"Top 1%, 20.9% of income, 40.1% of taxes. Bottom 90%
paid just 28.6% of taxes. Top 1% tax rate is 7X HIGHER than rate paid by the
bottom 50%. Biden tells rich to "pay like everybody else does." So, a
tax cut for the rich? Or class warfare built on lies." – Michael “Big
Short” Burry.
FOMC MINUTES (YahooNews)
“The Federal Reserve signaled on Wednesday it could start
reducing its crisis-era support for the U.S. economy by the middle of next
month, with a growing number of its policymakers worried that high inflation
could persist longer than previously thought. Though no decision on a ‘taper’
of the U.S. central bank's $120 billion in monthly asset purchases was reached
at its Sept. 21-22 policy meeting...” Story at...
https://finance.yahoo.com/news/patient-aggressive-fed-policymakers-split-051044878.html
CONSUMER PRICE INDEX CPI (CNBC)
“Consumer prices increased slightly more than expected in
September as food and energy price rises offset declines in used cars...The
consumer price index for all items rose 0.4% for the month...On a
year-over-year basis, prices increased 5.4%...” Story at...
EIA CRUDE INVENTORIES (EIA) This was last week's report. The new report will be issued on Thursday of this week due to the Monday holiday.
“U.S. commercial crude oil inventories (excluding those
in the Strategic Petroleum Reserve) increased by 2.3 million barrels from the
previous week. At 420.9 million barrels, U.S. crude oil inventories are about
7% 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 0.3% to 4362.
-VIX dipped about 5% to 18.92.
-The yield on the 10-year Treasury slipped to 1.539%.
PULLBACK DATA
Days since Top: 31 days; Average correction length for
corrections <10% = 33
Drop from the Top: 5.2% max; 3.9% at today’s close.
Average total correction decline (top to bottom) over the last 10-years = 13%,
ignoring major crashes.
We still have bear signs out there. Here are a couple: XLU-ETF (Utilities)
outperformed the S&P 500 again today; The 50-dMA of the % of issues
advancing on the NYSE remains below 50%; and the S&P 500 remained below its
100-dMA.
Again today, we had high,
unchanged-volume on the NYSE. In theory
this in an indication that investors are confused and it can signal a reversal.
At this point, I’m not sure which way that reversal might be – the Index is
only 4% below its all-time high.
The daily sum of 20 Indicators improved from zero to +2
(a positive number is bullish; negatives are bearish); the 10-day smoothed sum
that smooths the daily fluctuations improved from -38 to -26 (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. VIX, Volume, Price & Sentiment indicators are
neutral.
We were due for an up-day
after four straight down-days. Let’s see
if the Index can break above its 100-dMA.
Until convinced otherwise, I remain bearish.
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 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 45% 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.
