“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
UPDATE: CHARTS HAVE BEEN ADDED.
PAYROLL REPORT / UNEMPLOYMENT RATE (CNBC)
“The U.S. economy created far fewer jobs than expected in
November, in a sign that hiring started to slow even ahead of the new Covid
threat, the Labor Department reported Friday. Nonfarm payrolls increased by
just 210,000 for the month, though the unemployment rate fell
sharply to 4.2% from 4.6%...” Story at...
https://www.cnbc.com/2021/12/03/jobs-report-november-2021.html
FACTORY ORDERS (WTVB/Reuters)
“New orders for U.S.-made goods increased more than
expected in October and businesses spending on equipment appeared to rebound
after declining in the third quarter. The Commerce Department said on Friday
that factory orders increased 1.0% in October.” Story at...
https://wtvbam.com/2021/12/03/u-s-factory-orders-rise-more-than-expected-in-october/
ISM NON-MANUFACTURING INDEX (PRnewswire)
“Economic activity in the services sector grew
in November for the 18th month in a row — with the Services PMI® setting a
record for the fifth time in 2021 — say the nation's purchasing and supply
executives in the latest Services ISM® Report On Business®...According
to the Services PMI®, all 18 services industries reported growth...Demand
continues to outpace supply that has been impacted by capacity constraints,
shortages of labor and materials, and logistical challenges. This has also
caused demand-pull inflation that is affecting overall business conditions."
Story at...
INVESTORS AROUND THE WORLD ARE DITCHING THE MARKETS (Business
Insider)
“Not to alarm you — and please don't call your wealth manager immediately after reading this — but the entire world is going to cash. Bank of America Merrill Lynch (BAML) sent around a report tracking global fund flows, and since the second half of last year, cash has been the most popular asset in the world."
Commentary and charts at...
https://www.businessinsider.com/bank-of-america-flow-show-going-to-cash-2016-1
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website
as of 6:00 PM Friday. 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.
I suspect the slight downturn in the chart on the moving averages may be a fakeout that results from weak reporting over the 4 -day Thanksgiving holiday period. We’ll see. It looks like it is starting to move up again.
-Friday the S&P 500 fell about 0.8% to 4538.
-VIX rose about 10% to 30.67.
-The yield on the 10-year Treasury slipped to 1.357%.
We didn’t get a lower-low today, so this correction is
likely not over. Breadth got worse, further reinforcing that view.
The Friday run-down of some important indicators remained
sharply to the bear side (20-bear and 2-bull) and was more bearish than last
Friday. These indicators tend to be both long-term and short-term, so they are
different than the 20 that I report on daily. Details follow:
BULL SIGNS
-The smoothed advancing volume on the NYSE is rising.
-Overbought/Oversold Index (Advance/Decline Ratio) is oversold.
NEUTRAL
-3.5% of all issues traded on the NYSE made new, 52-week
highs when the S&P 500 made a new all-time-high, 18 November. This is close
to bearish, but is Neutral. (There is no bullish signal for this indicator.)
-The S&P 500 has had 3 Distribution Days in the last
25-days (including today) – Neutral.
-The S&P 500 is 5.4% above its 200-dMA (Bear
indicator is 12%.). This value was 15.9% above the 200-dMA when the 10%
correction occurred in Sep 2020.
-Bollinger Bands are close to oversold, but not there yet.
-Breadth on the NYSE compared to the S&P 500 index.
-RSI is close to oversold, but remains neutral.
-The size of up-moves has been smaller than the size of
down-moves over the last month, but not enough to send a signal.
-1 December, the 52-week, New-high/new-low ratio improved
by 0.28 standard deviations, somewhat bullish, but Neutral.
-There have been 10 up-days over the last 20 sessions –
Neutral.
-There have been 4 up-days over the last 10-sessions –
Neutral.
-Non-crash Sentiment indicator is very bearish, but not
enough to send a bullish signal.
-The Fosback High-Low Logic Index is neutral.
BEAR SIGNS
-There have been 6 Statistically-Significant days (big
moves in price-volume) in the last 15-days. This can be a bull or bear. With
the index below its 50-dMA, let’s call it bear. Also, the back & forth
movement we’ve seen is more indicative of a top than a bottom.
-The 10-dMA % of issues advancing on the NYSE
(Breadth) is below 50%.
-The 50-dMA % of issues advancing on the NYSE (Breadth)
is above 50%.
-The 100-dMA % of issues advancing on the NYSE
(Breadth) is below 50%
-MACD of the percentage of issues advancing on the NYSE
(breadth) made a bearish crossover 11 November.
-MACD of S&P 500 price made a bearish crossover, 15
November.
-My Money Trend indicator is falling.
-Long-term new-high/new-lows are falling.
-Short-term new-high/new-low data is falling.
-The Smart Money (late-day action) is headed down. (This
indicator is based on the Smart Money Indicator developed by Don Hayes).
-The Calm-before-the-Storm Indicator was warning; now we’ve
seen 2 Panic Indicators 26 & 30 November suggesting more downside to come.
-VIX is rising sharply.
-More than 90% of the volume was down-volume on 26 Nov &
again on 30 Nov. While those days didn’t
quite meet all of the tests for a bearish, high down-volume day, they were
close enough. The 2 high Down-volume days confirm the down-trend. A high up-volume
would give us a bullish sign and suggest an end to the correction.
-Cyclical Industrials (XLI-ETF) are under-performing the
S&P 500.
-The 5-10-20 Timer System is SELL; the 5-dEMA and 10-dEMA
are both BELOW the 20-dEMA.
-McClellan Oscillator.
-Slope of the 40-dMA of New-highs is down. This is one of
my favorite trend indicators.
-There were 5 Hindenburg Omen signals 17-24 November. These won’t be canceled until the McClellan
Oscillator turns positive.
-The S&P 500 is under-performing the Utilities
ETF (XLU).
-42% of the 15-ETFs that I track have been up over the
last 10-days.
On Friday, 21 February, 2 days after the top of the
Coronavirus pullback, there were 10 bear-signs and 1 bull-sign. Now there
are 20 bear-signs and 2 bull-signs. Last week, there were 16 bear-signs and
4 bull-signs.
The daily sum of 20 Indicators improved from -15 to – 13
(a positive number is bullish; negatives are bearish); the 10-day smoothed sum
that smooths the daily fluctuations declined from -119 to -124 (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 SELL. VIX & Volume are bearish; Price &
Sentiment are Neutral. This
indicator ensemble doesn’t mean much now. I am looking at other indicators for
a buy signal. The Long-Term Ensemble is
good on the sell side, but it can be slow to give buy signals.
I remain bearish – no bottom
yet.
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
FRIDAY MARKET INTERNALS (NYSE
DATA)
Market Internals remained 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’ll be a buyer when we can
see an end to the current weakness.
My stock-allocation in the
portfolio is now about 35% invested in stocks; this is well below my “normal”
fully invested stock-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.
