall Street workers) to estimate the impact of the TJCA on their tax burden, JPMorgan developed an interactive website to give you some sense for how the changes might impact your combined Federal and state effective income tax rate.

    Simply choose from among the taxpayer types which include:

    • Salaried workers
    • Hedge fund managers
    • Retirees
    • Private Equity Principals
    • Trust Beneficiaries
    • Pass Through Entity: Owners
    • Pass Through Entity: Investors
    • Pass Through Entity: Services
    • Diversifieds

    … and whether your itemized deductions are high or low. If you are a pass through entity owner or investor, you will need to choose whether the pass through entity has high or low wage intensity. The chart will then display effective tax rates under the current system and under the TCJA across a range of total income, such as the one below.

    Click on the ‘View’ links for more information on the menu selections and to be taken to the interactive JPM website.

    As an added feature, the website will allow you to calculate the incentive for any given taxpayer type to move from a high tax state (10% state income tax, 2% property tax) to a low state tax (no state income tax, 1% property tax).

–Donald Pirl www.s2pmarketsignal.com


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