Stocks Find Some Footing After 5-Day Losing Streak

December 09, 2022

From the desk of Vance Howard:

The HCM-BuyLine® is still above the short and intermediate-term trend. In other words, some risk should be taken at this time. We have been carefully adding to positions and buying new ones on pullbacks. We are still holding a lot of cash, and the longer-term trend is still negative. The S&P 500 came awfully close to closing multiple days above the 200-day moving average, which would have been positive for stocks, but has since pulled back below it. Equities sold off sharply to start this week with a 2% decline. Nobody needs a reminder that investors remain hypersensitive to “hot” economic data because this pushes the Fed towards “higher for longer” and the strong Nov ISM Services falls into that category.

A couple of stocks that are looking interesting are (CVX) Chevron, (AMGN) Amgen and a real-estate equity Crown Castle (CCI).

Initial claims for unemployment insurance picked up 4,000 last week to 230,000, matching the consensus. While claims have been choppy around the Thanksgiving holiday, their four-week average has barely budged, up 1,000 in the latest week to 230,000. It has picked up from its cycle trough last spring but is only modestly above the pre-recession level of around 200,000. Amid an increasing number of industry reports of layoffs in the tech sector, the subdued trend in initial claims indicates that labor demand, in aggregate, remains solid.

Vance Howard

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