CONSUMER CONFIDENCE (Advisor Perspectives)
“Consumer confidence dropped in September as the spread
of the Delta variant continued to dampen optimism,” said Lynn Franco, Senior Director of Economic
Indicators at The Conference Board. “Concerns about the state
of the economy and short-term growth prospects deepened, while spending
intentions for homes, autos, and major appliances all retreated again.
Short-term inflation concerns eased somewhat, but remain elevated. Consumer
confidence is still high by historical levels—enough to support further growth
in the near-term—but the Index has now fallen 19.6 points from the recent peak
of 128.9 reached in June. These back-to-back declines suggest consumers have
grown more cautious and are likely to curtail spending going forward.” Commentary
at...
POWELL SAYS SPIKE IN INFLATION LASTING LONGER THAN
EXPECTED (AP via msn.com)
“Federal Reserve Chairman Jerome Powell is preparing to
tell Congress that the current spike in U.S. inflation has proven to be larger
and more long-lasting than expected. But, in remarks prepared for delivery
Tuesday, he says that if inflation does not abate, the Fed is ready to use its
tools to lower the pressure on prices.” Story at...
Powell
says spike in inflation lasting longer than expected (msn.com)
MORGAN STANLEY REMAINS BEARISH (moguldom)
“Some deteriorating market indicators and the end of
major pandemic relief programs suggest a coming plunge of more than 20 percent
in U.S. stocks as the economy returns to a more normalized pace. The transition
could be rougher than many expect, according to Morgan Stanley, which is
considered more bearish than most Wall Street strategists. In a note to
clients, chief US. Morgan Stanley Equity Strategist Mike Wilson said that
the market is at a fork in the road with one road leading to “fire” and the
other to “ice.” The market appears to be heading down the ice path.” Story at
HOW CLIMATE CHANGE MAKES HURRICANES MORE DESTRUCTIVE
(Environmental Defense Fund)
“Researchers suggest that the most damaging U.S.
hurricanes are three times more frequent than 100 years ago, and that the
proportion of major hurricanes (Category 3 or above) in the Atlantic Ocean has
doubled since 1980. How fast hurricanes intensify has also increased in the
Atlantic since the 1980s, due to climate change.” Story at...
Well, not really...
“In terms of frequency, studies have consistently shown “no
discernible trend in the global number of tropical cyclones.” – Yale Climate
Connections.
Regarding intensity...
THE NATIONAL CLIMATE ASSESSMENT SAYS HURRICANE INTENSITY
HASN’T EXCEEDED NORMAL VARIABILITY (NCA, CSSR)
The National Climate Assessment issued in 2017 as the
Climate Science Special Report states “...the globally observed changes...would
not necessarily support a detectable trend in tropical storm intensity...the
trend signal has not yet had time to rise above the background variability of
natural processes.” - CSSR
“If we can’t have confidence that a durable trend exists,
we certainly can’t confidently attribute one to human influences...Given the
large variations in data, one could plausibly [examine the trend] from 1960 to
1985 with a comparative negative trend [in intensity].” – Steven Koonin, Phd.
From his book, “Unsettled? What Climate Science Tells us and What it Doesn’t
and Why it Matters.”
My cmt: Global Warming is real: the earth has warmed 1
degree C in the last 100 years. It is sad that there is now a media consensus
and propaganda program to convince the public that Global Warming will have
catastrophic effects when the science isn’t settled.
Jeremy Grantham was on CNBC this afternoon warning of Armageddon
if global-warming goes up another 2 degrees C (3 degrees C total). I point out
again (I posted this a few days ago): The UN’s Intergovernmental Panel on
Climate Change and the US government’s National Climate Assessments — indicate
that “significant human-induced climate change would have negligible net
economic impact on either the world or the US economies by the end of this
century”... Story at...
That report assumes a 3 degree C warming by the end of
the century. None of this means we should do nothing, but to destroy the
economy to get to zero carbon may not be realistic, or necessary, especially
given that the rest of the world is not going to get to zero carbon and
emerging markets, including China and India, aren’t even trying.
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website as
of 5:30 PM Tuesday. U.S. total case numbers are on the left axis; daily numbers
are on the right side of the graph in Red with the 10-dMA of daily numbers in
Green.
I added the smoothed 10-dMA of new cases (in purple) to the chart. Finally, there is a clear trend down.
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 fell about 2% to 4353.
-VIX rose about 23% to 23.11.
-The yield on the 10-year Treasury rose to 1.541%.
Ruh-Roh!! The S&P 500 fell below its recent low of
4354 a week ago (21 September) and it did it with deterioration in the basic
internals. Breadth, volume and new-lows
were all worse today than last week.
That’s not good. It suggests a continuation of the pullback even though
the previous numbers and market action seemed to show an end. This was a Distribution Day suggesting the
Pros are selling.
There was also a Hindenburg Omen today. This signal is usually a concern when there
are several clustered together. There were five about 2 weeks before the 2 September
top.
The Hindenburg Omen is a stock market indicator named
after the famous crash of the Hindenburg dirigible in New Jersey in 1937. As
you might expect, it is supposed to forewarn of a stock market crash. To have a Hindenburg Omen warning the
following conditions must be met:
“-The daily number of new 52-week highs and 52-week lows
in a stock market
index are greater than a threshold amount (typically 2.2%).
-The 52-week highs cannot be more than two times the
52-week lows.
-The stock market index is still in an uptrend. A
10-week moving
average, or the 50-day rate of
change indicator, is used to indicate this.
-The McClellan
Oscillator (MCO), a measure of the shift in market sentiment,
is negative.”
Definition from Investopedia at...
https://www.investopedia.com/terms/h/hindenburgomen.asp
On the good side, today was a statistically significant down-day.
That just means that the price-volume move exceeded my statistical parameters.
Statistics show that a statistically-significant, down-day is followed by an up-day
about 60% of the time.
The S&P 500 is sitting just above its 100-dMA. It
sure looks like the Index wants to test its 200-dMA. A break below the 100-dMA
will not be a good sign.
The daily sum of 20 Indicators declined from +3 to -3 (a
positive number is bullish; negatives are bearish); the 10-day smoothed sum
that smooths the daily fluctuations improved from -60 to -53 (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 HOLD. Volume was bearish; VIX, Price & Sentiment
indicators are neutral.
VIX is very close to a
sell. If I get a Long-term indicator
sell-signal, I will sell my recent acquisitions. BTW, I bought the high momentum stocks/ETFs
in my momentum system – none of them have held up over the last several days of
trading.
I’m suddenly leaning bearish
and I’ll probably be a bear tomorrow if this weakness continues. That will
require taking some losses in recent purchases – discipline.
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 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.
My stock-allocation in the
portfolio is now about 55% invested in stocks; this is slightly above my
“normal” fully invested allocation of 50%.
You may wish to have a higher
or lower % invested in stocks depending on your risk tolerance. 50% is a
conservative position that I consider fully invested for most retirees.
As a general rule, some
suggest that the % of portfolio invested in the stock market should be one’s
age subtracted from 100. So, a
30-year-old person would have 70% of the portfolio in stocks, stock mutual
funds and/or stock ETFs. That’s ok, but
for older investors, I usually don’t recommend keeping less than 50% invested
in stocks (as a fully invested position) since most people need some growth in
the portfolio to keep up with inflation.
