“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
“Underlying strength in the bond market is signaling that the US economy is not on the verge of entering a recession anytime soon, according to a Monday note from DataTrek Research. In fact, corporate bond-yield spreads relative to US Treasuries suggest the economy is not going to enter a recession in 2023 or 2024, according to the note.” Story at...
https://news.yahoo.com/strength-bond-market-signaling-us-151758104.html
My cmt: That’s why the stock market is in rally mode.
-Tuesday the S&P 500 rose about 1.3% to 4164.
-VIX dipped about 4% to 18.66.
-The yield on the 10-year Treasury rose to 3.677%.
-Drop from Top: 13.2% as of today. 25.4% max (on a closing basis).
-Trading Days since Top: 275-days.
The S&P 500 is 5.5% ABOVE its 200-dMA & 5.1% ABOVE 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 in the 3600 area.
QLD – (2xNas 100) The XLK bottomed 12 October, about the same time as when the S&P 500 retested its low. QLD seems like a decent bet even though the CNBC crowd doesn’t like Tech.
XLK – Technology ETF.
SSO – 2x S&P 500.
XLE – Energy Sector ETF. Low PE; good Dividend; decent momentum, although momentum has been slipping recently.
BA – (Boeing) I am late on this one, but we’ll see.
XLY - Consumer Discretionary ETF. (I considered selling XLY. But it has been a good performer recently, so I’ll continue to watch it.)
SHY – Short term bonds. 30-day yield is 4.2%. (Trailing 1-year yield is 1.3%.) I’ll hold this, but if the market retests the lows, I’ll sell it and buy stocks.)
Fed chair Powell’s speech today was much ado about nothing. No big news came from the speech, so markets were happy at the end of the day. I guess the fear was that he would come out more bearish after the blockbuster jobs report Friday. As we’ve previously commented, we already knew that the jobs market is overheated (3.4% unemployment) so the hot numbers Friday didn’t add much to the story - and Powell didn’t say much about the Friday report
(The important BUY in this indicator was on 21 October, 7-days after the bottom. For my NTSM overall signal, I suggested that a short-term buying opportunity occurred on 27 September (based on improved market internals on the retest), although without market follow-thru, I was unwilling to call a buy; however, I did close shorts and increased stock holdings. I issued a Buy-Signal on 4 October, 6-days before the final bottom, based on stronger market action that confirmed the market internals signal.)
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
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
