“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
PPI (CNN)
Wholesale price increases of US goods and services jumped higher for a third consecutive month, influenced by still-high energy prices, according to data released Wednesday by the Bureau of Labor Statistics. The Producer Price Index, which measures the average price changes that businesses pay to suppliers, rose 2.2% for the 12 months ended in September. On a monthly basis, prices rose 0.5%, a slight cooldown from August’s 0.7% increase... When stripping out the more volatile components of food and energy, the core PPI rose 2.7% for the month and was up 0.3% for the year.” Story at...
https://www.cnn.com/2023/10/11/economy/ppi-wholesale-inflation-september/index.html
FOMC MINUTES (US News)
“A majority of Federal Reserve officials believed at their September meeting that interest rates would need to remain “restrictive” until they are convinced inflation is headed firmly toward the central bank’s 2% annual target. Though there were differences as to whether more interest rate hikes would be needed, a majority did favor one more increase, minutes from the meeting released Wednesday show.” Story at...
https://www.usnews.com/news/economy/articles/2023-10-11/fed-minutes-show-majority-support-for-higher-for-longer-policy-on-interest-rates
MOST BEARISH EVER (Market Insider via msn.com)
“Professional traders in one corner of Wall Street have taken on their biggest bet ever against US stocks, according to data from Goldman Sachs. The bank said in a Monday note that trend-following traders on Wall Street, also known as commodity trading advisers (CTAs), are short a record $47 billion of US stocks... the CTAs could in fact become a big source of buying pressure for stocks if the S&P 500 continues to show evidence of bottoming and moving higher.” Story at...
A key corner of Wall Street is making its most bearish bet against stocks ever (msn.com)
IS THE BELL RINGING (Heritage Capital)
“Is the pullback now totally over? I can’t say that I have high conviction right now. I am just not convinced although I did do some buying. First, the VIX did not spike. And the major stock market indices did not make new lows. And so far, the decline has almost too conveniently held the average price of the last 200 days which is a all too watched level.” – Paul Schatz, President Hereitage Capital. Commentary at...
https://investfortomorrow.com/blog/big-gains-on-friday-bell-ringing/
ENTERING THE 4TH PRESIDENTIAL YEAR (McClellan
Financial Publications)
“It is worth noting that in this current presidential term, the bullish portion of the 3rd year was a lot less robust than what the PCP (Presidential Cycle Pattern) shows. It was still up, though, so that particular message of the PCP worked great...It is, after all, just a depiction of what "average" is. When we use it, we should all understand that there will be variations from it. It is still a useful guide even with that limitation. And just ahead, it says that there should be a big swoop up in Q4 of 2023.” - Tom McClellan, Editor, The McClellan Market Report. Commentary at...
https://www.mcoscillator.com/learning_center/weekly_chart/entering_the_4th_presidential_year/
2023 IS THE US’ LOWEST WILDFIRE YEAR SINCE 2000
(ZeroHedge)
How many other scary and unfounded predictions have gone viral in the public space? That communists were taking over the universities and government in the 1950s? That Vietnam was a domino requiring intervention? That weapons of mass destruction were hidden in Iraq? We seem to love believing in apocalyptic predictions, whether or not factual information supports them?” Story at...
https://www.zerohedge.com/weather/2023-us-lowest-wildfire-year-2000
“Rather than express sympathy for the more than 1,000
Israelis murdered by Hamas terrorists, Black Lives Matter Grassroots put out a
statement declaring its support for Palestinians, saying, ‘[W]e must stand
unwaveringly on the side of the oppressed.’" From...
Black Lives Matter group defends Hamas terror as 'desperate act of self-defense' that 'must not be condemned' (msn.com)
My cmt: If the Palestinians laid down their weapons and lived peacefully, there would be no war. If the Israelis laid down their weapons, there would be no Israel and no Israelis.
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 rose about 0.4% to 4376.
-VIX fell about 6% to 16.09.
-The yield on the 10-year Treasury declined to 4.554%.
PULLBACK DATA:
-Drop from Top: 8.7%. 25.4% max (on a closing basis).
-Trading Days since Top: 443-days.
The S&P 500 is 3.8% ABOVE its 200-dMA and 0.8% 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 noticed last night that there were large short positions in the Rydex S&P 500 long/short funds. They may have been betting that the PPI would run too hot. When the PPI came out this morning the futures dipped a little and shortly thereafter were stronger so the Rydex traders were wrong, if that was their reasoning. Another possibility is that the Rydex traders noted that the S&P 500 had been up three days in a row and they were playing the odds that a down-day was overdue. That can be true sometimes, but I’d never make that trade after a bottom when investors are in a strong buying mood. I guess those traders didn’t know the bottom was in - they should read my blog!
Looks like correction over to me. Now we’ll see if the
Index can break above its 50-dMA.
The daily spread of 20 Indicators (Bulls minus Bears) remained
+7 (a positive number is bullish; negatives are bearish); the 10-day smoothed
sum that smooths the daily fluctuations improved from -48 to -31. (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: PRICE, VOLUME, SENTIMENT & 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 October and again 10 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
WEDNESDAY MARKET INTERNALS (NYSE DATA)
My basket of Market Internals remained BUY. (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.)
Wholesale price increases of US goods and services jumped higher for a third consecutive month, influenced by still-high energy prices, according to data released Wednesday by the Bureau of Labor Statistics. The Producer Price Index, which measures the average price changes that businesses pay to suppliers, rose 2.2% for the 12 months ended in September. On a monthly basis, prices rose 0.5%, a slight cooldown from August’s 0.7% increase... When stripping out the more volatile components of food and energy, the core PPI rose 2.7% for the month and was up 0.3% for the year.” Story at...
https://www.cnn.com/2023/10/11/economy/ppi-wholesale-inflation-september/index.html
“A majority of Federal Reserve officials believed at their September meeting that interest rates would need to remain “restrictive” until they are convinced inflation is headed firmly toward the central bank’s 2% annual target. Though there were differences as to whether more interest rate hikes would be needed, a majority did favor one more increase, minutes from the meeting released Wednesday show.” Story at...
https://www.usnews.com/news/economy/articles/2023-10-11/fed-minutes-show-majority-support-for-higher-for-longer-policy-on-interest-rates
“Professional traders in one corner of Wall Street have taken on their biggest bet ever against US stocks, according to data from Goldman Sachs. The bank said in a Monday note that trend-following traders on Wall Street, also known as commodity trading advisers (CTAs), are short a record $47 billion of US stocks... the CTAs could in fact become a big source of buying pressure for stocks if the S&P 500 continues to show evidence of bottoming and moving higher.” Story at...
A key corner of Wall Street is making its most bearish bet against stocks ever (msn.com)
“Is the pullback now totally over? I can’t say that I have high conviction right now. I am just not convinced although I did do some buying. First, the VIX did not spike. And the major stock market indices did not make new lows. And so far, the decline has almost too conveniently held the average price of the last 200 days which is a all too watched level.” – Paul Schatz, President Hereitage Capital. Commentary at...
https://investfortomorrow.com/blog/big-gains-on-friday-bell-ringing/
“It is worth noting that in this current presidential term, the bullish portion of the 3rd year was a lot less robust than what the PCP (Presidential Cycle Pattern) shows. It was still up, though, so that particular message of the PCP worked great...It is, after all, just a depiction of what "average" is. When we use it, we should all understand that there will be variations from it. It is still a useful guide even with that limitation. And just ahead, it says that there should be a big swoop up in Q4 of 2023.” - Tom McClellan, Editor, The McClellan Market Report. Commentary at...
https://www.mcoscillator.com/learning_center/weekly_chart/entering_the_4th_presidential_year/
How many other scary and unfounded predictions have gone viral in the public space? That communists were taking over the universities and government in the 1950s? That Vietnam was a domino requiring intervention? That weapons of mass destruction were hidden in Iraq? We seem to love believing in apocalyptic predictions, whether or not factual information supports them?” Story at...
https://www.zerohedge.com/weather/2023-us-lowest-wildfire-year-2000
Black Lives Matter group defends Hamas terror as 'desperate act of self-defense' that 'must not be condemned' (msn.com)
My cmt: If the Palestinians laid down their weapons and lived peacefully, there would be no war. If the Israelis laid down their weapons, there would be no Israel and no Israelis.
-Wednesday the S&P 500 rose about 0.4% to 4376.
-VIX fell about 6% to 16.09.
-The yield on the 10-year Treasury declined to 4.554%.
-Drop from Top: 8.7%. 25.4% max (on a closing basis).
-Trading Days since Top: 443-days.
The S&P 500 is 3.8% ABOVE its 200-dMA and 0.8% 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 noticed last night that there were large short positions in the Rydex S&P 500 long/short funds. They may have been betting that the PPI would run too hot. When the PPI came out this morning the futures dipped a little and shortly thereafter were stronger so the Rydex traders were wrong, if that was their reasoning. Another possibility is that the Rydex traders noted that the S&P 500 had been up three days in a row and they were playing the odds that a down-day was overdue. That can be true sometimes, but I’d never make that trade after a bottom when investors are in a strong buying mood. I guess those traders didn’t know the bottom was in - they should read my blog!
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 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
WEDNESDAY MARKET INTERNALS (NYSE DATA)
