CPI ... Jobless Claims ... Best DOW Stocks ... Best ETFs … Stock Market Analysis ...

 
“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
CPI / CORE CPI (CNBC)
“October’s consumer price index rose just 0.4% for the month and 7.7% from a year ago, its lowest annual increase since January and a slowdown from the 8.2% annual pace in the prior month. Economists were expecting increases of 0.6% and 7.9%...Excluding volatile food and energy costs, so-called core CPI increased 0.3% for the month and 6.3% on an annual basis, also less than expected.” Story at...
https://www.cnbc.com/2022/11/09/stock-market-futures-open-to-close-news.html
 
JOBLESS CLAIMS (WSJ)
“U.S. worker filings for unemployment benefits rose last week but remained near historically low levels, in a sign many employers continue to hold on to their employees. Initial jobless claims, a proxy for layoffs, increased by 7,000 to a seasonally adjusted 225,000 last week, the Labor Department said Thursday. That is close to the prepandemic 2019 weekly average of 218,000...”Story at...
https://www.wsj.com/articles/jobless-claims-ticked-up-but-remained-historically-low-11668088210
 
CATASTROPHE IN CRYPTO (CoinDesk)

“Following on the heels of the Terra ecosystem collapse, the Celsius insolvency and the Three Arrows Capital blow up, the crypto industry fell into even greater turmoil this week after SBF’s crypto exchange FTX was forced to seek a bailout amid liquidity issues. While a non-binding deal with competitor Binance stemmed the panic for a short time Tuesday, things took an even darker turn after CoinDesk Wednesday morning reported that Binance was highly unlikely to go through with its proposed acquisition. By late Wednesday afternoon, Binance itself confirmed that the deal is off, sending crypto markets plunging even further, with bitcoin (BTC) sinking below $16,000 for the first time in two years.” Story at...
https://www.coindesk.com/business/2022/11/09/a-failed-ftx-binance-deal-is-catastrophic-for-crypto-sector/
The failure of the FTZ crypto exchange makes me wonder about “contagion”.  Is it possible that this could affect the banking industry, hedge funds or other companies that may have major crypto “investments”? We’ll see; I have no idea. (Regular readers may remember that I compared Bitcoin to the Beanie Baby craze a long time ago.)
 
TRUMP FAILED THE GOP (National Review)
“Trump is a loser. He squeaked past the most unpopular woman in America in 2016, he presided over a blue wave in 2018, he lost to a barely breathing Joe Biden in 2020, and he hand-picked a bevy of losing Republican nominees in 2022. Ron DeSantis is a winner. He beat the Democratic wave in 2018, he got the biggest challenge of the last four years — the Covid-19 pandemic — almost exactly right, and he won reelection by the largest margin achieved by any Republican gubernatorial nominee in Florida’s 177-year-history. Perhaps, on the internet, “loser lambasts winner” is an interesting story. In the real world, it is not.” - By CHARLES C. W. COOKE, senior writer for National Review (Leading conservative magazine and website). Story at...
Trump Establishment: A Disaster for Republicans | National Review
 
“A right-wing Virginia delegate urged the Republican Party to move on from Donald Trump after he led them to a worse-than-expected midterm election showing. Tim Anderson, a criminal defense attorney who represents the Virginia Beach area, disavowed his support for the former president in a Facebook post the morning after Tuesday's election...” story at...
'Time to move on': Virginia Republican goes public against Trump 2024 after midterm flop (msn.com)
 
NO RED WAVE, TRUMP IS OUT TO SEA (WSJ)
“The red wave never came. What happened in Tuesday’s midterms was closer to a trickle...How did we end up here? President Biden’s approval rating is in the low 40s, almost 70% of Americans feel the country is going the wrong direction, and the election was fought over issues that favored the GOP...The answer is candidate quality. The GOP fielded too many novices who struggled with crafting a message, raising funds and waging effective campaigns. Some were also knuckleheads with strange beliefs and closets full of problems. Many of these remarkably weak candidates came courtesy of Donald Trump...If any of this was up for debate before Tuesday, it’s undeniable now. Mr. Trump turned what should have been a referendum on Mr. Biden’s terrible record into a choice between himself and the current president. As in 2020, lots of voters chose Mr. Biden.” – Karl Rove, Former Republican White House Deputy Chief of Staff and Political Commentator. WSJ Opinion at...
https://www.wsj.com/articles/why-there-was-no-red-wave-trump-candidate-quality-florida-trickle-desantis-2020-grievance-inflation-abortion-senate-house-race-election-results-11668025235
 
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 jumped up 5.5% to 3956. (So much for the worry about resistance at 3900.)
-VIX fell nearly 10% to 23.53.
-The yield on the 10-year Treasury fell to 3.819%. (Mortgage rates responded, too.)
 
PULLBACK DATA:
-Drop from Top: 17.5% as of today. 25.4% max (on a closing basis).
-Trading Days since Top: 216-days.
The S&P 500 is 3.1% Below its 200-dMA & 4.4 ABOVE its 50-dMA. (It’s Bullish that the Index powered well above its 50-day.)
*I won’t call the correction over until the S&P 500 makes a new-high; however, evidence suggests the bottom was 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:
Our 1^st buy signal was 27 September. It was followed by three more buy-signals on retests in mid-October. Given the mood at the time, it seemed impossible, but I follow the indicators so I went back into the market in a big way. Now, even Josh Brown said on CNBC’s Halftime show that the mood has changed, suggesting the bulls are back in charge.
 
My guess is that we’ll see a rally through the end of the year.  The next Fed meeting is mid-December. The Fed could still upset the apple cart, but by then, perhaps more data will support the bullish case. As always, indicators don’t foretell the future, but they do suggest the trend and the current trend remains up.  
 
I’ve seen comments that the markets aren’t pricing in the coming recession.  That’s true, but the markets are pretty smart and may be smarter than the pundits. For now, there aren’t signs of a recession. That could change and this could still be a scenario like 1998 when there was a 20% correction in the off Presidential election cycle, only to be followed by recession and major crash 18 months later. Still, froth has been coming out of markets now and many stocks have already been cut in half. All we can say for now is, we’ll be watching.
 
Today, the daily sum of 20 Indicators rose from +3 to +11 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations slipped from +88 to +84. (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.
 
Today was a statistically significant up-day. That just means that the price-volume move exceeded my statistical parameters. Statistics show that a statistically-significant, up-day is followed by a down-day about 60% of the time.
 
New-highs outpaced new-lows Thursday.  It’s been about 2 weeks since that has happened, and then, it was only for one day. Hopefully (for the bulls) the trend of new-high outperformance will continue.   
 
LONG-TERM INDICATOR: The Long Term NTSM indicator improved to BUY; SENTIMENT & VIX are neutral; VOLUME & PRICE are bullish. 
 
Bottom line: I’m a Bull. I think the bottom was 3577 on 12 October. There is always the possibility that the markets could retest those lows again, but it seems less likely that a retest will occur in 2022.
 
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
 
THURSDAY 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.