“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
FED BEIGE BOOK (nasdaq.com)
“Economic activity in the U.S. has expanded modestly since early September, according to the Federal Reserve's Beige Book, although the report noted conditions varied across industries and districts. The Beige Book, a compilation of anecdotal evidence on economic conditions in each of the twelve Fed districts, said four districts saw flat activity and two cited declines, with slowing or weak demand attributed to higher interest rates, inflation, and supply disruptions.”
https://www.nasdaq.com/articles/feds-beige-book-says-u.s.-economy-expanded-modestly-notes-some-easing-of-price-growth
HOUSING STARTS / BUILDING PERMITS (HW Media)
“As mortgage rates rose to nearly 7% and builder sentiment dipped to painfully low levels in September, housing starts also declined, dropping 8.1% from August... multifamily building permits were issued at a seasonally adjusted annual rate of 644,000, up 8.2% month over month and 25.5% year over year. Meanwhile, single-family building permits were issued at a rate of 872,000, down 3.1% from August and 17.3% from a year ago.” Story at...
https://www.housingwire.com/articles/housing-starts-slide-but-there-are-reasons-for-optimism/
EIA CRUDE INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 1.7 million barrels from the previous week. At 437.4 million barrels, U.S. crude oil inventories are about 2% below the five year average for this time of year.” Report at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf
OPPENHEIMER BULLISH ON EQUITIES (CNBC)
“Those looking for positive signs will be glad to hear Oppenheimer’s Chief Investment Strategist John Stoltzfus' take on the matter.
‘Our view remains bullish on equities as the stocks of many solid companies look grossly oversold as a result of extreme negativity that is evidenced in polls of investment professionals and private investors and in the day to day volatility in the markets,’ Stoltzfus said.” Story at...
https://finance.yahoo.com/news/remain-bullish-equities-many-solid-231406804.html
My cmt: I’m glad someone agrees with me.
SUPREME COURT TO BLOCK BIDEN TRILLION DOLLAR STUDENT LOAN
GIVE AWAY? (CNBC)
“The Supreme Court on Wednesday was asked to block the Biden administration’s student loan debt relief program, which is set to take effect this weekend. The Brown County Taxpayers Association, a Wisconsin group, directed the emergency application to delay implementation of the debt relief plan to Justice Amy Coney Barrett, who is responsible for handling such requests from the 7th federal appeals court circuit, which contains that state.” Story at...
https://www.cnbc.com/2022/10/19/supreme-court-asked-to-block-bidens-student-loan-forgiveness-plan.html
My cmt: The Executive Branch, including the President, does not have the authority under the Constitution to unilaterally cancel debts owed to the US. That is the purview of Congress. This just continues a long line of Presidents who have tried to usurp Congressional powers. The sad thing is that Congress has lacked the honesty to challenge the President, because in recent cases, Congress has been held by the same political party as the President. Biden’s illegal actions are no different from when Trump illegally diverted funds to build the Border Wall, although Congress did eventually fund the wall. For more, see here...
https://jonathanturley.org/2022/09/02/college-loan-forgiveness-plan-reveals-bidens-constitutional-cynicism/
BTW, the Wharton School of Business estimated the cost of
the give-away at a Trillion dollars; NPR estimates “only” $400 billion. Could NPR
be biased?????
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 dipped about 0.7% to 3695.
-VIX rose about 0.9% to 30.76.
-The yield on the 10-year Treasury was still 4.139%.
PULLBACK DATA:
-Drop from Top: 23% as of today. 25.4% max (on a closing basis).
-Trading Days since Top: 199-days.
The S&P 500 is 10.9% Below its 200-dMA & 5.4% Below its 50-dMA.
*I won’t call the correction over until the S&P 500 makes a new-high; however, evidence suggests the bottom was / is in the 3600 area and I am fully invested with a higher percentage of stocks than normal.
MY TRADING POSITIONS:
XLI – Industrial ETF
QLD – 2x Nas 100
DDM – 2x Dow 30
XLK – Technology ETF
CVX – (I may hold this as a long-term position. I already
owned a small position in CVX.)
SPY – S&P 500 (This is really a long-term position.)
IWM - Russell 2000. (This is really a long-term position.)
TODAY’S COMMENT:
While the bottom signal looked very strong on 27 September, there are concerns showing up now. When looking a other major bottoms, specifically the March 2009 retest (Financial Crisis bottom) and the Covid crash bottom in March of 2020, breath was higher than it is now.
In 2009, the percentage of stocks advancing over the 10-days
prior to the retest bottom (10-day Breadth) was 50% at the bottom. During the
Covid Bear market, definitely an odd correction due to its speed down and back,
10-day Breadth recovered to 56% just 3 days after the bottom. Now the 10-day
breadth is languishing at 44% five trading-days after the bottom.
10-day Breadth is higher now than it was at the September
lows; that’s good, but we really need to see breadth improve, or we’ll have to
sweat a decline to the prior lows.
Curious that XLU (Utilities – ETF) was sold hard today. It
doesn’t look like investors are that worried. If they were, they wouldn’t
be selling XLU.
Today, the daily sum of 20 Indicators dipped from +4 to +3
(a positive number is bullish; negatives are bearish); the 10-day smoothed sum
that smooths the daily fluctuations dropped from +56 to +52. (The trend
direction is more important than the actual number for the 10-day value.) These
numbers sometimes change after I post the blog based on data that comes in
late. Most of these 20 indicators are short-term so they tend to bounce
around a lot.
LONG-TERM INDICATOR: The Long
Term NTSM indicator remained to HOLD: VIX is bearish; PRICE & SENTIMENT are
bullish; VOLUME is neutral.
Bottom line: I’m a Bull: I’m now invested with about 75%
of the portfolio invested in stocks. I added a leveraged long position (QLD –
2xNas 100) and XLI (Industrial ETF) 18 Oct based on strong bullish signs. (As a
retiree, 50% invested in stocks is my “normal” portfolio.) 75% stocks is
uber-bullish and that’s as far as I’ll go.
BEST ETFs - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily)
ETF ranking follows:
The top ranked ETF receives 100%. The rest are then ranked based on their momentum relative to the leading ETF.
#1. XLE #2. IBB #3. ITA
*For additional background on the ETF ranking system see NTSM Page at…
http://navigatethestockmarket.blogspot.com/p/exchange-traded-funds-etf-ranking.html
BEST DOW STOCKS - TODAY’S MOMENTUM
RANKING OF THE DOW 30 STOCKS (Ranked Daily)
DOW 30 momentum ranking follows:
#1. AMGN #2. CVX #3. MRK
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)
My basket of Market Internals remained SELL.
(Market Internals are a decent trend-following analysis of current market action, but should not be used alone for short term trading. They are most useful when they diverge from the Index.)
...My current invested
position is about 75% stocks, including stock mutual funds and ETFs. I’m
usually about 50% invested in stocks. I’ll cut back on stocks if we see serious
bear signs.
I trade about 15-20% of the
total portfolio using the momentum-based analysis I provide here. If I can see
a definitive bottom, I’ll add a lot more stocks to the portfolio using an
S&P 500 ETF.
“Economic activity in the U.S. has expanded modestly since early September, according to the Federal Reserve's Beige Book, although the report noted conditions varied across industries and districts. The Beige Book, a compilation of anecdotal evidence on economic conditions in each of the twelve Fed districts, said four districts saw flat activity and two cited declines, with slowing or weak demand attributed to higher interest rates, inflation, and supply disruptions.”
https://www.nasdaq.com/articles/feds-beige-book-says-u.s.-economy-expanded-modestly-notes-some-easing-of-price-growth
“As mortgage rates rose to nearly 7% and builder sentiment dipped to painfully low levels in September, housing starts also declined, dropping 8.1% from August... multifamily building permits were issued at a seasonally adjusted annual rate of 644,000, up 8.2% month over month and 25.5% year over year. Meanwhile, single-family building permits were issued at a rate of 872,000, down 3.1% from August and 17.3% from a year ago.” Story at...
https://www.housingwire.com/articles/housing-starts-slide-but-there-are-reasons-for-optimism/
“U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 1.7 million barrels from the previous week. At 437.4 million barrels, U.S. crude oil inventories are about 2% below the five year average for this time of year.” Report at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf
“Those looking for positive signs will be glad to hear Oppenheimer’s Chief Investment Strategist John Stoltzfus' take on the matter.
‘Our view remains bullish on equities as the stocks of many solid companies look grossly oversold as a result of extreme negativity that is evidenced in polls of investment professionals and private investors and in the day to day volatility in the markets,’ Stoltzfus said.” Story at...
https://finance.yahoo.com/news/remain-bullish-equities-many-solid-231406804.html
My cmt: I’m glad someone agrees with me.
“The Supreme Court on Wednesday was asked to block the Biden administration’s student loan debt relief program, which is set to take effect this weekend. The Brown County Taxpayers Association, a Wisconsin group, directed the emergency application to delay implementation of the debt relief plan to Justice Amy Coney Barrett, who is responsible for handling such requests from the 7th federal appeals court circuit, which contains that state.” Story at...
https://www.cnbc.com/2022/10/19/supreme-court-asked-to-block-bidens-student-loan-forgiveness-plan.html
My cmt: The Executive Branch, including the President, does not have the authority under the Constitution to unilaterally cancel debts owed to the US. That is the purview of Congress. This just continues a long line of Presidents who have tried to usurp Congressional powers. The sad thing is that Congress has lacked the honesty to challenge the President, because in recent cases, Congress has been held by the same political party as the President. Biden’s illegal actions are no different from when Trump illegally diverted funds to build the Border Wall, although Congress did eventually fund the wall. For more, see here...
https://jonathanturley.org/2022/09/02/college-loan-forgiveness-plan-reveals-bidens-constitutional-cynicism/
-Wednesday the S&P 500 dipped about 0.7% to 3695.
-VIX rose about 0.9% to 30.76.
-The yield on the 10-year Treasury was still 4.139%.
-Drop from Top: 23% as of today. 25.4% max (on a closing basis).
-Trading Days since Top: 199-days.
The S&P 500 is 10.9% Below its 200-dMA & 5.4% Below its 50-dMA.
*I won’t call the correction over until the S&P 500 makes a new-high; however, evidence suggests the bottom was / is in the 3600 area and I am fully invested with a higher percentage of stocks than normal.
XLI – Industrial ETF
QLD – 2x Nas 100
DDM – 2x Dow 30
XLK – Technology ETF
SPY – S&P 500 (This is really a long-term position.)
IWM - Russell 2000. (This is really a long-term position.)
While the bottom signal looked very strong on 27 September, there are concerns showing up now. When looking a other major bottoms, specifically the March 2009 retest (Financial Crisis bottom) and the Covid crash bottom in March of 2020, breath was higher than it is now.
TODAY’S RANKING OF 15 ETFs (Ranked Daily)
ETF ranking follows:
The top ranked ETF receives 100%. The rest are then ranked based on their momentum relative to the leading ETF.
#1. XLE #2. IBB #3. ITA
*For additional background on the ETF ranking system see NTSM Page at…
http://navigatethestockmarket.blogspot.com/p/exchange-traded-funds-etf-ranking.html
DOW 30 momentum ranking follows:
#1. AMGN #2. CVX #3. MRK
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
(Market Internals are a decent trend-following analysis of current market action, but should not be used alone for short term trading. They are most useful when they diverge from the Index.)
