“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
JOBLESS CLAIMS (AP News)
“Slightly fewer Americans applied for jobless claims last week, further indicating that the labor market remains strong in an era of high interest rates. Applications for unemployment benefits fell by 3,000 to 217,000 for the week ending Nov. 4...” Story at...
https://apnews.com/article/unemployment-benefits-jobless-claims-layoffs-labor36bf05edcb68f929b1d7c2f5ad06ebf9
“The Federal Open Market Committee is committed to
achieving a stance of monetary policy that is sufficiently restrictive to bring
inflation down to 2 percent over time; we are not confident that we have
achieved such a stance.” - Jerome Powell, Federal Reserve Chairman
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 fell about 0.9% to 4347.
-VIX rose about 6% to 15.3.
-The yield on the 10-year Treasury rose to 4.634%.
PULLBACK DATA:
-Drop from Top: 9.4%. 25.4% max (on a closing basis).
-Trading Days since Top: 466-days.
The S&P 500 is 2.2% ABOVE its 200-dMA and 0.2% ABOVE its 50-dMA.
*I won’t call the correction over until the S&P 500 makes a new-high; however, evidence suggests the major bear-market bottom (25% decline) was in the 3600 area and we called a buy on 4 October 2022.
MY TRADING POSITIONS:
XLK – Technology ETF (holding since the October 2022 lows).
XLY - Consumer Discretionary ETF. (Holding since the October 2022 lows - I bought more XLY Monday, 8/21.)
I took profits and then reestablished positions as follows:
SPY – I bought a large position in the S&P 500 Friday, 8/14, in my 401k (it has limited choices).
XLE – Added Tuesday, 8/22.
SSO – 2x S&P 500 ETF. Added 8/24.
CSCO – added 9/5.
TODAY’S COMMENT:
Finally, there was a down day for the S&P 500. There were some bearish signs too. Thursday was a Bearish outside reversal day. Stock charts says an outside reversal day is:
“A two-day chart pattern that can indicate a reversal in trend. Like with outside days, the second day's high must be above the previous day's high, while the low must be below the previous day's low. In addition, the second day must close in the opposite direction of the previous trend (e.g. in an uptrend, the second day must close down).” From...
https://school.stockcharts.com/doku.php?id=glossary_o#:~:text=Outside%20Reversal%20Day,below%20the%20previous%20day's%20low.
“Slightly fewer Americans applied for jobless claims last week, further indicating that the labor market remains strong in an era of high interest rates. Applications for unemployment benefits fell by 3,000 to 217,000 for the week ending Nov. 4...” Story at...
https://apnews.com/article/unemployment-benefits-jobless-claims-layoffs-labor36bf05edcb68f929b1d7c2f5ad06ebf9
-Thursday the S&P 500 fell about 0.9% to 4347.
-VIX rose about 6% to 15.3.
-The yield on the 10-year Treasury rose to 4.634%.
-Drop from Top: 9.4%. 25.4% max (on a closing basis).
-Trading Days since Top: 466-days.
The S&P 500 is 2.2% ABOVE its 200-dMA and 0.2% ABOVE its 50-dMA.
*I won’t call the correction over until the S&P 500 makes a new-high; however, evidence suggests the major bear-market bottom (25% decline) was in the 3600 area and we called a buy on 4 October 2022.
XLK – Technology ETF (holding since the October 2022 lows).
XLY - Consumer Discretionary ETF. (Holding since the October 2022 lows - I bought more XLY Monday, 8/21.)
I took profits and then reestablished positions as follows:
SPY – I bought a large position in the S&P 500 Friday, 8/14, in my 401k (it has limited choices).
XLE – Added Tuesday, 8/22.
SSO – 2x S&P 500 ETF. Added 8/24.
CSCO – added 9/5.
Finally, there was a down day for the S&P 500. There were some bearish signs too. Thursday was a Bearish outside reversal day. Stock charts says an outside reversal day is:
“A two-day chart pattern that can indicate a reversal in trend. Like with outside days, the second day's high must be above the previous day's high, while the low must be below the previous day's low. In addition, the second day must close in the opposite direction of the previous trend (e.g. in an uptrend, the second day must close down).” From...
https://school.stockcharts.com/doku.php?id=glossary_o#:~:text=Outside%20Reversal%20Day,below%20the%20previous%20day's%20low.
The last time there was an outside reversal day the Index
traded down roughly 5% to the lower trend line.
That’s a possibility now, but I don’t expect the Index to fall that far
and even if it did, the trend should remain higher overall. I think we are done
correcting for a while. The strong move higher over the last 2 weeks showed
that a lot of investors have FOMO, fear of missing out.
I remain bullish.
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.
*For additional background on the ETF ranking system see NTSM Page at…
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
My basket of Market Internals remained HOLD. (My basket of Market Internals is 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.)
