"My vote against the debt limit increase cannot
change the fact that we have incurred this debt already, and will no doubt
incur more...[My “Nay” vote] is a statement that I refuse to be associated with
the policies that brought us to this point." – Senator Joe Biden, 2006.
"You [President Biden] explained on the Senate floor that
your 'no' votes did not mean you wanted the majority to let the country
default, but rather that the President's party had to take responsibility for a
policy agenda which you opposed...Your view then is our view now." –
Senator Mitch McConnell, 2021.
ISM NON-MANUFACTURING INDEX (ISM)
"The September Manufacturing PMI® registered
61.1 percent, an increase of 1.2 percentage points from the August reading of
59.9 percent. This figure indicates expansion in the overall economy for the
16th month in a row after contraction in April 2020...“Business Survey
Committee panelists reported that their companies and suppliers continue to
deal with an unprecedented number of hurdles to meet increasing demand. All
segments of the manufacturing economy are impacted by record-long raw materials
lead times, continued shortages of critical materials, rising commodities
prices and difficulties in transporting products.” Report at...
IHS MARKIT US SECTOR PMI (Markit Services)
“The latest IHS Markit US Sector PMI™ indicated a slowdown
in growth across four of the seven sectors tracked, led by the technology
sector. This was consistent with the broad picture whereby the US remained
adversely affected by the ongoing COVID-19 Delta wave, despite the decline in
case numbers in recent weeks. Meanwhile the US bond market has shown signs of
converging with economic conditions.” Report at...
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website as
of 5:00 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 rose about 1.1% to 4346.
-VIX fell about 7% to 21.30.
-The yield on the 10-year Treasury rose to 1.529%.
The S&P 500 chart suggests that the pullback is over,
but I am not able to confirm it. The Index retested its prior low Monday and
bounced up today. My technical basket of internals didn’t improve at Monday’s
low so it is questionable whether the pullback really is over. The market
doesn’t always listen to me, so I’m looking at other indicators.
There were 2 Bottom Indicators that flashed “Buy” 2 weeks
ago (21 and 22 Sept). Both RSI and Bollinger Bands were oversold. Also on 21 September, we saw a successful
retest of the prior low followed by high up-volume days on 22 and 23 September –
very bullish signs; but then there was a reversal down. Given the chart signs it is possible that the pullback
has ended.
The daily sum of 20 Indicators improved from +1 to +2 (a
positive number is bullish; negatives are bearish); the 10-day smoothed sum
that smooths the daily fluctuations improved from -44 to -32 (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 is bearish; Volume, Price & Sentiment
indicators are neutral.
I suspect the pullback may have
ended, but I can’t be sure. Futures are falling as I write this so perhaps not! I am going to watch the market action for more
clues.
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 BULLISH 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.
