“When I watched Glenn Youngkin [Governor elect of
Virginia] last evening commit to provide funding for all five of our HBCUs [Historically
Black Colleges and Universities] in any budget he submitted to the legislature
if he were governor, it was historical. This is the first time any candidate
for governor has made this public commitment...The people
are not stupid; they are voting on issues and for those who speak to the issues
that impact their lives. Maybe Northam and McAuliffe will tell us why they have
not supported our HBCUs.” – Douglas Wilder, Former Governor of Virginia.
“Tuesday was another corrective, a reminder to the
Democratic Party that although few moderates remain in Washington, tens of
millions of them live outside the Beltway. They are paying attention and they
vote.” - Carl M. Cannon, Washington bureau chief for RealClearPolitics.
My cmt: I agree, but the
Democrats are getting the wrong message. They think passing the big “infrastructure”
bill with trillions more spending on social programs will help them. I believe
this situation is similar to Bill Clinton’s attempt to create a new healthcare
system. The House and Senate went to the
Republicans ending the healthcare plan at the mid-terms. After Barack Obama
passed Obamacare, Republicans took the House, Senate and eventually the Presidency.
I think passing the “infrastructure” bill will hurt Democrats as big spending
programs have hurt them in the past. Moderates (independents) determine
election winners – not partisans on either side.
JOBLESS CLAIMS (CNBC)
“The U.S. unemployment picture improved again last week,
with initial filings for unemployment insurance falling to another pandemic-era
low. First-time claims dropped to 269,000 for the week ended Oct. 30, down
14,000 from the previous period...” Story at...
https://www.cnbc.com/2021/11/04/us-weekly-jobless-claims.html
EARNINGS ESTIMATES ARE STILL TOO BULLISH (RIA)
“Earnings have indeed been impressive, but...this quarter
will likely mark the peak of growth for a while. One particular reason is
that while the outlook for earnings remains very bullish, economic growth and
inflation trends are not.
The problem for earnings is that weaker economic growth
and rising inflation will weigh on profit margins... Wall Street is notorious
for missing the major turning points of the markets and leaving investors
scrambling for the exits.”’ Commentary, charts and analysis at...
https://realinvestmentadvice.com/fundamentally-speaking-2022-earnings-estimates-still-too-bullish/
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website as
of 7:00 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.
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
-Thursday the S&P 500 rose about 0.4% to 4680.
-VIX rose about 2% to 15.10. Options players suspect the
markets are headed for a down day.
-The yield on the 10-year Treasury rose to 1.546%.
The S&P 500 has seen a long bull-run rising more than
9% since the small bottom on 4 October. As of Thursday, 8 out of the last 10 sessions
have been up-days and 15 of the last 20-sessions have been up. If tomorrow is
another up-day, it would be a bearish sign.
7.7% 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 and that’s a good sign. It suggests that if we do
have a pullback it is likely to be less than 10% down.
There is only 1 topping warning now in effect: RSI
remains overbought. A really big day tomorrow could change that by flipping
Bollinger Bands and a few other topping indicators. I doubt that will happen, but it could.
The daily sum of 20 Indicators declined from +5 to +2 (a
positive number is bullish; negatives are bearish); the 10-day smoothed sum
that smooths the daily fluctuations declined from zero to -1. (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, but the markets may be getting too
bullish.
I will be cutting back to my normal fully invested
position (50% in stocks) from my current position of 65% in stocks if topping
indicators or other important indicators warn.
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 gained 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
THURSDAY MARKET INTERNALS
(NYSE DATA)
Market Internals declined 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.
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.
