“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
Black Lives Matter is still standing with Jussie Smollett
after the actor was convicted Thursday of staging a racist, homophobic attack
and lying to police about it:
“It’s not about a trial or a verdict decided in a white
supremacist charade, it’s about how we treat our community when corrupt
systems are working to devalue their lives.” – BLM.
My cmt: Our system of justice is a “white supremacist
charade?” Our country consists of “corrupt systems...working to devalue [black]
lives?” Black lives do matter, but the evidence suggests the BLM organization
is a subversive organization whose goal is to undermine the United States. As
has been previously reported, the Russian’s are actively trying to divide us by
race. HHhhmmmmmmm.....
FUEL FOR A YEAR END RALLY (YahooFinance)
“...the strong technicals combined with the favorable
seasonality and extremely negative sentiment could be the fuel needed for a
year-end rally. As far as 2022 goes, we’ll worry about that next year.”
Commentary at...
BofA ANALYST SAYS SELL (msn.com)
“The stock market's recovery rally over the past week
represents an opportunity for investors to sell ahead of an upcoming Fed
interest rate "shock," Bank of America's Michael Hartnett said in a
Friday note. Hartnett recommends investors "sell the rip" rather than
"buy the dip" in stocks as interest rate hikes are about to rock Wall
Street, and amid a strikingly similar unwind in tech stocks compared to the
dot-com bubble in 2000.”
My cmt: Mr Harnett bases his analysis on the assumption
that the Fed will raise rates at the upcoming Fed meeting this week. I think the odds of that happening are near
zero, but we could have some shakiness this week do to Fed angst by investors.
PANIC SELLING TO PANIC BUYING IN ONE WEEK (Real Investment Advice)
“The panic buying rally [last week] improved...breadth
moderately but remains
weak relative to a market close to all-time highs...the breadth
improvement suggests the rally has some room to run. As noted by Sentiment Trader: ‘The number of S&P 500 members above the
10-day moving average increased from 5% to 89% in only 5 sessions. That’s the
quickest reversal since last October’... While we are
increasing exposure to equities in portfolios, we do so with very tight risk
parameters.” Commentary at...
https://realinvestmentadvice.com/panic-selling-to-panic-buying-in-one-week/
CBO SAYS BUILD BACK BETTER WILL ADD 3 TRILLION TO THE
DEFICIT (MishTalk)
“What If
the Build Back Better Programs Don't Expire?...The
Congressional Budget Office and the staff of the Joint Committee on Taxation
project that a version of the bill modified as you have specified [programs
don’t expire] would increase the deficit by $3.0 trillion over the 2022–2031
period.” Commentary at...
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website as
of 5:00 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 fell about 0.9% to 4669.
-VIX rose about 9% to 20.31.
-The yield on the 10-year Treasury dipped to 1.414%.
Fed meeting this week; Omicron; inflation....pick your
poison. There are plenty of things to worry investors. Internals were weak and
the close was ugly as the S&P 500 dropped 20 points in the final 15 minutes
of trading. Even Apple dropped 2%, almost all of it in the final hour.
There was a Hindenburg Omen today, mainly because both
new-highs and new-lows are elevated (89 new-lows/120 new-highs) (89 New-highs/120 New-lows). That’s not a good sign, but it is not near triggering
a bearish signal on the Fosback New-high/New-low Logic Index. Fosback’s indicator has a better record for
accurate calls than the Hindenburg. Still, it is cause for concern.
The VIX indicator turned bearish. That has been a pretty good indicator over
the years. There were other bear signs, but it is too early to panic. For the
most part, indicators were bullish this past Friday. As we noted then, the
Friday run-down of some important indicators turned to the Bull side (8-bear
and 12-bull) and was considerably more bullish than last Friday.
While the recent action seemed overly bullish and headed
for a blow-off top (eventually) the top indicators were not calling for a top
on Friday. The top indicators are designed
to recognize overly bullish conditions, but neither Bollinger Bands nor RSI were
overbought Friday. For that matter, the only top-indicator that flashed a warning
was the Index vs Breadth spread.
Today, the daily sum of 20 Indicators slipped from -1 to
-5 (a positive number is bullish; negatives are bearish); the 10-day smoothed
sum that smooths the daily fluctuations improved from -87 to -78 (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 turned bearish: Volume, Price & Sentiment are
Neutral.
I am cautiously bullish. I’ll be surprised if the Santa rally is over,
but it is possible. We may have to wait until after the Fed meeting ends on Wednesday
to sort things out.
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
40-DAY GAIN
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
40-DAY GAIN
MONDAY MARKET INTERNALS (NYSE
DATA)
Market Internals remained HOLD.
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 65% invested in stocks; this is above my “normal” fully
invested stock-allocation of 50%. I’ll hold that position until I see first
signs of weakness. The goal here is to use cash for short-term gains and then
return to cash with 50% invested in stocks.
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.
