“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
“A pledge by China two years ago to stop
building new coal plants overseas won applause from global
climate activists, but Beijing’s decision to press ahead with some projects has
spurred questions about whether the world’s largest carbon emitter is going
back on its word... The problem is many developing countries say they are not
fully ready to make the transition, which often requires big upfront
investments to build the technology and adapt the power grids. Pakistan
and Indonesia say they are choosing to go forward with coal plants in some
places because they can ensure a stable and affordable power supply now, and
the countries lack alternatives that are financially and technically feasible.” Story at...
https://www.wsj.com/world/asia/china-swore-off-overseas-coal-plants-is-xi-keeping-his-climate-promise-3b717fb3
My cmt: China going back on its word? OMG! The Chinese Communist Party isn’t trustworthy?
“A greener and
more equitable future — that’s the idea behind a first-of-its-kind plant to be
built in Kenya that could remove up to 1 million tons of carbon dioxide from
the atmosphere every year. The proposal to build a direct air capture plant...has
been billed as a springboard for creating a new, green economy in Africa...The
technology has been criticized by some climate scientists who argue that the
technology is a dangerous distraction from the only viable solution to climate
change: Cutting greenhouse gas emissions by transitioning en masse away from
fossil fuels [italics my emphasis].” Story at...
Africa’s first carbon-removal plant stokes questions about responsible climate solutions (msn.com)
My cmt: The climate whackos wear blinders and only want THEIR solutions. CO2 is inert and remains in the atmosphere for 100+ years. Removing it is likely to be an important part of any climate fix, especially since the Chinese are still building about 2 coal plants per week according to NPR.
“We shouldn’t overlook...that the Democratic Party
provided all but eight of the votes that resulted in the speaker’s removal. For
the House Democrats this was a purely political decision, not done with the
best interests of the country in mind. That makes them equally responsible for
the chaos that has resulted. Minority Leader Hakeem Jeffries and his
fellow Democrats would certainly not earn a place in President John F.
Kennedy’s book “Profiles in Courage.” - Saul
Brenner, WSJ Opinion/Letters
PAYROLL REPORT / UNEMPLOYMENT RATE (CNBC)
“Job growth was stronger than expected in September, a sign that the U.S. economy is hanging tough despite higher interest rates, labor strife and dysfunction in Washington. Nonfarm payrolls increased by 336,000 for the month... The unemployment rate was 3.8%, compared to the forecast for 3.7%.” Story at...
https://www.cnbc.com/2023/10/06/jobs-report-september-2023.html
QUANTITATIVE TIGHTENING (WSJ)
“In the “quantitative tightening” program that the Fed kicked off last year, it is currently allowing up to $60 billion in Treasurys and $35 billion in mortgage-backed and agency securities to mature each month without replacing them, effectively adding to the supply of bonds that other buyers must absorb. That in turn puts downward pressure on securities prices and upward pressure on rates. The Fed thinks its current securities portfolio is far too big at over $7 trillion and isn’t inclined to stop shrinking it.” Story at...
https://www.wsj.com/economy/central-banking/bond-selloff-might-force-fed-to-rethink-shedding-assets-305d2a26
MARKET REPORT / ANALYSIS
-Monday the S&P 500 rose about 0.6% to 4336.
-VIX fell about 1% to 17.69.
-The yield on the 10-year Treasury rose to 4.795%. (That must be Friday’s data since the bond market was closed today.)
PULLBACK DATA:
-Drop from Top: 9.6%. 25.4% max (on a closing basis).
-Trading Days since Top: 443-days.
The S&P 500 is 3% ABOVE its 200-dMA and 1.9% 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 in the 3600 area and we called a buy on 4 October 2022.
MY TRADING POSITIONS:
XLK – Technology ETF (holding since the October 2022 lows).
XLY - Consumer Discretionary ETF. (Holding since the October 2022 lows - I bought more XLY Monday, 8/21.)
I took profits and then reestablished positions as follows:
SPY – I bought a large position in the S&P 500 Friday, 8/14, in my 401k (it has limited choices).
XLE – Added Tuesday, 8/22.
SSO – 2x S&P 500 ETF. Added 8/24.
CSCO – added 9/5.
TODAY’S COMMENT:
I saw a note this morning on the CNBC web site that predicted an extended period of weakness due to the Israeli war. It could be, but I doubt it. Markets are just now exiting a long period of weakness and technically more weakness does not seem to be in the cards. CNBC took down the post sometime during the day as the market rose.
A couple of indicators that turned bullish:
-Money Trend
-MACD of S&P 500 Price
-Short-term New-high/New-low data
-There was more than a 4 std deviation improvement/reversal in New-high/New-low spread today.
The New-high/New-low reversal along with improving
short-term New-high percentage suggests an end to the current correction.
The daily spread of 20 Indicators (Bulls minus Bears) improved
from -3 to +3 (a positive number is bullish; negatives are bearish); the 10-day
smoothed sum that smooths the daily fluctuations improved from -70 to -61.
(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
HOLD: VOLUME, SENTIMENT, PRICE & VIX are neutral.
(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. The
NTSM sell-signal was issued 21 December, 9 sessions before the high of this
recent bear market, based on the bearish “Friday Rundown” of indicators.)
It looks like we have already seen the bottom. There are
indications that the bottom was Wednesday at 4230 on the S&P 500. I think
we got confirmation today, 9 October.
ETF - 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 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
MONDAY MARKET INTERNALS (NYSE DATA)
My basket of Market Internals improved a lot but remained HOLD. (My basket of Market Internals is 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.)
https://www.wsj.com/world/asia/china-swore-off-overseas-coal-plants-is-xi-keeping-his-climate-promise-3b717fb3
My cmt: China going back on its word? OMG! The Chinese Communist Party isn’t trustworthy?
Africa’s first carbon-removal plant stokes questions about responsible climate solutions (msn.com)
My cmt: The climate whackos wear blinders and only want THEIR solutions. CO2 is inert and remains in the atmosphere for 100+ years. Removing it is likely to be an important part of any climate fix, especially since the Chinese are still building about 2 coal plants per week according to NPR.
“Job growth was stronger than expected in September, a sign that the U.S. economy is hanging tough despite higher interest rates, labor strife and dysfunction in Washington. Nonfarm payrolls increased by 336,000 for the month... The unemployment rate was 3.8%, compared to the forecast for 3.7%.” Story at...
https://www.cnbc.com/2023/10/06/jobs-report-september-2023.html
“In the “quantitative tightening” program that the Fed kicked off last year, it is currently allowing up to $60 billion in Treasurys and $35 billion in mortgage-backed and agency securities to mature each month without replacing them, effectively adding to the supply of bonds that other buyers must absorb. That in turn puts downward pressure on securities prices and upward pressure on rates. The Fed thinks its current securities portfolio is far too big at over $7 trillion and isn’t inclined to stop shrinking it.” Story at...
https://www.wsj.com/economy/central-banking/bond-selloff-might-force-fed-to-rethink-shedding-assets-305d2a26
-Monday the S&P 500 rose about 0.6% to 4336.
-VIX fell about 1% to 17.69.
-The yield on the 10-year Treasury rose to 4.795%. (That must be Friday’s data since the bond market was closed today.)
-Drop from Top: 9.6%. 25.4% max (on a closing basis).
-Trading Days since Top: 443-days.
The S&P 500 is 3% ABOVE its 200-dMA and 1.9% 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 in the 3600 area and we called a buy on 4 October 2022.
XLK – Technology ETF (holding since the October 2022 lows).
XLY - Consumer Discretionary ETF. (Holding since the October 2022 lows - I bought more XLY Monday, 8/21.)
I took profits and then reestablished positions as follows:
SPY – I bought a large position in the S&P 500 Friday, 8/14, in my 401k (it has limited choices).
XLE – Added Tuesday, 8/22.
SSO – 2x S&P 500 ETF. Added 8/24.
CSCO – added 9/5.
I saw a note this morning on the CNBC web site that predicted an extended period of weakness due to the Israeli war. It could be, but I doubt it. Markets are just now exiting a long period of weakness and technically more weakness does not seem to be in the cards. CNBC took down the post sometime during the day as the market rose.
-Money Trend
-MACD of S&P 500 Price
-Short-term New-high/New-low data
-There was more than a 4 std deviation improvement/reversal in New-high/New-low spread today.
TODAY’S RANKING OF 15 ETFs (Ranked Daily)
ETF ranking follows:
*For additional background on the ETF ranking system see NTSM Page at…
http://navigatethestockmarket.blogspot.com/p/exchange-traded-funds-etf-ranking.html
DOW STOCKS - TODAY’S MOMENTUM RANKING OF THE DOW 30 STOCKS (Ranked Daily)
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
MONDAY MARKET INTERNALS (NYSE DATA)
