FED Rate Decision ... ISM Manufacturing ... ADP Emplyment Change ... JOLTS Job Openings ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...
“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
“If federal deficits continue to rise as fast as they
have been and the Federal Reserve holds interest rates at current levels, the
interest on the National Debt will be half of the entire tax receipts of the United
States within 5-years...We’re at DEFCON 3 on the National Debt.” – Jeffrey Gunlach,
Co-Founder of DoubleLine Capital on CNBC. (DEFCON 5 is nuclear war; DEFCON 1 is
all clear.)
“This global war on Jews also clarifies what is at stake
for Western societies in this fight. The West spent the decades after the
civilizational catastrophe of the Holocaust vowing never again to allow itself
to slide into such barbarism. What we see now in the attacks on Jews is how
that slide began. Before there was a Chancellor Hitler in 1933, there were
roving bands of Brownshirts inflicting political and anti-Semitic violence on
the streets of Germany...Today’s threats to democracy are different, but one
lesson is the same and is crystal-clear: A Western society that can’t or won’t
muster the will to defend its Jewish neighbors and fellow citizens won’t be
able to defend itself.” – WSJ Editorial Staff. From...
https://www.wsj.com/articles/israel-hamas-jews-pogroms-russia-u-s-europe-germany-anti-semitism-1a74109c
“Andrew Stein cites good reasons to back Nikki
Haley over Donald Trump (“I Backed Trump, but Now I’m for Haley,” op-ed, Oct. 27).
Here’s one more: While recent polls show a Trump-Biden matchup would be a
toss-up, they also show that Ms. Haley would defeat President Biden by
substantial margins. Republicans may not be known for seizing opportunities,
but it looks like they would rather go down in flames with Mr. Trump than win
with Ms. Haley.” - Robert
Hardaway. WSJ Letters to the Editor.
NATIONAL RESTAURANT ASSOCIATION
“The National Restaurant Association’s Restaurant
Performance Index (RPI) posted a modest decline in September, as restaurant
operators’ outlook for business conditions softened. The RPI – a monthly
composite index that tracks the health of the U.S. restaurant industry – stood
at 100.4 in September, down 0.2% from a level of 100.5 in August.” Report at...
https://restaurant.org/NRA/media/Research/RPI/2021/RPI-September-2023.pdf
My cmt: Paul Schatz, President of Heritage Capital, says
that the RPI is an excellent recession predictor. According to Paul (and it
makes perfect sense), eating out is the first thing to go in a recession. When the Index falls below 100, watch out.
2024 may be a problem.
FED MEETING ANNOUNCEMENT (CNN)
“After the Federal Reserve's decision to hold interest
rates steady on Wednesday, traders are predicting rate hikes will be off the
table for the rest of this year. According to the CME FedWatch tool, investors
who trade fed fund futures contracts estimate there is a higher than 70% chance
that interest rates will stay the same at the Fed's next meeting, which
concludes on December 13. However, Fed Chair Jerome Powell said Wednesday that
future interest rate decisions haven't been made yet.” Story at...
https://www.cnn.com/business/live-news/fed-meeting-rate-decision-11-1-2023/index.html
ISM MANUFACTURING (ISM via prnewswire)
"The Manufacturing PMI® registered 46.7 percent
in October, 2.3 percentage points lower than the 49 percent recorded in
September. The overall economy dropped back into contraction after one month of
weak expansion preceded by nine months of contraction and a 30-month period of
expansion before that. (A Manufacturing PMI® above 48.7 percent, over a
period of time, generally indicates an expansion of the overall economy.)”
Press release at...
https://www.prnewswire.com/news-releases/manufacturing-pmi-at-46-7-october-2023-manufacturing-ism-report-on-business-301973296.html
ADP EMPLOYMENT CHANGE (CNBC)
“Private sector payroll growth increased modestly in
October but missed expectations, in a potential sign that the employment
picture could be darkening, ADP reported Wednesday. The payrolls processing
firm said that companies added 113,000 workers for the month...” Story at...
https://www.cnbc.com/2023/11/01/adp-jobs-report-october-2023.html
JOLTS – JOB OPENINGS (NY Times)
“Job openings changed little in September, the Labor
Department announced on Wednesday. There were 9.6 million job
openings in September, slightly up from August’s revised total of 9.5 million,
according to seasonally adjusted figures from the Job Openings and Labor
Turnover Survey.” Story at...
https://www.nytimes.com/2023/11/01/business/economy/jolts-job-openings-layoffs-turnover.html
EIA CRUDE INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those
in the Strategic Petroleum Reserve) increased by 0.8 million barrels from the
previous week. At 421.9 million barrels, U.S. crude oil inventories are about
5% 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 rose about 1.1% to 4238.
-VIX fell about 7% to 16.87.
-The yield on the 10-year Treasury dipped to 4.734%.
PULLBACK DATA:
-Drop from Top: 11.6%. 25.4% max (on a closing basis).
-Trading Days since Top: 460-days.
The S&P 500 is 0.1% BELOW its 200-dMA and 2.6%
BELOW its 50-dMA.
*I won’t call the correction over until the S&P 500
makes a new-high; however, evidence suggests the major bear-market 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:
New-High/New-Low data improved again today and this
indicator finally gave a buy signal. Overall, we don’t yet have a buy signal
from the indicator ensembles, but this is another good sign. There were others: Money
Trend turned up; smoothed volume turned bullish; McClellan Oscillator is headed
up; the VIX indicator improved to neutral.
To break the correction, we need to see the S&P 500
break above its downward sloping, upper trend-line around 4325.
The daily spread of 20 Indicators (Bulls minus Bears) improved
from -8 to +2 (a positive number is bullish; negatives are bearish); the 10-day
smoothed sum that smooths the daily fluctuations remained -82. (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 improved
to HOLD: PRICE was bullish; VOLUME & VIX & SENTIMENT 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.)
BOTTOM LINE
It’s looking more like the bottom was Friday. There are
still some resistance zones that must be penetrated to the upside. The S&P
500 is 0.1% below its 200-dMA and the upper trend line is basically on the
50-dMA around 4350.
ETF - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily)
ETF ranking follows:
Momentum charts are not good since all of the ETFs are below their
120-dMA. Ranking follows:
1) XLE
2) XLK
3) ITA
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 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.)
...My current invested
position is about 75% stocks, including stock mutual funds and ETFs. I’m
usually about 50% invested in stocks. I’m “over invested” now expecting new,
all-time highs this year. That burns all the cash. I have about 25% of the portfolio in bonds.
I trade about 15-20% of the
total portfolio using the momentum-based analysis I provide here. When I see a
definitive bottom, I add a lot more stocks to the portfolio using an S&P
500 ETF as I did back in October.
