"Republicans played a dangerous and risky partisan
game, and I am glad that their brinksmanship did not work...Despite immense
opposition from Leader McConnell and members of his conference, our caucus held
together and we pulled our country back from the cliff's edge that Republicans
tried to push us over." – Senator Chuck Schumer (D).
Brinksmanship? The Democrats have the votes to raise the
Debt Ceiling through reconciliation; they used reconciliation to pass the
$1.9-trillion American Rescue Plan in March of 2021, but they accuse
Republicans of brinksmanship? Come on man!
SUPPLY CHAIN DISRUPTION (FactSet)
“While
the majority of S&P 500 companies will report earnings results for Q3 2021
over the next few weeks, about 4% of the companies in the index (21 companies)
have already reported earnings results for the third quarter (through October
7)...15 (or 71%) have discussed a negative impact from [supply chain
disruptions].” Story at...
IS THE GREAT “BEAR MARKET” OF 2021 FINALY OVER? (Real
Investment Advice)
“The rally back above the 100-dma on Friday was strong and
sets up a retest of the 50-dma. If the market can cross that barrier we
will trigger the seasonal MACD buy signal suggesting the bull market remains
intact for now...[however]...as we head into the last quarter
of the year and 2022, the slower economic growth rates will coincide with
corporations’ weaker revenue and earnings growth... Odds [are] Increasing We’ve
Seen The Highs For This Year...The GDPNow model estimate for
real GDP growth (seasonally adjusted annual rate) in the third quarter of 2021
is 1.3 percent on October 5, down from 2.3 percent on
October 1. “ – Lance Roberts,
Commentary at...
https://realinvestmentadvice.com/is-the-great-bear-market-of-2021-finally-over-10-08-21/
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website
as of 5:00 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 0.7% to 4361.
-VIX rose about 7% to 20.00.
-The yield on the 10-year Treasury was 1.613% Friday.
Bond markets were closed today for Columbus Day.
PULLBACK DATA
Days since Top: 29 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.
As of today, the S&P 500 has had 6 distribution-days
in the last 5 weeks; my VIX indicator slipped back into a bear warning; and the
50-dMA of the % of issues advancing on the NYSE remains below 50%. These are
just a couple indicators that suggest the pullback is not over.
One good sign for the Bulls; the XLU-ETF (Utilities) underperformed
the S&P 500 today. If investors were
really worried, they would be buying the XLU, not selling.
Looking at the chart below, we see that the Index has
failed to break above its upper trendline on several occasions. Now, the Index
is sitting at its 100-dMA. That’s
another important area for traders. If
the Index fails to hold the 100-day, we’ll probably see a retest of the current
not-very-low of 4300.
The daily sum of 20 Indicators declined +2 to -5 (a
positive number is bullish; negatives are bearish); the 10-day smoothed sum
that smooths the daily fluctuations declined from -33 to -41 (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 remain bearish until we see more bullish indications.
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 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.
