After on Tuesday the API accelerated the price slide that
began last week with an estimated crude oil inventory build of 7.83
million barrels, the EIA added fuel to the bearishness
by reporting a
build in inventories of 5.8 million barrels for the week to November 12. The
authority also reported gasoline inventories went up by 1.9 million barrels
last week…” Story at…
THREE INDEXES (Advisor Perspectives)
Chart from…
TOTAL RETURN ROLLERCOASTER (Advisor Perspectives)
“Imagine that five years ago you invested $10,000 in the
S&P 500. How much would it be worth today, with dividends reinvested but
adjusted for inflation? The purchasing power of your investment has increased
to $16,903 for an annualized real return of 10.54%. Had we posed the same question in March 2009,
the answer would have been a depressing $6,654. The -8.12% real return would
have cut the purchasing power of your initial investment by a third…as many
households have discovered during the 21st century so far, investing in
equities carries substantial risk. Households approaching retirement should
understand this risk and make rational decisions about diversification.”
Commentary at…
TECHNICALLY SPEAKING: ELECTION DAY (Real Investment Advice)
“…the markets are sending a pretty clear message that
the “tenor” is changing from bullish to bearish. The failure
of the market to break out of the current trading range this past couple of
weeks sets investors up for disappointment. It is critically important the
market does not violate the trading range lows on a weekly closing basis. More
importantly, there is a tremendous amount of overhead resistance at play at the
2750-2775 level as both previous rally peaks and the long-term moving average are
now coinciding… we will continue sitting in a bit more defensive position until
the election passes and we can assess both the outcome and the probabilities of
what happens next.” Lance Roberts. Commentary at…
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 rose about 2.1% to 2814. (Wall
St. always likes divided Government.)
-VIX dropped about 18% to 16.36.
-The yield on the 10-year Treasury was little changed at
3.226% as of 4:42 pm.
Volume was very close to the monthly average, so there
was a lot of participation on today’s move up.
We finally have a positive spread in the 52-week,
new-high/new-low data. New highs
outpaced lows 80 to 52. That’s a nice bullish sign, though I am still worried
that a retreat to the recent low may be required as a retest. We did break some
resistance zones.
It appears to me that the Index broke back above the long-term
trend line from Feb 2016 and that’s a good sign, though it does depend on the
scale one uses to draw these lines. The S&P 500 also closed 1.8% above its
200-day moving average (d-MA) and is sitting just below its 100-dMA. The
100-dMA is a key point of resistance. If the Index can close above the 200-dMA Thursday,
I think it would be a bullish sign.
The Index is also just below its upper Bollinger Band (std-deviations
above the average) and that’s bearish.
RSI is not yet confirming the Bollinger Band negative sign so we can
ignore this for a bit longer.
My Money Trend indicator remains bullish. Sentiment is
still falling and that is bullish.
Again, today we saw strong late-day buying, and that’s a
bullish sign, too. Closing Tick (last trades of the day) was a positive +99. Late-day action and positive tick suggests
that the Pros think this rally is going higher.
My daily sum of 17 Indicators improved from +3 to +7 (a
positive number is bullish; negatives are bearish) while the 10-day smoothed
version that negates the daily fluctuations improved from -17 to -4. This is a big
and positive move.
Today was a statistically-significant, up-day. That just means that the price-volume move up
exceeded statistical parameters that I track. The stats show that about 60% of
the time a statistically significant move up will be followed by a down-day the
next day.
Today is trading day 34 for this pullback counting from
the top. The drop from the top is now 4% (9.9% max) so we are more than half
way back to the top. (These numbers are based on closing data.) Over the last
10-years, for drops less than 10%, the average time from top to bottom has been
32-days to a final bottom, including a retest. (The low is usually at the
retest.) Except for major crashes, the average correction was about 12% and
lasted 53 trading-days including retests. We can’t say for certain that this
correction is over unto the market makes new highs.
It is more likely that the correction will re-test the
prior low of 2641 than just continue its move higher. It may make sense to
reduce stock holdings some as the markets recover. I plan to watch indicators,
especially VIX and Money Trend, to see if they may give us some indication of
whether to hold on or cut back stock holdings.
For now, I think the market can go a bit higher before stalling.
That’s mostly a guess. I remain cautiously bullish in the short-term.
I may just cut some stock holdings just to limit risk if
the Index does begin to slip down. We’ll see.
MOMENTUM ANALYSIS:
(Momentum analysis is not useful in a selloff.)
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. While momentum isn’t stock performance per
se, momentum is closely related to stock performance. For example, over the
4-months from Oct thru mid-February 2016, the number 1 ranked Financials (XLF)
outperformed the S&P 500 by nearly 20%. In 2017 Technology (XLK) was ranked
in the top 3 Momentum Plays for 52% of all trading days in 2017 (if I counted
correctly.) XLK was up 35% on the year while the S&P 500 was up 18%.
*For additional background on the ETF ranking system see
NTSM Page at…
TODAY’S RANKING OF THE DOW 30 STOCKS (Ranked Daily)
The top ranked stock receives 100%. The rest are then
ranked based on their momentum relative to the leading stock.
*I rank the Dow 30 similarly to the ETF ranking system.
For more details, see NTSM Page at…
WEDNESDAY MARKET INTERNALS (NYSE DATA)
Market Internals
remained Positive on the market.
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. In 2014, using these internals alone would
have made a 9% return vs. 13% for the S&P 500 (in on Positive, out on
Negative – no shorting).
I am now 50% invested in stocks. For me, fully invested
is a balanced 50% stock portfolio. As a retiree, this is a position with which
I am comfortable unless I am in full defense mode or feeling especially
optimistic.
INTERMEDIATE / LONG-TERM INDICATOR - HOLD
Wednesday, the Price
& Volume indicators were positive; Sentiment was neutral; the VIX indicator
was negative. Overall this is a NEUTRAL indication.
