“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
ADP EMPLOYMENT CHANGE (ADP via prnewswire)
“Private sector employment increased by 568,000 jobs from
August to September according to the September ADP® National Employment ReportTM..."The labor
market recovery continues to make progress despite a marked slowdown from the
748,000 job pace in the second quarter," said Nela
Richardson, chief economist, ADP. "Leisure and hospitality remains
one of the biggest beneficiaries to the recovery, yet hiring is still heavily
impacted by the trajectory of the pandemic, especially for small firms.” Press
release at...
EIA CRUDE OIL INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those
in the Strategic Petroleum Reserve) increased by 2.3 million barrels from the
previous week. At 420.9 million barrels, U.S. crude oil inventories are about
7% below the five year average for this time of year.” Report at
https://ir.eia.gov/wpsr/wpsrsummary.pdf
BEARS GAIN CONTROL (RIA)
“With the market pushing well into 2-standard deviations
below the 50-dma, we expect a counter-trend rally. However, for now, those
rallies should likely get used to “sell into,” rather than trying
to “buy the dip.”...While short-term indicators got oversold, longer-term
indicators did not. The dichotomy of these different indicators supports
the idea of a rally short-term (days to a couple of weeks) but a more
significant correction ahead.”
Commentary at...
https://realinvestmentadvice.com/technically-speaking-bears-gain-control-as-market-fails-resistance/
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website as
of 5:30 PM Wednesday. 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.
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 rose about 0.4% to 4364.
-VIX fell about 1% to 21.00.
-The yield on the 10-year Treasury slipped to 1.524%.
My “definition” of a pullback is when the 50-day percentage
of issues advancing on the NYSE is below 50% for 3 days. As of today, we have that condition again.
While I am still stuck with the possibility that the correction has ended,
today’s internals were weak. Only 46% of issues advanced; only 41% of the volume
was up-volume; and there were 32 new-highs vs 95 new-lows. Those numbers don’t
impress me. I am not ready to buy back yet.
The daily sum of 20 Indicators declined from +2 to -5 (a
positive number is bullish; negatives are bearish); the 10-day smoothed sum
that smooths the daily fluctuations declined from -32 to -34 (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. VIX is bearish; Volume, Price & Sentiment
indicators are neutral.
Still watching the market
action/indicators.
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
WEDNESDAY MARKET INTERNALS
(NYSE DATA)
Market Internals declined to NEUTRAL 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 in the
portfolio is now about 45% invested in stocks; this is below my “normal” fully
invested allocation of 50%.
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.
