“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
Pearl Harbor - Dec. 7, 1941
-Death toll: 2,400 military service personnel
-Wounded: 1,700
PRODUCTIVITY (CNN)
“US labor market productivity tanked in the third
quarter. Paychecks grew and the number of hours worked jumped, but workers'
output increased only at a moderate pace...the productivity drop was even worse
than feared, falling 5.2% on a seasonally adjusted basis. That's the steepest
decline in the quarterly rate since the second quarter of 1960 when
productivity fell 6.1%.” Story at...
https://www.cnn.com/2021/12/07/economy/labor-productivity-third-quarter-revised/index.html
GOLDMAN HAS BAD NEWS FOR DIP BUYERS (YahooFinance)
“Goldman Sachs Group Inc. is issuing words of caution for
dip buyers plunging back into stocks: The December volatility breakout has room
to run -- and risk gauges aren’t yet flashing buy signals... Meanwhile, a
Deutsche Bank AG gauge signals risk assets may be closing in on a bottom.”
Story at
https://finance.yahoo.com/news/goldman-sachs-bad-news-investors-140022485.html
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website as
of 5:00 PM Tuesday. 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.
Today’s big daily number of new cases is mostly due to
low reporting over the weekend. The
important point to note is that the moving averages have turned up – not a good
sign.
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 rose about 2.1% to 4687.
-VIX fell about 18% to 22.34.
-The yield on the 10-year Treasury rose to 1.476%.
No point in going thru indicators in detail today; the
up-volume and market action indicate that the correction is over. Up-volume was
85% of the volume and that makes back-to-back days with >80% up-volume. That’s the only indicator we need to call an
end to the weakness, but a lot of indicators shifted to the bull side.
The daily sum of 20 Indicators improved from -10 to -1 (a
positive number is bullish; negatives are bearish); the 10-day smoothed sum
that smooths the daily fluctuations improved from -122 to -111 (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 improved to HOLD. VIX, Volume, Price & Sentiment are Neutral.
I am bullish. We’ll just have to see how long the bullish
trend remains.
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
TUESDAY 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.
My stock-allocation in the
portfolio is now about 55% invested in stocks; this is slightly above my
“normal” fully invested stock-allocation of 50%. I plan to move to 65% invested
on stocks tomorrow.
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.
