“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
EMPIRE STATE MANUFACTURING (Advisor Perspectives)
“Business activity grew at a swift pace in New York
State, according to firms responding to the September 2021 Empire State
Manufacturing Survey. The headline general business conditions index climbed
sixteen points to 34.3.” Commentary at...
INDUSTRIAL PRODUCTION (The Journal)
“U.S. industrial production slowed to a 0.4% gain in
August as the shutdowns caused by Hurricane Ida curbed manufacturing activity.”
Story at...
https://www.the-journal.com/articles/august-industrial-output-slows-to-0-4-gain-after-ida-strike/
EIA CRUDE INVENTORIES (EIA)
"U.S. commercial crude oil inventories (excluding those in
the Strategic Petroleum Reserve) decreased by 6.4 million barrels from the
previous week. At 417.4 million barrels, U.S. crude oil inventories are about
7% below the five year average for this time of year." Press release at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf
My cmt: This still looks bullish for oil to me, though I
am not an oil analyst.
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website as
of 8:30 PM Wednesday. 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. One can see it is off its peak, so perhaps we have seen the worst of
the Delta-variant. New cases are falling sharply – maybe we’ll get lucky and
the surge is over. Cases are falling in New York and some were suggesting that
would be the next target for the Delta-variant. I guess not.
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 was up about 0.9% to 4481.
-VIX fell about 7% to 18.18.
-The yield on the 10-year Treasury remained 1.301%.
Volume picked up today, but up-volume was not all that
impressive and new-highs didn’t improve much. Today was a statistically
significant up-day. That just means that the price-volume move exceeded my
statistical parameters. Statistics show that a statistically-significant,
up-day is followed by a down-day about 60% of the time. Further, this followed
a statistically significant down day Tuesday. This can be interpreted bull or
bear depending on whether the Index is at a bottom or a top. Now, we can’t really say, but several other
indicators have turned bearish.
My statistical analysis of the S&P 500 is too calm and
that has flashed a “calm-before-the-storm” warning. That is not a good timing indicator since it
can be a month or more early, but it is often right. We still see the 50-dMA of
issues advancing on the NYSE is below 50% - that’s quite bearish and we need to
see improvement there. None of this guarantees a pullback; small movements give
small signals.
We may have made a bottom, but
I’m not convinced yet. I’m leaning bearish for now, but I can be swayed if indicators
improve.
The daily sum of 20 Indicators improved from -10 to -8 (a
positive number is bullish; negatives are bearish); the 10-day smoothed sum
that smooths the daily fluctuations declined from -33 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 Long Term NTSM indicator ensemble
remained HOLD. Price is bullish; VIX, Volume & Sentiment indicators are
neutral.
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
WEDNESDAY MARKET INTERNALS
(NYSE DATA)
Market Internals remained BEARISH 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 is now
about 45% invested in stocks; this is slightly below 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.
