“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
JOBLESS CLAIMS (FOXBusiness)
“The number of Americans filing first-time jobless claims last
week dipped to the lowest level since the COVID-19 outbreak.
The Labor Department said Thursday that 310,000 Americans filed for first-time
unemployment benefits in the week ended Sept. 4, a decrease of 35,000 from the
previous week.” Story at...
https://www.foxbusiness.com/economy/initial-jobless-claims-pandemic-era-low-september-4
EIA CRUDE INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those
in the Strategic Petroleum Reserve) decreased by 1.5 million barrels from the
previous week. At 423.9 million barrels, U.S. crude oil inventories are about
6% below the five year average for this time of year.” Report at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf
FED PRESIDENT KAPLAN TO SUPPORT TAPERING PLAN
ANNOUNCEMENT LATER THIS MONTH (MarketWatch)
“Dallas Fed President Robert Kaplan said Wednesday he
expects to advocate that the Fed announce a plan to slow down its $120 billion
per month of asset purchases “sooner rather than later,” despite the
disappointing August jobs report.” Story at...
WHAT HAPPENS IF THE DEBT LIMIT ISN’T RAISED? (CNN)
“...a default would be an economic cataclysm. Interest rates would spike, the stock
market would crater, retirement accounts would take a beating, the value of the
US dollar would..."It would be financial Armageddon," Mark Zandi,
chief economist at Moody's Analytics, told CNN. "It's complete craziness
to even contemplate the idea of not paying our debt on time." Story at...
https://www.cnn.com/2021/09/08/business/debt-ceiling-default-explained/index.html
INVESTORS ARE IGNORING PARALLELS BETWEEN STOCKS TODAY AND
‘HEADY’ YEARS OF 1929, 1999 AND 2007 (MarketWatch)
“Matt Maley, chief market strategist at Miller Tabak
& Co...said he’s not predicting a pullback similar to those big years, and
timing of any pullback is obvious tough. “However, it is our opinion that the
risk side of the risk/reward equation has grown substantially over the past
several months…and therefore, we believe that investors should raise a little
cash at these levels,” he said. “If/when this ‘everything rally’ ends, most
everything will decline. Therefore, (at least) some cash will be one of
the few hedges that investors will find successful if/when the market
corrects,” said Maley.
3 MAJOR COMPANIES JUST FIRED A WARNING SHOT AT THE BULLS
(YahooFinance)
“Fresh financial warnings from several well-known
companies call into question ongoing pandemic challenges (such as supply chain bottlenecks,
inflation and volatile consumer demand) that the bulls probably forgot about
during the summer march higher in stock prices. And perhaps those bulls will be
reminded of their forgetfulness in the way of a short-term pullback in stock
prices.” Story at...
FRENCH WINEMAKERS FACE DEVSTATION (CNN)
“One of France's biggest export industries is facing a
devastating blow after an unusually severe frost earlier this month damaged
vineyards across the country, heaping pain on winemakers already reeling
from the pandemic and US tariffs. The frost has affected 80% of vineyards in
France's primary wine growing areas...” Story at...
https://www.cnn.com/2021/04/14/business/france-wine-production-losses/index.html
My cmt: While Global Warming is causing heat in the west
and flooding rains in the Northeast (according to Biden), it is causing
freezing weather in France and record cold in South America. South America. See
https://watchers.news/2021/07/01/unprecedented-cold-and-record-snow-engulf-parts-of-south-america/
How can warming cause freezing? The same way that hotter
weather increases the humidity in the atmosphere, causing more flooding in NJ,
but decreases humidity in the atmosphere causing drought in CA.
When I attended the National Hurricane conference in
Norfolk 25 years ago, NOAA representatives were arguing that Global Warming was
causing less hurricanes, because there were fewer hurricanes in previous
years. We’ve had more hurricanes in recent years, so now Global Warming causes more
hurricanes!
I’m sorry, but a most of this Global Warming crap doesn’t
make any sense. The planet is a degree or two warmer – this isn’t Armageddon. Further,
the US has been doing its part.
US carbon dioxide emissions peaked at 22.5 metric tons in
1973. It has dropped more than 30% since
then. China increased by 600% over the same time frame. China CO2 emissions
doubled in the last 20 years while the US declined. More costs placed on US
businesses (by converting to no-carbon energy sources), will mean more work
will migrate overseas and the planet is no better off. The US share of CO2 emissions
is not large enough to make a difference.
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website as
of 5:00 PM Thursday. U.S. total case numbers are on the left axis; daily
numbers are on the right side of the graph in Red with the 10-dMA of daily
numbers in Green.
I added the smoothed 10-dMA of new cases (in purple) to
the chart. One can see it is slightly off its peak, so perhaps we have seen the
worst of the Delta-variant. I suspect we may see another peak as Delta moves to
other areas – hope I am wrong.
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 was down about 0.5% to 4493.
-VIX rose about 5% to 18.80.
-The yield on the 10-year Treasury slipped to 1.303%.
Today’s report is similar to yesterday, but indicators
have gotten a little worse...
Today, the 50-dMA of issues advancing on the NYSE was
below 50% for the 3rd day in a row. My “definition” of correction is when the
50-dMA of advancing issues is less than 50% for 3 consecutive days. This signal
warned 17-26 August and we didn’t see a correction then, but this is a
follow-on to that weakness and suggests that we may actually see a pullback now.
The 10-dMA of issues advancing on the NYSE also remained
below 50% today and fell a bit further suggesting the trend is down.
As noted yesterday, the 40-dMA of new-highs is also
suggesting a downtrend is in play.
MACD of S&P 500 price had a bearish crossover today.
The daily sum of 20 Indicators slipped from -7 to -10 (a
positive number is bullish; negatives are bearish); the 10-day smoothed sum
that smooths the daily fluctuations declined from -9 to -15. (These numbers
sometimes change after I post the blog based on data that comes in late.) Most
of these indicators are short-term and many are trend following.
The Long Term NTSM indicator
ensemble remained HOLD. Volume, Price, VIX & Sentiment indicators are
neutral.
Looks like correction time is
here. Will it happen? The trend looks like it, but we’ll have to wait and see. With
the FED’s QE still in play, corrections have been few and far between.
MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs
(Ranked Daily)
The top ranked ETF receives
100%. The rest are then ranked based on their momentum relative to the leading
ETF.
*For additional background on
the ETF ranking system see NTSM Page at…
http://navigatethestockmarket.blogspot.com/p/exchange-traded-funds-etf-ranking.html
TODAY’S RANKING OF THE DOW 30
STOCKS (Ranked Daily)
Here’s the revised DOW 30 and
its momentum analysis. The top ranked stock receives 100%. The rest are then
ranked based on their momentum relative to the leading stock.
For more details, see NTSM
Page at…
https://navigatethestockmarket.blogspot.com/p/a-system-for-trading-dow-30-stocks-my_8.html
THURSDAY MARKET INTERNALS
(NYSE DATA)
Market Internals declined to BEARISH on the market.
Market Internals are a decent
trend-following analysis of current market action, but should not be used alone
for short term trading. They are usually right, but they are often late. They are most useful when they diverge from
the Index.
My stock-allocation is now about
50% invested in stocks; this is my “normal” fully invested allocation.
You may wish to have a higher
or lower % invested in stocks depending on your risk tolerance. 50% is a
conservative position that I consider fully invested for most retirees.
As a general rule, some
suggest that the % of portfolio invested in the stock market should be one’s
age subtracted from 100. So a 30 year
old person would have 70% of the portfolio in stocks, stock mutual funds and/or
stock ETFs. That’s ok, but for older
investors, I usually don’t recommend keeping less than 50% invested in stocks
(as a fully invested position) since most people need some growth in the
portfolio to keep up with inflation.
