“We’ve got to ride this global warming issue. Even if the theory of global warming is wrong, we will be doing the right thing in terms of economic and environmental policy.” – Timothy Wirth, President of the UN Foundation as quoted in “Unsettled?” by Steven E. Koonin.
“Some colleagues who share some of my doubts argue that
the only way to get our society to change is to frighten people with the
possibility of a catastrophe and that therefore it is all right and even
necessary for scientists to exaggerate. They tell me that my belief in open and
honest assessment is naïve.” – Danial Botkin, Former Chair of the Environmental
Studies at the University of California at Santa Barbara as quoted in
“Unsettled?” by Steven E. Koonin.
“...climate-assessment reports have misrepresented
scientific research in the “conclusions” presented to policy makers and the media. The
summary of the most recent U.S. government climate report, for instance, said heat waves across the U.S. have become more frequent
since 1960, but neglected to mention that the body of the report shows they
are no more common today than they were in 1900. Knowledgeable independent
scientists need to scrutinize the latest U.N. report because of the major
societal and economic disruptions that would take place on the way to a “net
zero” world, including the elimination of fossil-fueled electricity,
transportation and heat, as well as complete transformation of agricultural
methods.” Steven E. Koonin, PhD. From WSJ Op-ED at...
HOUSING STARTS / BUILDING PERMITS (Reuters)
“Housing starts for the month of August rose 3.9%, well
ahead of the Street consensus forecast of a 1% gain, taking the annual
pace to around 1.615 million units. Permits for new construction were also
notably higher, rising 6% on the month to an annual pace of 1.723 million
units. Nearly all of the August gains, however, were linked to multi-family
homes, with new single-family home starts fell 2.8% from July...” Story at...
https://www.thestreet.com/markets/housing-starts-get-multi-family-boost-supply-chain-issues-linger
GOP WILL VOTE FOR DEFAULT (msn.news)
“House Speaker Nancy Pelosi and Senate Majority Leader
Chuck Schumer said on Monday that the House would pass legislation to fund the
government that includes a debt-limit suspension through the end of next
year..."We [Republicans] will not support legislation that raises the debt
limit," McConnell said after Pelosi and Schumer's announcement.
"Democrats do not need our help." Story at...
Mitch
McConnell says the GOP will vote for the US to default on its debt (msn.com)
My cmt: Seemingly, the Dems have the votes and ability to
raise the debt ceiling through reconciliation without any republican votes.
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website as
of 6:00 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.
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 dropped about 0.1% to 4354
-VIX dipped about 5% to 24.36.
-The yield on the 10-year Treasury rose to 1.325%.
Today, XLU (Utilities) underperformed the S&P 500 (a
bullish signal) while the XLI (Cyclical Industrials) also underperformed the S&P
500 (a bearish signal). There was, however, almost a signal that the pullback is
over or very nearly over.
Volume declined, suggesting selling pressure is reduced
and market internals improved indicating the overall market improved even
though the S&P 500 was down for the day.
In fact, the NYSE Composite was up nearly a quarter percent while the
Index dropped about a tenth of a percent. One caveat: I would like to have seen
a stronger close – that would have given a real buy-signal today. As it was, my
system did not quite generate a buy-signal. It was close enough to take a clue
from market action.
Let’s see what happens tomorrow. If today was the bottom,
market participants should agree and there will be some very bullish action tomorrow
and I’ll be a buyer. If we don’t see strong up-action Wednesday, I’ll have to
wait and see.
Today, the S&P 500 closed 1.8% below its 50-dMA. A
break above the 50-dMA would be bullish. Both RSI and Bollinger Bands remained oversold
and that’s definitely bullish.
The daily sum of 20 Indicators improved from -11 to -10
(a positive number is bullish; negatives are bearish); the 10-day smoothed sum
that smooths the daily fluctuations declined from -80 to -88 (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 SELL (Sorry, I had a typo here yesterday). Volume and
VIX are bearish; VIX, Price & Sentiment indicators are neutral.
The Long Term NTSM indicator is
trumped by improving internals on falling volume so (as noted above) Wednesday’s
market action may tip us regarding where this market is really headed. The Long-term Indicator can be slow to give
buy signals.
I’ll turn bullish if we see
strong buying tomorrow; otherwise, I’ll remain cautious.
CORRECTION DATA
Days since the prior high: 15
days
%-drop from the top: 4.0% (It
actually seems odd to call this weakness a correction.)
100-dMA: 4330
200-dMA: 4109 (6.0% below
today’s close)
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 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 in the
portfolio is now about 40% invested in stocks; this is 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.
