“When Biden wakes up tomorrow [Wednesday] afternoon,
somebody’s gonna have to tell him he’s now officially presiding over the
collapse of the Democrat party.” - Donald Trump Jr.
My cmt: Perhaps, but I wouldn’t count the Democrats out.
It was only a few years ago that the pundits declared the Republican Party
dead.
“...that Republican Party is dead. It was wounded by the
tea party absolutists who insisted on political purity and rejected any
compromise. Now it has been killed by Donald Trump.” – Max Boot, LA Times, May
2016.
Biden won’t run in 2024. If Trump runs, Democrats are
still quite likely to retain the Presidency. In the mean time, there’s a good
chance that the House and Senate will swing more Republican in 2022.
FOMC RATE DECISION (CNBC)
“Powell says inflation is not caused by tight labor
market, does not see signs of wage-price spiral... ‘Our decision today to begin
tapering our asset purchases does not imply any direct signal regarding our
interest rate policy. We continue to articulate a different and more stringent
test for the economic conditions that would need to be met before raising the
federal funds rate,’ Federal Reserve Chairman Jerome Powell said.”
Story at...
ADP EMPLOYMENT CHANGE (ADP Employment
“Private-sector employment increased by 571,000 from
September to October, on a seasonally adjusted basis.” Report at...
https://adpemploymentreport.com/2021/October/NER/NER-October-2021.aspx
ISM NON-MANUFACTURING INDEX (ISM)
“Economic activity in the services sector grew in
October for the 17th month in a row — with the rate of expansion setting a
record for the fourth time in 2021 — say the nation's purchasing and supply
executives in the latest Services
ISM® Report On Business®.” Report at...
FACTORY ORDERS (kfgo/Reuters)
“New orders for U.S.-made goods unexpectedly rose in
September, though manufacturing remains constrained by input shortages. The
Commerce Department said on Wednesday that factory orders increased 0.2% in
September.” Story at...
https://kfgo.com/2021/11/03/u-s-factory-orders-unexpectedly-rise-in-september/
EIA CRUDE INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those
in the Strategic Petroleum Reserve) increased by 3.3 million barrels from the
previous week. At 434.1 million barrels, U.S. crude oil inventories are about
6% below the five year average for this time of year.” Report at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf
FED DENIAL ABOUT PERSISTENT INFLATION (msn.com)
"Inflation is persistent and you've got to start
thinking about moving your policies more aggressively towards tightening,"
the Bianco Research President told CNBC's "Trading
Nation" on Tuesday. "None of these central banks want to
do that. They're in denial that the markets are telling them that." Bianco
points to trading activity in bonds..."They're saying that you're behind
the curve." Story at...
Fed
is in denial about 'persistent' inflation, Wall Street forecaster Jim Bianco
warns (msn.com)
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website as
of 5:00 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.
The smoothed curves seem to be flattening out. That’s a
worrisome trend. We want continued
falling numbers. Instead, the 10-dMA of new cases has been stuck in the 70,000 -
80,000 range for the last 2 weeks.
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 rose about 0.7% to 4661.
-VIX dropped about 6% to 15.10.
-The yield on the 10-year Treasury rose to 1.606%.
Today was a down-day until the FED concluded its meeting
and chairman Powell gave his press conference. It was all up after that as the
S&P 500 made another new all-time high.
7.6% of all issues traded on the NYSE made new, 52-week
highs when the S&P 500 made a new all-time-high today. This is above the
average for all-time highs. 67% of issues on the NYSE were up today. Participation
is broadening out as the Index moves higher. That’s a good sign.
There are 2 topping warnings now in effect: RSI remains
overbought; and Breadth vs. the S&P 500 is suggesting that the S&P 500
is too far ahead of the % of issues advancing on the NYSE. That’s not enough
indicators to issue a sell signal. (Of course, the S&P 500 can have a top
without a sell-signal.)
The daily sum of 20 Indicators improved from +2 to +5 (a
positive number is bullish; negatives are bearish); the 10-day smoothed sum
that smooths the daily fluctuations declined from +4 to zero. (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. Price and Volume are bullish; Sentiment and VIX
indicators are neutral.
I remain bullish.
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
** XLE has outgained XLY over the
last 2 months so I will continue to hold XLE rather than switching to XLY.
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 BUY.
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 65% invested in stocks; this is above my “normal” fully invested
stock-allocation of 50% stocks. Indicators are very bullish, so I am holding a
short-term position in additional Index Funds to boost returns.
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.
