“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
JOBLESS CLAIMS (CNBC)
“The total of Americans submitting jobless claims fell
sharply last week as enhanced federal unemployment benefits wound down, the
Labor Department reported Thursday. Initial filings for unemployment benefits
totaled a seasonally adjusted 326,000 for the week ended Oct. 2...” Story at...
https://www.cnbc.com/2021/10/07/us-jobless-claims.html
STOCK MARKET DISCOUNTING AN EARNINGS RECESSION? (Felder
Report)
“With inflation pressures continuing to rise even as
record amounts of fiscal stimulus begin to wear off and the economy clearly
slows, however, an earnings recession over the next several quarters should
also come as no surprise. In fact, that is exactly what the recent action in
interest rates, oil prices and the dollar now point to.” Commentary at...
SCIENCE CLOSES IN ON COVID ORIGINS (WSJ)
“Based on experience with SARS-1 in 2003 and MERS in
2012, we know that many people are infected by a host animal long before a
coronavirus mutates to the point where it can jump from human to human. An
extensive data set from late 2019—more than 9,000 hospital samples—is available
of people exhibiting flulike (thus Covid-like) symptoms in China’s Hubei and
Shaanxi provinces before the epidemic started... World Health Organization
investigation analyzed those stored samples and found zero pre-pandemic infections. This is powerful
evidence favoring the lab-leak theory.” Opinion at...
https://www.wsj.com/articles/covid-19-coronavirus-lab-leak-virology-origins-pandemic-11633462827
My cmt: This piece included significant other evidence
that strongly suggests a lab-leak origin.
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website as
of 6:30 PM Thursday. 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
-Thursday the S&P 500 rose about 0.8% to 4400.
-VIX fell about 7% to 19.54.
-The yield on the 10-year Treasury rose to 1.577%.
PULLBACK DATA
Days since Top: 27 days; Average correction length for
corrections <10% = 33
Drop from the Top: 5.2% max; 3% at today’s close. Average
total correction decline (top to bottom) over the last 10-years = 13%, ignoring
major crashes.
The Index closed well above its 100-dMA and that’s the
third day in a row. That’s a bullish sign,
but the trend remains down based on the chart. The S&P 500 bounced up to
its upper trend line and closed just below it.
The upper trend line is falling so, without a trend line break, the
trend remains down. If the S&P 500 closes up tomorrow, that woud break the downtrend.
The 40-dMA of new-highs is also falling and that’s
another trend signal telling us the trend remains down.
The 50-day percentage of issues advancing on the NYSE remains
below 50%, but just barely.
The Index is 0.9% below its 50-dMA. If the Index can close above that point we
could see increased buying.
The daily sum of 20 Indicators remained -5 (a positive
number is bullish; negatives are bearish); the 10-day smoothed sum that smooths
the daily fluctuations declined from -34 to -36 (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.
The Short-term, market-internals
indicator turned bearish. It’s hard to buy when this indicator is negative.
If I see a couple of trend
indicators flip to the Bull side, I’d probably be a buyer. Otherwise, I am still
watching the market action/indicators. Friday’s rundown of indicators should be
interesting.
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
THURSDAY MARKET INTERNALS
(NYSE DATA)
Market Internals declined to
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 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.
