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The Triumphant Core Four

NYSE Internals
Moving Averages
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Investor Sentiment

Special Bulletin: Jan 12, 2023 (10am Update)


Up, Up, and Away?

The recent rally phase that was confirmed on the 6th is continuing. The action in the stock market’s internals has improved to the point of an upgrade in our Current Market Outlook to a green condition.

While this is good news for the bulls/long-term investors and needs to be considered, the signal is early (that’s one of the things our C.M.O. is good at!) and subject to change based on future technical readings. But for now, the math of the market suggests the institutions (the elephants) are only tip-toeing back and not stampeding in just yet (see this for more on “Wall Street’s big elephants”).

Our Current Market Outlook has been upgraded to “Market in an Uptrend” with a green light as of 10am this morning with the S&P500 at 3,950.58. Our “Core Four” (see top of page) has improved to 3 green lights and 1 red light. That created a statistical tie (2 yellow & 2 green) which the VIX broke and pushed to a favorable green signal.

A few days ago we wrote, “New lows have contracted and the major indexes are in position to overtake key moving averages- institutional footprints are beginning to improve.” More good news! That observation of key technicals has come to pass and is actually trying to strengthen.

In the same post from the 6th, we stated, “If a new growth phase is dawning, it will take weeks to really get going and it would likely yield many opportunities for patient and wise investors. The key will be for the major indexes to rise over their 50-day mav’s and to hold that level. In the event that an official “follow-through” signal happens today, it will then be imperative that no distribution days develop in the first 3 days after the follow-through day confirmation.” Let’s now see if the “new growth phase” is real and keeps building. Regarding the 50-day mav’s, that comment is just as important today – it must hold. Positively, the market did confirm a “follow-through” day on the 6th and did NOT experience any distribution (serious professional selling) in the 3 days after it. A good start to a new year.

The Fed’s interest rate hikes continue to be a serious headwind for growth stocks and the general stock market indexes, but inflation is moderating. The recent attempt for support at the S&P 500’s 50-day moving average has held, so far. While the market is not out of the woods just yet and another down wave could emerge, the technical internals have improved revealing initial institutional accumulation. Remember, the economy is still facing a difficult environment due to higher interest rates but the stock market is always looking into the future.

Also, keep in mind that much damage has been done technically to stocks and physiologically to investors during the bear market over the past 18 months. It will take time to heal. One can probably expect a sideways/choppy stock market environment for much of this year. If current conditions fail to improve and grow for here, our discipline will catch that early and cause our outlook to be downgraded quickly. Stay tuned!

Game plan: Continue deploying capital in the strongest areas on your watch list- but remain cautious and alert. Watch to see if the S&P 500 can find support at its 50-day mav on pullbacks. Prepare for the earning season onslaught kicking off tomorrow!

Happy new year again, and welcome 2023! Praise Jesus for another year!

Note: You can learn more about The Triumphant Core Four risk management system by clicking here.

Have a Triumphant day! ® 

The information in this article is based on data obtained from recognized services and sources and is believed to be reliable. Any opinions, projections or recommendations in this report are subject to change without notice and are not intended as individual investment advice. Not to be used as legal or tax advice. ©2023 Triumphant Portfolio Management, LLC.

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