“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
LEI (Conference Board via PR Newswire)
“The Conference Board Leading Economic Index® (LEI) for
the U.S. increased by 1.1 percent in November to 119.9 (2016 = 100),
following a 0.9 percent increase in October and a 0.3 percent increase in
September. "The U.S. LEI rose sharply again in November, suggesting the
current economic expansion will continue into the first half of 2022,"
said Ataman Ozyildirim, Senior Director of Economic Research at The Conference
Board. "Inflation and continuing supply chain disruptions, as well as a
resurgence of COVID-19, pose risks to GDP growth in 2022. Still, the economic
impact of these risks may be contained. The Conference Board forecasts real GDP
growth to strengthen in Q4 2021 to about 6.5 percent (annualized rate), before
moderating to a still healthy rate of 2.2 percent in Q1 2022." Press release
at...
MARKET NOT DOING WHAT IT IS SUPPOSED TO DO (Heritage
Capital)
“The stock market is supposed to be rallying now. That is
based on more than a dozen studies including the magnitude of the rally through
Thanksgiving as well as November 30...When something is “supposed” to happen
and doesn’t, or the opposite occurs, that can be a powerful sign to go with.
You already know I have my concerns heading into 2022. If stocks cannot rally,
especially the small and mid caps, into year-end, my concerns will increase.” –
Paul Schatz, President, Heritage
Capital. Commentary at...
https://investfortomorrow.com/blog/stock-market-not-doing-what-it-is-supposed-to-do/
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website as
of 7:30 PM ET 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 fell about 1.1% to 4568.
-VIX rose about 6% to 22.87.
-The yield on the 10-year Treasury slipped to 1.423%.
I noted earlier that there were no Bull signs in my
system around mid-day. That improved a little by the close. Looks like the Smart Money indicator
(late-day-action) is headed up. That
still paints a decidedly bearish picture with only 1 Bull sign and around 21
bear-signs. The short-term indicators aren’t much better.
The daily sum of 20 Indicators declined from zero to -12 today
(a positive number is bullish; negatives are bearish); the 10-day smoothed sum
that smooths the daily fluctuations declined from -18 to -20 (The trend is more
important than the actual number for the 10-day value.) 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. VIX remained bearish; Volume, Price & Sentiment are
Neutral. This indicator ensemble was
Sell at mid-day, but managed to improve to Hold at the close.
The S&P 500 closed 0.9% below its 50-dMA. That may
worry investors and bring on some more selling. I suspect the S&P 500 will
bounce higher first...perhaps tomorrow. We did get a decent close today as the
markets regained lost ground into the close.
The S&P 500 was close to testing its 1 December low
earlier in the day, but it bounced up and closed higher, so there was no test
at the close. Volume was not as high as
I had projected earlier in the day.
There was some panic in the morning. Even if the Index had closed below
its 1 Dec low, internals were much worse so a test would not have been
successful.
The pullback does not appear to be over yet. New-high
data was low at the S&P 500 all-time high.
As noted previously, that suggests a correction greater than 10%, based
on past history – of course, it’s no guarantee. Most indicators are trend
following so the trend could always change tomorrow.
I sold XLE today. I just
bought it 2 weeks ago so I am taking a loss.
I am also underwater on Apple and XLK.
They are the only stocks currently in my trading portfolio and
technology actually outperformed the S&P 500 today. Odd when technology is considered a
safe-haven. Perhaps that means a lot of
investors don’t believe this pullback is real.
I think it is...and it looks like we’ll see the Grinch rather than
Santa.
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 fell to SELL.
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 stock-allocation of 50%. I trade with about 15-20% of the total
portfolio.
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.
