“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
“Far more
money has been lost by investors in preparing for corrections, or anticipating
corrections, than has been lost in the corrections themselves.” -
Peter Lynch, former manager of Fidelity’s Magellan® fund.
WUHAN LAB RELEASES ANOTHER DEADLY VIRUS (Daily Mail via msn.com)
“The Chinese lab that FBI director Chris Wray and members of Congress believe likely leaked Covid-19 may have also released of a 'highly evolved' strain of polio. A bombshell new study suggests that this strain, which infected a four-year-old boy amid a wider viral outbreak in China 's Anhui province, evolved from a type of polio almost exclusively used in vaccine production and laboratory settings. Researchers at France 's Pasteur Institute examined the novel polio strain's genome, catalogued as 'WIV14' by the infamous Wuhan Institute of Virology , showing that the mutated virus matched this typically tightly held lab strain 'higher than 99 percent.'” Story at...
Study: Chinese lab linked to Covid leak released another deadly virus (msn.com)
BEIGE BOOK (Barchart)
“...the release of the Fed’s Beige Book Wednesday afternoon sparked growth concerns. The Fed Beige Book stated the number of Fed districts reporting flat or declining activity rose to nine in the month to August 26, up from five in the prior period, and that "employers were more selective with their hires and less likely to expand their workforces, citing concerns about demand and an uncertain economic outlook." Story at...
https://www.barchart.com/story/news/28370817/stocks-settle-mixed-as-fed-beige-book-raises-growth-concerns
ADP EMPLOYMENT (ADP via PR Newswire)
“Private sector employment increased by 99,000 jobs in August and annual pay was up 4.8 percent year-over-year, according to the August ADP® National Employment Report™ ... "The job market's downward drift brought us to slower-than-normal hiring after two years of outsized growth," said Nela Richardson, chief economist, ADP. "The next indicator to watch is wage growth, which is stabilizing after a dramatic post-pandemic slowdown." Press release at...
https://www.prnewswire.com/news-releases/adp-national-employment-report-private-sector-employment-increased-by-99-000-jobs-in-august-annual-pay-was-up-4-8-302239359.html
My cmt: The jobs growth was well below estimates so this was not good for the markets.
JOBLESS CLAIMS (AP News)
“Jobless claims fell by 5,000 to 227,000 for the week of Aug. 31, the Labor Department reported Thursday. That’s the fewest since the week of July 6, when 223,000 Americans filed claims. It’s also less than the 230,000 new filings that analysts were expecting.” Story at...
https://apnews.com/article/unemployment-benefits-jobless-claims-layoffs-labor-c6fa106a41d896ef3b62c3a2810ca1da
ISM NON-MANUFACTURING PMI (ISM via PR Newswire)
“In August, the Services PMI® registered 51.5 percent, 0.1 percentage point higher than July's figure of 51.4 percent. The reading in August marked the sixth time the composite index has been in expansion territory in 2024.” Press release at...
https://www.prnewswire.com/news-releases/services-pmi-at-51-5-august-2024-services-ism-report-on-business-302238390.html
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 fell about 0.3% to 5503.
-VIX fell about 7% to 19.90. (The Options Players don’t seem worried.)
-The yield on the 10-year Treasury declined to 3.731% (compared to about this time, prior trading day).
MY TRADING POSITIONS:
XLK – Holding since the October 2022 lows.
XLK – added more 7/26. This reestablishes the position I had before this recent weakness.
UWM – added 7/15.
QLD – added 7/24.
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
The Bull/Bear Spread declined, but remained Neutral at 11 Bear-signs and 9-Bull. (The rest are neutral. It is normal to have a lot of neutral indicators since many of those are top or bottom indicators that will signal only at extremes.)
The Bull/Bear, 50-Indicator spread (Bull Indicators minus Bear Indicators) declined to -2 (2 more Bear indicators than Bull indicators). The 10-dMA continued down, a bearish sign and that’s a worry.
TODAY’S COMMENT:
Thursday, unchanged volume was very high. As I’ve often said, many believe that this indicator suggests investor confusion at market turning points. The trend has been down for the last 3-days and the Index is below its lower trend line (from 25 October). Does that mean a reversal higher is in the works? I don’t know. Perhaps the best we can say is that investors are confused. It seems to me that a move higher or lower is equally likely. “High-unchanged-volume” is not one of my indicators because it is often wrong.
The 50-indicator spread is still falling and the futures
are down as I write this (9pm Thursday).
I am going to cut my invested position down closer to 50% tomorrow. Indicators
are suggesting that this is not the time to be so far overinvested. On 30
August, the S&P 500 was only about 0.3% below its all-time high. The % of
new-highs on that day was an above average 10% and that suggests (but does not guarantee)
that this pullback will be less than 10%. Still, I am overinvested for a
retiree and losses should be avoided. Working folks can take more risks because
they have time to recoup losses, but in general, avoiding (or minimizing) losses
is always a good idea.
BOTTOM LINE
Unless Friday is a strong up-day. I will lower stock investments. The 10-day moving average of 50-indicators is still falling and that’s a worry.
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)
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. (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 when markets are stretched; my current
stock position is above the norm. (75% is my max stock allocation when I am
strongly bullish.) As noted above, I’ll reduce stock holdings Friday.
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, usually by using an S&P 500 ETF as I did
back in October 2022 and 2023.
“The Chinese lab that FBI director Chris Wray and members of Congress believe likely leaked Covid-19 may have also released of a 'highly evolved' strain of polio. A bombshell new study suggests that this strain, which infected a four-year-old boy amid a wider viral outbreak in China 's Anhui province, evolved from a type of polio almost exclusively used in vaccine production and laboratory settings. Researchers at France 's Pasteur Institute examined the novel polio strain's genome, catalogued as 'WIV14' by the infamous Wuhan Institute of Virology , showing that the mutated virus matched this typically tightly held lab strain 'higher than 99 percent.'” Story at...
Study: Chinese lab linked to Covid leak released another deadly virus (msn.com)
“...the release of the Fed’s Beige Book Wednesday afternoon sparked growth concerns. The Fed Beige Book stated the number of Fed districts reporting flat or declining activity rose to nine in the month to August 26, up from five in the prior period, and that "employers were more selective with their hires and less likely to expand their workforces, citing concerns about demand and an uncertain economic outlook." Story at...
https://www.barchart.com/story/news/28370817/stocks-settle-mixed-as-fed-beige-book-raises-growth-concerns
“Private sector employment increased by 99,000 jobs in August and annual pay was up 4.8 percent year-over-year, according to the August ADP® National Employment Report™ ... "The job market's downward drift brought us to slower-than-normal hiring after two years of outsized growth," said Nela Richardson, chief economist, ADP. "The next indicator to watch is wage growth, which is stabilizing after a dramatic post-pandemic slowdown." Press release at...
https://www.prnewswire.com/news-releases/adp-national-employment-report-private-sector-employment-increased-by-99-000-jobs-in-august-annual-pay-was-up-4-8-302239359.html
My cmt: The jobs growth was well below estimates so this was not good for the markets.
“Jobless claims fell by 5,000 to 227,000 for the week of Aug. 31, the Labor Department reported Thursday. That’s the fewest since the week of July 6, when 223,000 Americans filed claims. It’s also less than the 230,000 new filings that analysts were expecting.” Story at...
https://apnews.com/article/unemployment-benefits-jobless-claims-layoffs-labor-c6fa106a41d896ef3b62c3a2810ca1da
“In August, the Services PMI® registered 51.5 percent, 0.1 percentage point higher than July's figure of 51.4 percent. The reading in August marked the sixth time the composite index has been in expansion territory in 2024.” Press release at...
https://www.prnewswire.com/news-releases/services-pmi-at-51-5-august-2024-services-ism-report-on-business-302238390.html
-Thursday the S&P 500 fell about 0.3% to 5503.
-VIX fell about 7% to 19.90. (The Options Players don’t seem worried.)
-The yield on the 10-year Treasury declined to 3.731% (compared to about this time, prior trading day).
XLK – Holding since the October 2022 lows.
XLK – added more 7/26. This reestablishes the position I had before this recent weakness.
UWM – added 7/15.
QLD – added 7/24.
The Bull/Bear Spread declined, but remained Neutral at 11 Bear-signs and 9-Bull. (The rest are neutral. It is normal to have a lot of neutral indicators since many of those are top or bottom indicators that will signal only at extremes.)
The Bull/Bear, 50-Indicator spread (Bull Indicators minus Bear Indicators) declined to -2 (2 more Bear indicators than Bull indicators). The 10-dMA continued down, a bearish sign and that’s a worry.
Thursday, unchanged volume was very high. As I’ve often said, many believe that this indicator suggests investor confusion at market turning points. The trend has been down for the last 3-days and the Index is below its lower trend line (from 25 October). Does that mean a reversal higher is in the works? I don’t know. Perhaps the best we can say is that investors are confused. It seems to me that a move higher or lower is equally likely. “High-unchanged-volume” is not one of my indicators because it is often wrong.
Unless Friday is a strong up-day. I will lower stock investments. The 10-day moving average of 50-indicators is still falling and that’s a worry.
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
For more details, see NTSM Page at…
https://navigatethestockmarket.blogspot.com/p/a-system-for-trading-dow-30-stocks-my_8.html
