Biden doesn’t understand the law of supply and demand?
NAHB HOUSING MARKET (Advisor Perspectives)
“Builder confidence inched up in September on lower
lumber prices and strong housing demand, even as the housing sector continues
to grapple with building material supply chain issues and labor challenges.”
Commentary at...
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website as
of 4:30 PM Monday. 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
-Monday the S&P 500 dropped about 1.7% to 4358
-VIX rose about 24% to 25.71.
-The yield on the 10-year Treasury fell to 1.313%.
There was another Panic Indicator today caused by the big
move down on high volume. This signal happens at the beginning of downturns (as
now) or at bottoms due to the big move (as now?) So, the signal can be both a
top or a bottom indicator. Now it is not clear. As I mentioned in my earlier
post, we did have some bull signs: RSI, Bollinger Bands and the
Overbought/oversold ratio are all oversold. For small downturns, these are
pretty good indicators of a bottom. The
problem is that we don’t know yet whether this is a small pullback or not.
Given that Friday’s rundown of indicators was very bearish and most indicators
have gotten worse, we probably haven’t seen a bottom. Further, the indicators
are less important now. What we need to see now, is falling volume and
improving internals on a new low.
We are probably not looking at a crash. Major tops
preceding Bear markets tend to end with a bang of exuberance, not a whimper
like we’ve seen. In addition, the breadth was pretty good at the all-time high.
Today, the S&P 500 closed 1.7% below its 50-dMA -
ouch.
Monday was a another 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.
Statistically-significant, down-days are usually near bottoms, but
statistically-significant, down-days can happen anytime so they can’t be used
alone for bottom calls. I expected a bounce Monday - now there are more signs
of a bounce for Tuesday and it’s even possible that today was a bottom.
The daily sum of 20 Indicators declined from -9 to -11 (a
positive number is bullish; negatives are bearish); the 10-day smoothed sum
that smooths the daily fluctuations declined from -68 to -80. (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 and VIX are bearish; VIX, Price & Sentiment
indicators are neutral.
I’m bearish. Now, we’ll have
to see if the 100-dMA holds.
CORRECTION DATA
Days since the prior high: 14
days
% drop from the top: 4%
100-dMA: 4328
200-dMA: 4106 (6.1% 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
MONDAY 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.
