“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
HOUSING STARTS / BUILDING PERMITS (Reuters)
“U.S. single-family homebuilding raced to a more than
13-year high in September, cementing the housing market’s status as the star of
the economic recovery amid record-low mortgage rates and a migration to the
suburbs and low-density areas in search of more room for home offices and
schooling. The report from the Commerce Department on Tuesday also showed
building permits and housing completions scaling levels last seen in 2007.” Story
at...
BANNON SAYS MULTIPLE STORIES COMING SOON ON BIDEN CORRUPTION
(ZeroHedge)
“To review, last month the New York Post set
off a nuclear bomb when they released evidence from the younger Biden's hard
drive obtained by Rudy Giuliani, after a computer repair shop owner initially
approached the FBI, which appears to have concealed evidence of Biden family corruption in
Ukraine and elsewhere while President Trump was being
impeached for asking Ukraine to investigate exactly that...The Bidens are about to be
hit with multiple stories from multiple media sources based off evidence beyond
the hard drive. Fox and Peter Schweitzer have already started
but bigger
more mainstream companies are going to weigh in. We already
have set in motion the various apparatuses that will release everything.”
Story at...
My cmt: We’ll see. ZeroHedge doesn’t have the best record
for accurate reporting. I’m not sure if the stock market cares at this point,
we’ll just have to react to the news, if there is any real news. I’m skeptical;
the FBI has had the computer for a year. I haven’t heard this issue mentioned,
but I wonder if ownership is clear. If the Laptop still belongs to Biden, one
presumes probable-cause and a search warrant would be required to gain access
to the information contained on it. If it belongs to the shop owner for some
reason (eg., for non-payment of a bill) does the shop owner have the rights to
the information on the laptop too? Then there is a chain of custody question.
Is the damning evidence real or was the data tampered with? These issues will
be argued long after the election.
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website
at 6:10pm Tuesday. US total case 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
-Tuesday the S&P 500 rose about 0.5% at 3443.
-VIX rose about 0.6% to 29.35.
-The yield on the 10-year Treasury rose to 0.789%.
First, let’s correct a big typo from yesterday. I said,
“The S&P fell hard today and is now about 0.8% above its 200-dMA.” No. The
Index was 0.8% above its 50-dMA, not the 200-dMA. The 50-MA is a
critical support level and it has held recently. As I correctly noted yesterday
(in a different paragraph), the Index is well above its 200-dMA, now 10.2%
above it. When Sentiment is considered, that is a bearish sign. That’s one
topping indicator. Another is that the S&P 500 is too far ahead of Breadth
(stocks advancing on the NYSE).
We see mostly bear signs in the internals. Here are a
couple more:
Advancing volume is falling, New-highs are falling and
the MACD of Breadth switched to Bearish yesterday.
The daily sum of 20 Indicators dropped from -4 to -6 (a
positive number is bullish; negatives are bearish). The 10-day smoothed sum
that smooths the daily fluctuations slipped from +53 to +43. (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 correction is now 33 days old and the Index is 3.8%
below its prior high. Top to Bottom, the avg correction under 10% lasts about
35 days; the avg correction greater than 10% lasts 68 days, excluding major,
50%-crashes. This one will probably be over if they can agree on a Stimulus
Bill.
The Long Term NTSM indicator ensemble has been HOLD for
the last 18 days after a SELL before that. The Volume, Sentiment and Price
Indicators are neutral. VIX is bearish.
I remain bearish, but I’m watching the indicators. While
internals are currently pointing down, the Stimulus Bill is the wild card and
should support a move higher.
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
TUESDAY MARKET INTERNALS (NYSE DATA)
Market Internals improved
to NEUTRAL.
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, but it is appropriate for the correction.
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%; if this correction is deep enough, 80% would not
be out of the question.
