“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 (CNBC)
“American workers continued to hit the unemployment line
in large numbers last week, with 898,000 new claims filed for jobless benefits...The
total for the week ended Oct. 10 was the highest number since Aug. 22 and
another sign that the labor market continues to struggle to get back to its
pre-coronavirus pandemic
mark as cases rise and worries increase over a renewed wave in the fall and
winter.” Story at...
https://www.cnbc.com/2020/10/15/weekly-jobless-claims.html
PHILADELPHIA FED INDEX / EMPIRE STATE MANUFACTURING
(Marketwatch)
“The Philadelphia Fed manufacturing index surged to a
reading of 32.3 in October from 15 in September...The Empire State Index, meanwhile slowed to a reading of 10.5
in October from 17 in September, the New York Fed said... Manufacturing has
been a bright spot in the economy. Economists see the sector gaining because it
has been able to adopt protections for workers against the coronavirus.” Story
at...
EIA CRUDE OIL INVENTORIES (Energy Information
Administration)
“U.S. commercial crude oil inventories (excluding those
in the Strategic Petroleum Reserve) decreased by 3.8 million barrels from the
previous week. At 489.1 million barrels, U.S. crude oil inventories are about
11% above the five year average for this time of year.” Story at...
http://ir.eia.gov/wpsr/wpsrsummary.pdf
LEAST IMPORTANT ELECTION OF OUR LIFETIMES
(DollarCollapse.com)
“A consensus seems to have formed on both left and right
that the upcoming presidential election involves some literally existential
questions, making it THE MOST IMPORTANT ELECTION OF OUR LIFETIMES. In
fact, the opposite is true. This election is the least important of
the past 30 years and very possibly the least important ever. Because, to put
it bluntly, we’re kind of screwed either way.” – John Robino, Finance MBA from
New York University, Eurodollar trader, equity and junk bond analyst, author.
https://www.dollarcollapse.com/least-important-election/
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website
at 6:20pm Thursday. 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. That’s
a BIG JUMP in new cases today.
France had 32,000 new cases yesterday. To put that in
perspective, the US had about 50,000 new cases and we are 5 times larger than
France. The World is headed for more trouble, and once again, it appears to be
under-appreciated in the US stock markets.
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 slipped about 0.1% to 3483.
-VIX rose about 2% to 26.40.
-The yield on the 10-year Treasury rose to 0.737%.
Not much change from yesterday.
The daily sum of 20 Indicators remained +1 (a positive
number is bullish; negatives are bearish). The 10-day smoothed sum that smooths
the daily fluctuations remained +61. (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 30 days old. 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.
The Long Term NTSM indicator ensemble has been HOLD for
the last 15 days after a SELL before that. The Volume indicator is positive;
Sentiment and Price Indicators are neutral. VIX is bearish.
The Index is 2.6% above its 50-dMA (3397) so the Bulls
will need to see that level hold if the downtrend is to end.
I remain bearish.
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.
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.
