“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
The U.S. economy added more jobs than expected in October even as the Federal Reserve pressed on with the central bank's most aggressive monetary tightening campaign in decades.
-Non-farm payrolls: +261,000 vs. +195,000 expected
-Unemployment rate: 3.7% vs. 3.6% expected
-Average hourly earnings, month-over-month: +0.4% vs. +0.3% expected
-Average hourly earnings, year-over-year: +4.7% vs. +4.7% expected
https://finance.yahoo.com/news/october-jobs-report-november-4-2022-202231255.html
“I thought June 16th was the low...That turned out not to be the case...We’re in a bottoming process, but I do think the bottom is in. The market has discounted what the FED is going to do...I agree with Jim Bullard; they are going to do 75-basis points (hike) in December and stop there...5% is already in the market...The market reaction has not been much this week given all the hawkish talk from Powell...The economy is in a rolling recession.” Ed Yardeni, Phd, President, Yardeni Research. Paraphrased from a CNBC interview 11/4/2022.
To Ed’s point, here are other dovish FED governors suggesting slower rate hikes as noted below.
“Two Federal Reserve officials indicated Friday that they expect further interest rate increases but will be looking closely at whether those moves need to be as aggressive as they’ve been this year. Regional president Thomas Barkin of Richmond and Susan Collins separately said that the Fed is moving into a new phase that will be examining how much more restrictive policy needs to be.” Story at...
https://www.cnbc.com/2022/11/04/fed-officials-barkin-and-collins-see-possibility-for-slower-rate-hikes-ahead.html
-Friday the S&P 500 rose about 1.4% to 3771.
-VIX dipped about 3% to 24.55.
-The yield on the 10-year Treasury rose to 4.164%.
-Drop from Top: 21.4% as of today. 25.4% max (on a closing basis).
-Trading Days since Top: 212-days.
The S&P 500 is 7.9% Below its 200-dMA & 0.9% BELOW its 50-dMA.
*I won’t call the correction over until the S&P 500 makes a new-high; however, evidence suggests the bottom was / is in the 3600 area and I am fully invested with a higher percentage of stocks than normal.
XLI – Industrial ETF
QLD – 2x Nas 100
DDM – 2x Dow 30
XLK – Technology ETF
Patience...I have held trading positions while watching markets. Today, I feel a little better with that decision.
-The 10-dMA percentage of issues advancing on the NYSE (Breadth) is above 50%.
-MACD of S&P 500 price made a bullish crossover 13 Oct.
-MACD of the percentage of issues advancing on the NYSE (breadth) made a bullish crossover 26 Oct.
-The 52-week, New-high/new-low ratio improved by 3.5 standard deviations. More simply, the spread between new-highs and new-lows improved by 716 on 14 October. That’s another solid bottom sign at a retest.
-Issues advancing on the NYSE (Breadth) compared to the S&P 500 are bullish. (Breadth is ahead of the Index.)
-Short-term new-high/new-low data.
-Long-term new-high/new-low data.
-McClellan Oscillator.
-Smoothed Buying Pressure minus Selling Pressure is rising.
-On average, the size of up-moves has been larger than the size of down-moves over the last month.
-21 Oct was a Bullish Outside Reversal Day.
-Cyclical Industrials (XLI-ETF) are outpacing the S&P 500.
-17 and 18 Oct were back-to-back 80%+ up-volume days.
-Slope of the 40-dMA of New-highs is rising.
-S&P 500 is outperforming the Utilities (XLU).
-62% of the 15-ETFs that I track have been up over the last 10-days.
-Sentiment.
-There have been 2 Distribution Days 31 Oct and 2 Nov. Not enough to give a signal.
-Overbought/Oversold Index (Advance/Decline Ratio).
-The longer-term, 50-dEMA, Fosback Hi-Low Logic Index is neutral.
-The 5-10-20 Timer System is HOLD; the 5-dEMA and 10-dEMA are not both above the 20-dEMA. (The 5-day is below the 10-day so short-term momentum is bearish.)
-There have been 8 up-days over the last 20 sessions.
-There have been 4 up-days over the last 10 sessions – neutral.
-There have been 4 Statistically-Significant days (big moves in price-volume) in the last 15-days.
-The S&P 500 is 7.9% below its 200-dMA. (Bull indicator is 12% below the 200-day, although this is based on “normal” pullbacks.)
-Bollinger Bands.
-RSI
-VIX indicator.
-The graph of the 100-day Count (the 100-day sum of up-days) is flat.
-The Calm-before-the-Storm/Panic Indicator warned on 13 September - expired.
-There was an Inverse Zweig Breadth Collapse (negative Breadth Thrust) 21 June. That’s a rare, very-bearish sign, but it was several-weeks ago - expired.
-There was a Hindenburg Omen signal 8 April – expired.
-2.8% of all issues traded on the NYSE made new, 52-week highs when the S&P 500 made a new all-time-high, 3 January. (There is no bullish signal for this indicator.) This indicated that the advance was too narrow and a correction was likely to be >10%. – It proved correct, but is now Expired
-The Smart Money (late-day action) is flat.
-The short-term, 10-day, Fosback Hi-Low Logic Index.
-The 50-dMA percentage of issues advancing on the NYSE (Breadth) is below 50.
-The 100-dMA percentage of issues advancing on the NYSE (Breadth) is below 50%
-The 50-dMA percentage of issues advancing on the NYSE (Breadth) has been below 50%, for 3 days in a row below 50% for my “correction-now” signal. – It hardly matters now.
-The smoothed advancing volume on the NYSE is falling.
-My Money Trend indicator turned down.
BEST ETFs - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily)
ETF ranking follows:
The top ranked ETF receives 100%. The rest are then ranked based on their momentum relative to the leading ETF.
http://navigatethestockmarket.blogspot.com/p/exchange-traded-funds-etf-ranking.html
DOW 30 momentum ranking follows:
For more details, see NTSM Page at…
https://navigatethestockmarket.blogspot.com/p/a-system-for-trading-dow-30-stocks-my_8.html
(Market Internals are a decent trend-following analysis of current market action, but should not be used alone for short term trading. They are most useful when they diverge from the Index.)
