FOMC RATE DECISION (CNBC)
“Federal Reserve Chair Jerome Powell’s comments were quite hawkish, which means the Fed still has a way to go to fight inflation, said Jack McIntyre, portfolio manager at Brandywine Global. The level of interest rates will also be higher than previously expected, he said. ‘There were no hints of dovishness to indicate the Fed may be poised to pause,’ McIntyre pointed out.” Story at...
https://www.cnbc.com/2022/11/02/real-time-updates-of-big-fed-rate-hike-and-jerome-powells-news-conference.html
The language in the FED press release was slightly dovish and markets moved higher by 1% or so after the initial release. Chairman Powell squashed the optimism during his press conference. He said, “It is very premature to be thinking about pausing. People when they hear ‘lags’ think about a pause. It is very premature, in my view, to think about or be talking about pausing our rate hikes. We have a ways to go...”
ADP EMPLOYMENT (ADP)
“Employers created 239,000 jobs in October, up from a revised 192,000 in September as restaurants, retailers and the travel sector ramped up hiring in advance of the year-end holidays. ‘This is a really strong number given the maturity of the economic recovery, but the hiring was not broad-based. Goods producers, which are sensitive to interest rates, are pulling back, and job changers are commanding smaller pay gains. While we're seeing early signs of Fed-driven demand destruction, it's affecting only certain sectors of the labor market.’” Press release from ADP at...
https://adpemploymentreport.com/
EIA CRUDE INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 3.1 million barrels from the previous week. At 436.8 million barrels, U.S. crude oil inventories are about 3% below the five-year average for this time of year...” Report at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 dropped about 2.5% to 3760.
-VIX was little changed to 25.86.
-The yield on the 10-year Treasury rose to 4.105%.
PULLBACK DATA:
-Drop from Top: 21.6% as of today. 25.4% max (on a closing basis).
-Trading Days since Top: 210-days.
The S&P 500 is 8.3% Below its 200-dMA & 1.6% 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.)
TODAY’S COMMENT:
VIX was unchanged. Let me get this straight. The S&P 500 was down 2.5% and the VIX was unchanged?!! The Options crowd is not buying (or should I say selling?) today’s selloff. We’ll have to see market action in the next couple of days to decide whether to take some chips off the table. VIX certainly didn’t confirm that the rally is over.
Still, it was not a good day on several fronts:
-The S&P 500 dropped below its 50-dMA.
-Another bearish sign popped up that I didn’t like to see. The 10-day Fosback New-Hi/New-low Logic Index gave a bearish signal. This indicator hasn’t been bearish since April. It initially turned bearish 8 days after the top of this current downturn. Basically, this indicator is bearish because both new-highs and new-lows are elevated. This is a short-term indicator and is not suggesting that there is a crash coming, but possibly, a return to the prior lows.
On a positive note, the S&P 500 is lagging Breadth enough
to give a buy signal. This indicator called the recent bottoms in June and
September. Further, today, Wednesday, was a statistically significant down-day.
That just means that the price-volume move exceeded my statistical parameters.
Statistics show that a statistically-significant, down-day is followed by an up-day
about 60% of the time.
Today, the daily sum of 20 Indicators declined from +8 to
+7 (a positive number is bullish; negatives are bearish); the 10-day smoothed
sum that smooths the daily fluctuations improved from +115 to +119. (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 declined to HOLD: VOLUME, SENTIMENT & VIX are neutral;
PRICE is bullish.
Bottom line: I’m a still a Bull, but let’s see what
happens in the next few sessions. I may take profits in DDM and maybe CVX.
We’ll see.
I’m now invested with about 75% of the portfolio invested
in stocks. (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.
*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:
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 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 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. It may be time to take profits...we’ll see.
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.
“Federal Reserve Chair Jerome Powell’s comments were quite hawkish, which means the Fed still has a way to go to fight inflation, said Jack McIntyre, portfolio manager at Brandywine Global. The level of interest rates will also be higher than previously expected, he said. ‘There were no hints of dovishness to indicate the Fed may be poised to pause,’ McIntyre pointed out.” Story at...
https://www.cnbc.com/2022/11/02/real-time-updates-of-big-fed-rate-hike-and-jerome-powells-news-conference.html
The language in the FED press release was slightly dovish and markets moved higher by 1% or so after the initial release. Chairman Powell squashed the optimism during his press conference. He said, “It is very premature to be thinking about pausing. People when they hear ‘lags’ think about a pause. It is very premature, in my view, to think about or be talking about pausing our rate hikes. We have a ways to go...”
“Employers created 239,000 jobs in October, up from a revised 192,000 in September as restaurants, retailers and the travel sector ramped up hiring in advance of the year-end holidays. ‘This is a really strong number given the maturity of the economic recovery, but the hiring was not broad-based. Goods producers, which are sensitive to interest rates, are pulling back, and job changers are commanding smaller pay gains. While we're seeing early signs of Fed-driven demand destruction, it's affecting only certain sectors of the labor market.’” Press release from ADP at...
https://adpemploymentreport.com/
“U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 3.1 million barrels from the previous week. At 436.8 million barrels, U.S. crude oil inventories are about 3% below the five-year average for this time of year...” Report at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf
-Wednesday the S&P 500 dropped about 2.5% to 3760.
-VIX was little changed to 25.86.
-The yield on the 10-year Treasury rose to 4.105%.
-Drop from Top: 21.6% as of today. 25.4% max (on a closing basis).
-Trading Days since Top: 210-days.
The S&P 500 is 8.3% Below its 200-dMA & 1.6% 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
VIX was unchanged. Let me get this straight. The S&P 500 was down 2.5% and the VIX was unchanged?!! The Options crowd is not buying (or should I say selling?) today’s selloff. We’ll have to see market action in the next couple of days to decide whether to take some chips off the table. VIX certainly didn’t confirm that the rally is over.
Still, it was not a good day on several fronts:
-The S&P 500 dropped below its 50-dMA.
-Another bearish sign popped up that I didn’t like to see. The 10-day Fosback New-Hi/New-low Logic Index gave a bearish signal. This indicator hasn’t been bearish since April. It initially turned bearish 8 days after the top of this current downturn. Basically, this indicator is bearish because both new-highs and new-lows are elevated. This is a short-term indicator and is not suggesting that there is a crash coming, but possibly, a return to the prior lows.
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.
http://navigatethestockmarket.blogspot.com/p/exchange-traded-funds-etf-ranking.html
DOW 30 momentum ranking follows:
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.)
