TORNADOES AND GLOBAL WARMING (National Geographic)
“There is no real evidence that tornadoes are
happening more often. A lot more are being recorded now than in 1950, but a
closer look at the data shows the increase is only in the weakest category,
EF0. There's been no increase in stronger twisters, and maybe even a slight
decrease in EF4s and EF5s. That suggests we're just spotting more of the weak
and short-lived tornadoes than we did back when the country was emptier (the
United States population in 1950 was less than half what it is now), we didn't
have Doppler radar, and Oklahoma highways weren't jammed
with storm-chasers.” Story at...
https://www.nationalgeographic.org/article/tornadoes-and-global-warming-there-connection/
My cmt: Of course, this is not what the Weather Channel
has been breathlessly telling us – the warming planet is causing more
tornadoes. Turns out the science doesn’t support that conclusion.
FOMC RATE DECISION (CNBC)
“The Federal Reserve on Wednesday held benchmark interest
rates near zero but indicated that rate hikes could be coming sooner than
expected, and it significantly cut its economic outlook for this year. Along
with those largely expected moves, officials on the policymaking Federal Open
Market Committee indicated they will start pulling back on some of the stimulus
the central bank has been providing during the financial crisis. There was no
sign, though, as to when that might happen.” Story at...
EXISTING HOME SALES (CNBC)
“Sales of previously owned homes declined 2% in August
from July to a seasonally adjusted annualized rate of 5.88 million units,
according to the National Association of Realtors. Sales were 1.5% lower than
August 2020...” Story at...
EIA CRUDE INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those
in the Strategic Petroleum Reserve) decreased by 3.5 million barrels from the
previous week. At 414.0 million barrels, U.S. crude oil inventories are about
8% below the five year average for this time of year.” Report at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website as
of 6:00 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.
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 rose about 1% to 4396.
-VIX dropped about 14% to 20.87.
-The yield on the 10-year Treasury slipped to 1.311%.
Short and shallow – the “correction”, or should I say
market weakness, appears to be over for now. As I noted yesterday, my indicators
were very nearly a buy, but we didn’t have a bullish close. Small moves give small signals. As a result,
I wrote, “Let’s see what happens tomorrow. If Tuesday was the bottom, market
participants should agree and there will be some very bullish action Wednesday
and I’ll be a buyer. We got the bullish move so that put me in a buy mode and I
am back to fully invested.
Today, the S&P 500 closed 0.9% below its 50-dMA. A
break above the 50-dMA would be bullish. Conversely, a failure at the 50-dMA
would be a bearish sign suggesting that the weakness is not over.
The daily sum of 20 Indicators improved from -10 to -3 (a
positive number is bullish; negatives are bearish); the 10-day smoothed sum
that smooths the daily fluctuations improved from -88 to -84 (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
improved to HOLD. Volume is bearish; VIX, Price & Sentiment indicators are
neutral.
CORRECTION DATA? – CORRECTION OVER
The markets could reverse back down and
fool investors, but I don’t expect it.
I’m bullish based on today’s
confirmation that the “bottom” was Tuesday. This bullish feeling may not last
long. The Index needs to break above its
50-dMA and then move on to new highs.
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 improved to 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 50% invested in stocks; this is my “normal” fully invested
allocation.
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.
