V&M Breakout Morning Update - Dec 13: FED Eases Another $22.1 Billion, US-China Phase 1 Trade Deal Met With Tariffs Eased Ahead Of Deadline, Markets Soaring To Record Highs.

Dec. 13, 2019 8:18 AM ETDWSH, EDC, EDZ, FNGD, FNGU, IMOM, LABD, LABU, SH, SPXL, SPXU, SPY, SQQQ, SVXY, TNA, TQQQ, TZA, UVXY6 Comments

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Welcome! I am a Finance PhD, MBA, investment adviser, fraud examiner and certified anti-money laundering specialist with more than 30 years trading and investing stocks and other securities. I'm the founder of Value & Momentum Breakouts.

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Summary

V&M Breakout Morning Update - Dec 13: FED Eases Another $22.1 Billion, US-China Phase 1 Trade Deal Met With Tariffs Eased Ahead Of Deadline, Markets Soaring Premarket.
Sharing a December daily sample article of the members' daily update at V&M Breakouts as I do once per month.
The Momentum Gauges™ remain positive since the October 15th signal reaching high levels yesterday of positive 116 and negative 14.
The Fed eased a record $22.1 billion this week for the 8th consecutive week increasing the total amount to $118.8 billion with promises of more easing into Q1.
Seeking Alpha has approved a 20% price increase for V&M Breakouts starting January 1st, so get a free-trial and lock in the lowest rates now!

V&M Breakout Morning Update - Dec 13: FED Eases Another $22.1 Billion, US-China Phase 1 Trade Deal Met With Tariffs Eased Ahead Of Deadline, Markets Soaring Premarket.

Good morning! This is the daily morning report sample for real-time followers who may be interested in receiving the daily updates that subscribing members receive every morning. Get started now with a 2-week free trial

Value & Momentum Document Library

Premarket Index Futures

The Index futures are jumping premarket with the VIX volatility declining significantly. The positive Friday anomaly is in full effect with news of US-China trade agreement of phase-1 and release of tariff deadline Dec. 15th. Also more Fed easing and very accommodative policy to help the markets. All the major indexes are still near record highs and the Russell 2000 remains above 1600 key support level. We will be watching the Momentum Gauges™ closely after more than 8 weeks of gains in the market.

The Federal Open Market Committee meeting completed their final year-end meeting Wednesday holding fund rates unchanged. The FED SOMA page linked below shows an 8th consecutive week of easing with $22.1 billion added to the Fed's balance sheet this week. This brings the total easing to $118.8 billion in liquidity just over the past 8 weeks. Easing has been a very positive condition for the markets since the Fed started in 2009. We may continue to experience very positive effects in the large gains of the Piotroski, Premium, and Breakout portfolios.

System Open Market Account Holdings - FEDERAL RESERVE BANK of NEW YORK In the latest news from the Federal Reserve, liquidity injections are increasing rapidly and " together with the expanded overnight repos, and the $60BN in monthly TBill purchases, and by mid-January, the Fed's balance sheet, currently at $4.066 trillion, will surpass its all time high of $4.5 trillion! ". I have illustrated the changes on the chart below. We are at easing rates of change not seen since early 2013:

Average Daily Returns of the S&P 500 YTD

Fridays remain the best days of the week for the S&P 500 YTD with more than 50% of all the S&P 500 gains YTD on Fridays. Here are the average returns by days of the week on the S&P 500 YTD through Friday, Dec 6th. Studies of the MDA Weekly Breakout stocks are showing the highest gains on Fridays and a strong reason for taking advantage of the member's advance Friday notification for these weekly picks.

Daily Momentum Gauge Chart

The momentum gauges closed yesterday at 116 Positive and 14 Negative. This is the most positive level we have seen since mid-September. The daily chart below now shows a 3 month view for better clarity of recent moves, the one year daily chart is still available on the V&M Dashboard spreadsheet. The values are still quite positive from the positive October 15th signal.

The negative momentum score was approaching a key value around 30 that may give a high probability of a future crossing signal, but has declined significantly again. The most reliable signal remains the strong crossover signal with the red line moving above the green line.

The weekly momentum gauge chart is showing strong positive momentum gauge values following 8 consecutive weeks of organic quantitative easing and a record $22.1 billion in easing this past Wednesday. Indexes continue to move near record territory.

The FED positive liquidity intervention in Q3/Q4 2019 has changed dynamics greatly from last year in the same quarters. Reviewing the prior October 2018 market correction for similarities/differences may be of value to members:

Applying Market Signals For Maximizing Profit - 2018 Presentation

Evaluating the Momentum Gauges over the largest events:

These 3 Measures Forecasted Every Major Downturn Since QT Started: What's Next

New and Improved Bull/Bear ETF Trade Signal Page

The FANG+ Index for the 3x leveraged FNGU/FNGD fund is up +28.80% since the last positive buy signal on October 15th. The bull/bear ETF combination signal using the Momentum Gauges remains positive since the buy signal. The ETF Bull/Bear trade signal page has been updated to include Daily/Weekly trade signals and multiple combinations of Bull/Bear ETFs for market swing trades. More Bull/Bear combinations have been added that members have asked me to post and there is room for additional funds.

The layout allows members to trade long/short or only long or only short with any combination of funds you like even though they are paired with similar funds. This provides more flexibility in the ETF combinations you trade and track for maximum gains. I am still working the Weekly signals for a consistent signaling methodology and may also add intraday signaling tables for the fastest/noisiest signal ahead of the daily closing values.

The bull/bear ETF trading signal page now includes many more combination trades sets as promised. The gains at the start of Week 50 are listed below, the latest price gains are on the Dashboard Spreadsheet for members:

MicroSecotors FANG+ 3x Index bull/bear (FNGU)/(FNGD) +122.27%
Direxion Daily S&P 500 3x bull/bear (SPXL)/(SPXU) +97.03%
SPDR S&P 500 (SPY)/ ProShares SHort S&P 500 (SH) +29.02%
Alpha Architect Intl Momentum (IMOM)/Dorsey Wright Short (DWSH) +33.05%
ProShares UltraPro Nasdaq 3x bull/bear (TQQQ)/(SQQQ) +101.78%
Direxion Daily 3x Small Cap bull/bear (TNA)/(TZA) +127.77%
Direxion Daily 3x Biotech bull/bear (LABU)/(LABD) +118.59%
MSCI 3x Emerging Market Index bull/bear (EDC)/(EDZ) +22.33%
VIX Index 1.5x bull/bear (SVXY)/(UVXY) +91.39%

The Premium Portfolio is now up +29.68% YTD on only 36 weeks of active trading following the Momentum Gauge™ timing signals: V&M Premium Portfolio: 2019 End Of Year Report Card Through Week 49

Additional ETF bull/bear combos have been added a few more are in progress. The layout allows for any mix of bull/bear featured ETF selections when the Momentum Gauge trade signal is issued.

Top CFO Insider Buys last 10 days

The top 20 CFO buys through today show less activity in the last 10 days. The size of CFO buys are still lower than usual with many buys below $30k. Insiders are still selling at much higher levels than buying. We are well below prior weeks when the top 20 purchases were all above $100k.

Only a handful of the top CFO purchases are above the $30k cutoff level for highest significant results based on my research: CFO Trading Anomaly: Top Buys Beating S&P 500 By 28% Annualized

(SecForm4)

Top Weekly Breakout Stocks from the V&M Dashboard Spreadsheet

Top Weekly breakout stocks through the last close. These are live updating stocks that can be picked up anytime in addition to other portfolio selections. It also shows which portfolio types (value, forensic, anomalies, premium, breakouts etc) are showing stronger short term positive momentum conditions and alerts us to any momentum/value shifts. Be sure to conduct your own due diligence of these automatic selections as some have very low prices and market cap that may not be ideal for your investment preferences.

V&M Dashboard Link: V&M Premium Portfolio Dashboard

S&P 500 Intraday Technical Chart

The S&P 500 bullish stair step pattern has returned and sent the S&P 500 to new all time highs for at least the 26th time this year. The S&P 500 broke the trading range between 3,120 and 3,150 and is moving higher on strong momentum and positive news.

Watch for continuation of the pattern in the positive price channel from Oct 15th to higher highs after retests of support to the lower band of the channel.

On the daily chart of the S&P 500 below we are seeing a similar positive price channel from June. The index has declined from the top of the channel but the Momentum Gauges have not yet signalled a negative market condition as in prior peaks. Strong momentum conditions may continue as the Fed easing helps market liquidity.

Continue to keep an eye on volatility measures as the S&P 500 has had significantly below average volatility through 2019 and we remain overdue for more 1% and 2% moves in the market.

S&P 500 On Pace For Highest Returns In 60 Years With Rising Fears

Looking for any clear signals of the next short term market top is a top priority as we reach new record highs for 8 straight positive weeks on the indexes.

Earnings Scheduled this Week

Q3 Earnings Season is near the end with the majority of companies already reported.

Earnings Whisper Calendar

All the very best to you in your trading decisions!

Disclosure: I am/we are long FNGU.