“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
“In a tinderbox situation like this one [Rittenhouse
Trial], it was reckless beyond belief for analysts to tell audiences
Rittenhouse was a murderer when many if not most of them had a good idea he
would be acquitted. But that’s exactly what most outlets did.” - Matt Taibbi
and Matt Orfalea
"Opinion is the lowest form of human
knowledge. It requires no accountability, no understanding. The highest form of
knowledge is empathy, for it requires us to suspend our egos and live in
another’s world. It requires profound purpose larger than the self." - Bill Bullard, based on a quote by George Eliot.
EXISTING HOME SALES (YahooFinance/Reuters)
“U.S. home sales unexpectedly rose in October, but higher
prices amid tight supply remain a challenge for first-time buyers.
Existing home sales rose 0.8% to a seasonally adjusted
annual rate of 6.34 million units last month...” Story at...
https://finance.yahoo.com/news/u-existing-home-sales-unexpectedly-150000991.html
my cmt: Sales were up month to month but were down 5.8%
compared to last year.
BIDEN PICKS POWELL (CNBC)
“President Joe Biden announced Monday that he is
renominating Jerome Powell for a second term as Federal Reserve chair and will
put forth Fed Governor Lael Brainard as vice chairman.” Story at...
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website as of 6:00 PM Monday. 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
-Monday the S&P 500 slipped about 0.3% to 4683.
-VIX jumped about 7% to 19.17.
-The yield on the 10-year Treasury rose to 1.63%.
Markets swooned lower today in late-day action as the
S&P 500 fell from a 0.75% gain (in the morning) to a 0.3% loss at the close.
The Index closed at its low for the day, a bearish sign, especially given the
bearish numbers we noted Friday.
The Friday run-down of some important indicators reversed
sharply to the bear side (15-bear and 5-bull) compared to the prior week. These
indicators tend to be somewhat longer-term indicators than the ones I report on
each day
There is 1 topping indicator issuing a warning: Breadth
(issues advancing) on the NYSE vs. the S&P 500 shows bearish divergence.
The daily sum of 20 Indicators remained -12 (a positive
number is bullish; negatives are bearish); the 10-day smoothed sum that smooths
the daily fluctuations declined from -30 to -44 (These numbers sometimes change
after I post the blog based on data that comes in late.) Most of these
indicators are short-term so they tend to bounce around a lot.
The Long Term NTSM indicator ensemble
remained HOLD. Price is bullish; VIX, Volume & Sentiment are neutral.
Still looks like markets are
in a pullback. I think it should be relatively small, but at least one
indicator is warning that may not be the case. If investors start worrying
about inflation and/or new Covid data, markets could get rattled. (Remember:
Trade what you see (indicators) not what you think.)
I am bearish in the short-term
based on today’s indicator run-down. In the long-term, it seems unlikely that a
major crash is coming soon, but it is not impossible.
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
MONDAY MARKET INTERNALS (NYSE
DATA)
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.
I did take profits in the Energy
ETF (XLE) and Salesforce (CRM) as I indicated Thursday. This has temporarily dropped my stock
allocation. I’ll be a buyer as soon as
we can see an end to the current weakness in indicators.
My stock-allocation in the
portfolio is now about 35% invested in stocks; this is well my “normal” fully
invested stock-allocation and is probably overly conservative.
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.
