“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
"If I was Darth Vader and I wanted to destroy the US
economy, I would do aggressive spending in the middle of an already hot
economy...This is the biggest bubble I've seen in my career." - Stanley
Druckenmiller, billionaire investor.
DURABLE ORDERS (Fox Business)
“Orders for big-ticket items fell last month for the
first time since April as manufacturers grappled with supply chain bottlenecks.
New orders for manufactured goods declined 0.4% in September, according to the
Census Bureau.” Story at...
https://www.foxbusiness.com/economy/durable-goods-orders-september-2021
EIA CRUDE INVENTORIES (Energy Iinformation Administration)
“U.S. commercial crude oil inventories (excluding those
in the Strategic Petroleum Reserve) increased by 4.3 million barrels from the
previous week. At 430.8 million barrels, U.S. crude oil inventories are about
6% below the five year average for this time of year.” Story at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf
NEW HIGHS CONTINUE (Heritage Capital)
“High yield bonds are lagging and they are essential for
the overall health of the bull market. It’s not a day to day issue or even week
to week. However, we don’t want this divergence to continue into Q1. Also, the
number of stocks advancing versus declining on rally days has been less than
inspiring. However, the New York Stock Exchange Advance/Decline...just made an
all-time high [25 Oct.] which is very positive into 2022. Bull markets rarely
end with so much participation.” – Paul Schatz, President Heritage Capital.
Commentary at...
https://investfortomorrow.com/blog/new-highs-continue-as-forecast-always-a-concern/
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website as
of 7:30 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.
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 dropped about 0.5% to 4552.
-VIX rose about 6% to 16.98.
-The yield on the 10-year Treasury dipped to 1.549%.
RSI and the Smart Money overbought / oversold ratio improved
a bit and are not now overbought.
There is a new topping warning: Breadth vs, the S&P
500 indicates that the Index is getting ahead of the underlying % of stocks
advancing on the NYSE. I used to put a lot of faith in this indicator, but
lately it has signaled too early.
The daily sum of 20 Indicators declined from zero to -3
(a positive number is bullish; negatives are bearish); the 10-day smoothed sum
that smooths the daily fluctuations declined from +49 to +44. (These numbers sometimes change after
I post the blog based on data that comes in late.) Most of these indicators are
short-term so they do tend to bounce around a lot.
The Long Term NTSM indicator
ensemble improved to BUY. Volume and Price are bullish; Sentiment and VIX
indicators are neutral.
I remain bullish.
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 declined to HOLD.
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 65% invested in stocks; this is above my “normal” fully
invested stock-allocation of 50% stocks. Indicators are very bullish, so I am
holding a short-term position in additional Index Funds to boost returns.
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.
