“The big money is not in the buying and selling. But in the
waiting.” - Charlie Munger, Vice Chairman, Berkshire Hathaway
JOBLESS CLAIMS (Reuters)
“The number of Americans filing new claims for
unemployment benefits fell last week, but remained perched at extremely high
levels as the labor market recovery shifts into low gear and consumer spending
cools amid fading fiscal stimulus. Initial claims for state unemployment
benefits totaled a seasonally adjusted 860,000 for the week ended Sept. 12,
compared to 893,000 in the prior week…” Story at…
https://www.reuters.com/article/idUSKBN2681Y1
HOUSING STARTS (CNBC / Reuters)
“U.S. homebuilding fell in August after strong gains in
the prior three months, but the housing market remains supported by record-low
interest rates and demand for properties in the suburbs and low-density areas
as many people work from home.
Housing starts dropped 5.1%...” Story at…
https://www.cnbc.com/2020/09/17/housing-starts-august-2020.html
PHILADELPHIA FED INDEX (MarketWatch)
“The Philadelphia Fed said Thursday its gauge of business
activity in its region dipped in September. The regional Fed bank’s index fell to 15 from 17.2 in
August. Any reading above zero indicates improving conditions.” Story at…
THE BIG FOUR ECONOMIC INDICATORS (Advisor Perspectives)
“There is…a general belief that there are four big
indicators that the [NBER Business Cycle Dating] committee weighs heavily in
their [recession] cycle identification process. They are: Nonfarm
Employment; Industrial Production; Real Retail Sales; Real Personal Income (excluding Transfer Receipts)…
Here is a percent-off-high chart based on an average of the Big Four.” – Jill
Mislinsky.
Charts and commentary at…
IS EVERYTHING PRICED IN? (Real Investment Advice,
9/15/2020)
“Overall, our assessment remains one of caution. In the
short-term, we could well see an oversold bounce that could even recover back
to the previous highs. However, we suspect that given the rather numerous
headwinds currently facing the markets, from the Fed to the election, that a
failure at lower highs would not be surprising.” Commentary at…
https://realinvestmentadvice.com/technically-speaking-is-everything-priced-in/
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website
at 5:00 Thursday.
Total US numbers are on the left axis; daily numbers are on the right side of
the graph with the 10-dMA of daily numbers in Green. There is a worrisome trend
in the numbers: they have flattened out and do not appear to be trending down
at present.
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 dropped about 0.8% to 3357.
-VIX rose about 2% to 26.46.
-The yield on the 10-year Treasury slipped to 0.693%.
I was a bit surprised to see today’s down-day. There were
plenty of bear signs, but I had expected the strong internals yesterday to
carry over to today. It was not to be, although there was some optimism at the
end of the day today.
Thursday, the S&P 500 opened below its 50-dMA and
then bounced around and finished a half-% above it due to late-day buying.
At today’s close, the S&P 500 was 8.2% above its
200-dMA. Values in the 10-15% range are sell-signal, and this indicator is neutral
now.
The daily sum of 20 Indicators slipped from -1 to 4 (a
positive number is bullish; negatives are bearish). The 10-day smoothed sum
that smooths the daily fluctuations declined from -38 to -49. (These numbers
sometimes change after I post the blog based on data that comes in late.) Most
of these indicators are short-term and many are trend following.
The Long Term NTSM indicator ensemble remained SELL.
Volume and Price and the Panic Indicator are bearish. It has been SELL for the
last 8 days.
The 5-10-20 Timer System remains negative because both
the 5-dEMA and the 10-dEMA are below the 20-dEMA.
I remain bearish. As always, the FED is the wild-card. Is
the market playing under new rules? Maybe, but in the past, the FED can’t hold
up markets if sentiment switches to fear. My guess is that the S&P 500 will
fall below the 50-dMA on its next try (It’s just a guess). One can also make a
good argument that with 4 trips to the 50-dMA and 4 bounces higher, the market
is going back to new highs – we’ll see.
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
THURSDAY MARKET INTERNALS (NYSE DATA)
Market Internals remained
NEUTRAL 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.
Using the Short-term indicator in 2018 in SPY would have
made a 5% gain instead of a 6% loss for buy-and-hold. The methodology was Buy
on a POSITIVE indication and Sell on a NEGATIVE indication and stay out until
the next POSITIVE indication. The back-test included 13-buys and 13-sells, or a
trade every 2-weeks on average.
My current stock allocation is about 30% invested in
stocks. You may wish to have a higher or lower % invested in stocks depending
on your risk tolerance. 30% is a very conservative position that I
re-evaluate daily. The XLE has been a loser for me since I was too early. It is
still yielding over 10%, so I have to remind myself to be patient.
As a retiree, 50% in the stock market is about fully
invested for me – it is a cautious and conservative number. If I feel very
confident, I might go to 60%; had we seen a successful retest of the bottom,
80% would not have been out of the question.
