Stock Market Early Morning Insights – December 21, 2016

I am doing my Insider Club Webinar this afternoon to review some of the potential trades I have looked out over the last month. I hope to see many of you online. The Roundtable will also be an introductory discussion of HGSI features for trial users, and those who are new to HGSI.

Ron Brown Insider Club Webinar Wednesday, December 21, 2016 at 4:30 PM EST  REGISTER NOW!

The Dow Jones Industrial Average attempted to close above 20,000, but came up just short. There is no doubt that it will get about

20,000 soon, but we need to remember that the Dow is made up of only 30 stocks, and those stocks are changed occasionally to make sure that some of the most favorable stocks are contained in the index. Rising indexes attract more money to the markets, and of course, that is what the financial industry wants. More activity means more money to manage, and more commissions. The wealth effect from a rising stock market encourages individuals to spend more which helps the economy. Eventually, most investable money is in the market, and there is little buying power left, so we cannot get complacent.

Yesterday, the Steel stocks showed new life and are well represented in the top 50 GIR. Airlines, Banks, and Semiconductor Devices continued to show strength. Banks remain the dominant group.

The VIX fell even lower yesterday as traders see little need for downside protection. I mentioned above that to get complacent, but that is exactly what is happening as shown by the VIX.

Yesterday was a strong day for the broader markets with the NASDAQ closing at a new high. Internals were strong. The data provider did not send the volume and the internals data for the NASDAQ Composite, but I am sure that will be fixed soon. I substituted in HGSI chart of the all NASDAQ index which shows both volume, advancing versus declining issues, and new highs versus new lows. This is another great aspect of HGSI; we can obtain internals information about any computed index.

The S&P 400 mid-cap in the S&P 600 small-cap indexes were strong, and look like they will challenge their former highs. This is not a given, and at some point, the indexes will back off, but fund managers and institutions want this year to have a strong finish. Since no one knows where the markets will eventually go, all we can do is participate and manage our risk.

It has been gratifying for me to receive letters from HGSI users who have participated in my webinars, and are now making successful trades. Stock and ETF selection is very important, but risk control is even more important.  When we are wrong we have a predefined exit point, and trading is much less stressful.

Ron

STOCK MARKET EARLY MORNING INSIGHTS

Stock Market Early Morning Insights is a product of Ron Brown Investing. The complete report and all the charts are produced daily before the market opens and distributed by email to subscribers. Reports published on the HGSI Blog are delayed and do not contain all the charts.  For more information about subscribing use this link. MORE INFO