Market Commentary

More Weakness, More Highs – Weekly Market Review January 22nd, 2021

The tone of the market changed this week when all of the attention that was on cyclicals rotated into technology. Financials wobbled lower 2%, and energy drifted lower (-1.75% ). However, the big 6 tech names rallied higher, carrying the indexes up big. The front line for the bulls pushed down field! MSFT and AMZN rallied 6%. GOOGL, AAPL and FB rallied 9% this week. NFLX showed up moving up 13.5% on the week! Wham! Tesla was only up 2.5%. They make up 50% of the Nasdaq 100 and 23% of the $SPX. Big cap tech pretty much
straight-armed the bear in the teeth and sent him rocking on his back. The XLK had the lowest SCTR ranking in almost two years, only to show up as a bull stampede this week! The list on the right shows the weeks’ top performers on the Nasdaq 100.

Last week I highlighted that analyzing the market here is tricky, because my strength indicators are plummeting, but the advance/decline lines are holding up. According to Bob Pisani, 8% of the options traded are single contract (tiny) option entries, suggesting high retail investor involvement. I listed off 11 different euphoria’s last week, and they are still there. The massive push into the top 6 names this week, shows more bullish action. Large cap tech earnings
come out over the next two weeks. Can they continue to drive higher?

Summary: I will continue to protect capital. As the SSIH drops even lower, it validates my bias, but the large-cap anchor tenants are driving higher. More importantly, if the SSIH is waffling here, there is no tailwind. That is the information we are ultimately seeking. Careful out there! Keep watching the top Nasdaq names. The indexes might not drop until they start to weaken. Tech might be the place to look as I mentioned last week, but a thin market gets more dangerous. See September 3 high.

Click below to view the entire pdf document…


ClearWater Market Commentary as of January 18th, 2021

U.S. President-elect Joe Biden announced a $1.9 trillion fiscal-stimulus plan that aims to counter the affects of COVID-19. The plan is the first of two major spending initiatives Biden will seek in the first few months of his presidency.

ClearWater Market Commentary as of January 11th, 2021

Stocks jumped to record highs after Georgia election completes Blue Wave. As the US political drama dominated the first week of 2021,

2021 Starts Huge- January 8th, 2021

The US markets were up this week but underneath the surface, there were clues of a bigger market push. Breadth swelled, bullish percent indexes climbed, transports popped, and all my strength indicators swelled. Globally, it was a launch fest with the Shanghai breaking out to 5-year highs, while Canada, Brazil and Germany confirmed the move. Asia, North and South America, as well as Europe all popping to new highs to start the year. I can’t ignore that! Say it with swagger – “When you are hitting new highs, you are
not in a bear market!”.

The US political world had a newsworthy week. The attack on the capitol building had the world watching. It did slow down the US markets compared to the rest of the world, as the global surge was remarkably big.

Bitcoin had a massive range week of 13500 points. Marijuana names had a massive week. Energy had a massive week. Financials had a massive week. I can’t find the correlation between them, but each one launched their own party. Bitcoin investors continue to believe in the limited supply approach.
Digital printing of money. Marijuana names surged as the Senate got to a 50/50 political split suggesting a possibility of passing a law for recreational consumption. The Saudi’s trimmed oil production sending energy stocks up 10%! Bond prices plummeted, kicking financials much higher.

The Schnell Strength Indexes all improved this week. We saw the median stock up 5 % on the week which is obviously huge. This broad participation suggests more to come. Whenever I see everything so bullish, I am inclined to worry. But rising markets suggest being invested. Don’t be overly aggressive, but if you find some nice setups, the majority of stocks are trending higher. There were
over 1900 up more than 5% and only 250 down 5% as an example.

Summary: I am buying a little more as the SSIH suggests. As I mentioned last week → “My larger time frames suggest this pullback is a blip, but other big caution signs loom like the lower PPO right now on the Nasdaq” . If the market wants to push higher, I want to ride it. As the sign on the cross country ski trail says “Giddy Up!”

Let’s hit the charts. Click below to view the full PDF article.


ClearWater Market Commentary as of January 4th, 2021

The holiday shortened week saw the S&P 500 set a record high on Monday as another round of U.S. unemployment benefits and stimulus checks were announced and after Trump signed a new COVID relief bill

2020 is Behind Us- January 2nd, 2021

The markets pushed up early Monday, traded sideways until Thursday afternoon. With 2 hours to go, someone put in a 2-hour buy order, pushing the markets to close in the top right corner of the charts for the day, the week and the year. The US markets closed the year at the highest levels after incurring a 35% drop in the first quarter of 2020. It has been a remarkable year as names like Peleton and Zoom soared, while main street America struggled to get past the 2019 highs.

Santa Claus Rally Needs a Sleigh- December 25th, 2020

The markets had a soft, flat week coming off options expiration. The Nasdaq closed down slightly, the $SPX down a ½%. Globally, most markets pulled back. Most commodities pulled back this week as well. Currencies were flat even though a UK-Eurozone trade deal got done. All in all, a week that consolidated all the moves up.

ClearWater Market Commentary as of December 21st, 2020

Although Canadian equities closed mixed last week, the TSX rose to a nine-month high following the fresh record highs set last week by the major U.S. indexes.

Two Get Approved- December 18th, 2020

The Pfizer vaccine rollout continues. The Moderna vaccine got approved. More vaccines are in the approval pipeline but look to be later in January. JNJ. Astrazeneca. With my strength indicators weakening and the majority of good news out about the vaccines, it seems like the market wants to pause here. Until you look at Tesla stock. The roaring 2000’s 2020’s.

Extremes are Worrying- December 11th, 2020

The trucks are now rolling out Pfizers vaccine this weekend after the FDA approved it late on Friday. That’s huge! So vaccine injections start Monday. We also have the Fed meeting Tuesday and Wednesday. Moderna’s vaccine is up for approval on Thursday December 17. But that’s not all for this week. To round out the week, we have options expiration (OE) Friday. The last 4 years, this OE has been a positive swing and the market runs into the new year. It all adds up to lots of reasons for volatility. We still have the possibility of a stimulus package.

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