“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
“The big money is not in the buying and selling. But in the waiting.” - Charlie Munger, Vice Chairman, Berkshire Hathaway JOBLESS CLAIMS (MarketWatch) “The number of Americans who applied for unemployment benefits through state and federal programs rose in early September for the third week in a row, signaling that a gradual improvement in the labor market during the summer has stalled. Initial jobless claims filed traditionally through state employment offices were unchanged at a seasonally adjusted 884,000 in the week of Aug. 30 to Sept. 5…” Story at… https://www.marketwatch.com/story/new-us-jobless-claims-flat-at-884000-a-fresh-wave-of-layoffs-hitting-the-economy-2020-09-10
PPI (Advisor Perspectives) “Today's release of the August Producer Price Index (PPI) for Final Demand was at 0.3% month-over-month seasonally adjusted, down from a 0.6% increase last month. It is at -0.2% year-over-year…” Story at… https://www.advisorperspectives.com/dshort/updates/2020/09/10/august-producer-price-index-core-final-demand-up-0-4-mom?topic=covid-19-coronavirus-coverage
EIA CRUDE INVENTORIES WEEK ENDING 4 SEPT (Energy Information Administration) “U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 2.0 million barrels from the previous week. At 500.4 million barrels, U.S. crude oil inventories are about 14% above the five year average for this time of year.” Press release at… http://ir.eia.gov/wpsr/wpsrsummary.pdf THE ART OF DOING NOTHING (Felder Report) “Right now, due to the extraordinary circumstances in the world, politics, the economy, monetary policy and more, the urge to do something is even greater than normal. However, the opportunity to put money to work is simply not there. At least not yet. But it’s coming. And until it does, the most proactive thing an investor can do is simply commit to doing nothing, understanding that that is not a passive decision but a very proactive one, indeed.” Commentary at… https://thefelderreport.com/2020/09/09/master-the-art-of-doing-nothing/
DON’T SQUANDER OUR VICTORY OVER TYRANNY – Excerpt (WSJ) “Those of us who served in World War II proudly took part in an American-led effort to save the world from tyranny and oppression. Once the Allies were victorious, America launched a postwar effort to export our values of freedom, democracy, the rule of law, due process, and free enterprise. The result was greater respect for human rights and more than 70 years of global stability and prosperity, which lifted countless millions out of poverty and despair. Today, those same American values are under wide-scale attack in the streets of the U.S., while many of our leaders stand idly by. They have made the calculation that it is politically advantageous to ignore or minimize violence and lawlessness rather than stand up for the rule of law. That is a dereliction of duty. It puts our country in jeopardy. Our great democracy can’t be sustained if the people we entrust to protect it are unwilling or unable to do so.” – Maurice R. Greenberg, CEO of C.V. Starr & Co., U.S. Army platoon commander in World War II and a company commander and captain in Korea. See the full Op-Ed at… https://www.wsj.com/articles/dont-squander-our-victory-over-tyranny-11599668539
CORONAVIRUS (NTSM) Here’s the latest from the COVID19 Johns Hopkins website at 6:10 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.
MARKET REPORT / ANALYSIS -Thursday the S&P 500 dropped about 1.8% to 3339. -VIX rose about 3% to 29.71 -The yield on the 10-year Treasury fell to 0680%. Yesterday/today was/is the 20th anniversary of the 99-Bug. What is that you say? The year 2000, Y2K disaster, was supposed to happen when computer programs couldn’t handle turn of the millennium, year 2000. Many computer programs only allowed 2 digits (99) for the year. DOD was very concerned and we were taking steps in our construction contracts to correct the issue. For similar reasons, 9/9/99 was also expected to be a problem. Per Wikipedia, “Even before 1 January 2000 arrived, there were also some worries about 9 September 1999…Because this date could also be written in the numeric format 9/9/99, it could have conflicted with the date value 9999, frequently used to specify an unknown date.” On the 10th, nothing happened. Elevators worked; the power grid didn’t collapse; there were no nuclear disasters. That’s when we knew the hysteria over Y2K was not justified.
At today’s close, the S&P 500 was 7.8% above its 200-dMA. When I looked at previous times when the index was in the range of 10-15% above its 200-dMA (as it was at the top), corrections often tended to drop near the 200-dMA. We also note that when the advance is on a very narrow breadth (as we saw several times at the recent tops) corrections tended to be greater than 10%. As of today, the S&P 500 is down 6.7% from its all-time high.
This is day 5 of the correction. The average time from top to bottom for a correction is 35-days for corrections less than 10% and 68-days for bigger corrections. The Long Term NTSM indicator ensemble remained SELL. Final numbers last night changed the LT NTSM indicator to SELL. I had called it HOLD at yesterday’s close. It has been SELL for the last 3 days.
The daily sum of 20 Indicators declined from -6 to -9 (a positive number is bullish; negatives are bearish). The 10-day smoothed sum that smooths the daily fluctuations dropped from +1 to -10. (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. I’ll be watching for improvements in internals and looking for a bottom. No bottom yet. I remain bearish in the short and intermediate term. I have a small short position in the Nasdaq 100 and a significant short position on the S&P 500 (but not more than 15% of the stock-portfolio – I am retired; no need to risk the nest egg).
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)
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.
The New Blogger sucks! They've ruined an easy and intuitive system. I can't even fix this mess. Sorry!
