“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
Markets are closed for Thanksgiving – Have a great
Holiday! Friday hours will be half-day.
FOMC MINUTES (SeekingAlpha)
“‘Various participants noted that the committee should be
prepared to adjust the pace of asset purchases and raise the target range for
the federal funds rate sooner than participants currently anticipated if
inflation continued to run higher than levels consistent with the committee’s
objectives...’ In the past week, several Fed leaders have said they're open to
a quicker pace of tapering if inflation stays high and job growth continues to
improve...” Story at...
https://seekingalpha.com/news/3774352-some-federal-reserve-officials-sought-a-quicker-taper-fomc-minutes
JOBLESS CLAIMS / GDP-2ND ESTIMATE / DURABLE ORDERS (CNBC)
“Initial jobless claims totaled 199,000 last week, the
lowest total since November 1969...Second-quarter GDP growth was revised
slightly higher to 2.1%, a bit below estimates...Orders for long-lasting goods
fell 0.5% for the month, below the expectation for a small gain.” Story at...
PCE PRICES / PERSONAL SPENDING (FOXBusiness)
“Prices soared by 5% in the year through October,
according to the Personal Consumption Expenditures price index data released
Wednesday morning...becoming the fastest pace increase since
November 1990...Household spending, meanwhile, climbed 1.3% in
October from a month earlier, while personal income increased 0.5%...” Story
at...
https://www.foxbusiness.com/economy/federal-reserve-inflation-gauge-high-prices-continue-soar
NEW HOME SALES (YahooFinance)
“U.S. sales of new homes edged up 0.4% last month, coming
in below expectations as housing prices continued to climb.” Story at...
https://news.yahoo.com/us-homes-sales-rise-0-152730440.html
EIA CRUDE INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those
in the Strategic Petroleum Reserve) increased by 1.0 million barrels from the
previous week. At 434.0 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
FLAWED IVERMECTIN STUDY CALLS INTO QUESTION THE VALUE OF
IVERMECTIN (Nature)
“Throughout the pandemic, the anti-parasite drug
ivermectin has attracted much attention, particularly
in Latin America, as a potential way to treat COVID-19. But
scientists say that recent, shocking revelations of widespread flaws in the
data of a preprint study reporting that the medication greatly reduces COVID-19
deaths dampens ivermectin’s promise — and highlights the challenges of
investigating drug efficacy during a pandemic...The paper summarized the
results of a clinical trial seeming to show that ivermectin can reduce COVID-19
death rates by more than 90%1 —
among the largest studies of the drug’s ability to treat COVID-19 to date. But
on 14 July, after internet sleuths raised concerns about plagiarism and
data manipulation, the preprint server Research Square withdrew the paper
because of “ethical concerns”.” Story at...
https://www.nature.com/articles/d41586-021-02081-w
I posted a link to a piece in the American Journal of
Therapeutics, 1 September, that described Ivermectin as a wonder drug. That report must be taken with a grain of
salt given the new revelations.
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 0.2% to 4701.
-VIX dropped about 4% to 18.58.
-The yield on the 10-year Treasury rose to 1.641%.
There was another Hindenburg Omen today and that makes 5
in the last 6 sessions. My Calm-Before-the-Storm indicator is still predicting
a one day drop of 1 to 3% within the next several weeks. All-in-all though, it
looked like there were more bull signs creeping in the mix. I’m curious what
tomorrow’s Friday run-down will show.
The daily sum of 20 Indicators improved from -9 to -2 (a
positive number is bullish; negatives are bearish); the 10-day smoothed sum
that smooths the daily fluctuations declined from -54 to -61 (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 tend to bounce around a lot.
The Long Term NTSM indicator
ensemble remained BUY. VIX & Price are bullish; Volume & Sentiment are
neutral...But I am suspicious that the BUY signal is just a moving average
anomaly in the VIX number – the days being dropped in the calculation were
worse than today, but that doesn’t mean today’s value for VIX is good news. VIX
is rising and that’s generally bearish.
Based on indicators, it still
looks like markets are in a pullback; on a price basis – not so much.
I am bearish in the short-term
based on last Friday’s indicator run-down. In the long-term, it seems unlikely
that a major crash is coming soon, but it is not impossible. (Trading will be
half-day Friday, and I’ll post the Friday indicator run-down as usual on
Friday.)
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 improved 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.
I did take profits in the
Energy ETF (XLE) and Salesforce (CRM) as I indicated previously. This has temporarily dropped my stock
allocation. I’ll be a buyer as soon as
we can see an end to the current weakness in indicators.
My stock-allocation in the
portfolio is now about 35% invested in stocks; this is well my “normal” fully
invested stock-allocation and is probably overly conservative.
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.
