Payroll Report ... Unemployment Rate ... Factory Orders … Coronavirus (Covid-19) … Stock Market Analysis … ETF Trading … Dow 30 Ranking

“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.

 

“The big money is not in the buying and selling. But in the waiting.” - Charlie Munger, Vice Chairman, Berkshire Hathaway

 

“Bubbles tend to topple under their own weight. Everybody is in. The last short has covered. The last buyer has bought (or bought massive amounts of weekly calls). The decline starts and the psychology shifts from greed to complacency to worry to panic. Our working hypothesis, which might be disproven, is that September 2, 2020 was the top and the bubble has already popped.” - David Einhorn, Greenlight hedge fund.

 

PAYROLL REPORT / UNEMPLOYMENT RATE (NBC news)

“The U.S. economy added 245,000 jobs in November, as the unemployment rate fell to 6.7 percent, according to data released Friday by the Bureau of Labor Statistics. Economists had predicted the economy would gain around 440,000 jobs.” Story at...

https://www.nbcnews.com/business/economy/u-s-economy-gains-just-245-000-jobs-final-report-n1249983

 

FACTORY ORDERS (Reuters)

“New orders for U.S.-made goods increased more than expected in October and business investment on capital was a bit stronger than initially thought as the manufacturing sector continues its steady recovery from the pandemic. The Commerce Department said on Friday that factory orders rose 1.0% after increasing 1.3% in October.” Story at...

https://www.reuters.com/article/usa-economy-manufacturing/u-s-factory-orders-increase-more-than-expected-in-october-idUSL1N2IJ2GR

 

CORONAVIRUS (NTSM)

Here’s the latest from the COVID19 Johns Hopkins website at 5:45 pm Friday. US total case numbers are on the left axis; daily numbers are on the right side of the graph with the 10-dMA of daily numbers in Green. Looks like a new record for new cases!

MARKET REPORT / ANALYSIS

-Friday the S&P 500 rose about 0.9% to 3699.

-VIX slipped about 3% to 20.73.

-The yield on the 10-year Treasury rose to 0.970%.

 

Here’s the Friday run-down of some important indicators. These tend to be both long-term and short-term so they are somewhat different than the 20 that I report on daily.

 

BULL SIGNS

-11 Nov., we got a “Breadth Thrust” indication. That’s a rare, very bullish sign.

-9 Nov. (Vaccine Announcement Day), the 52-week, New-high/new-low ratio improved by 5.8 standard deviations – very bullish and also rare.

-The 10-dMA of stocks advancing on the NYSE (Breadth) is above 50%

-The 50-dMA % of stocks advancing on the NYSE (Breadth) is above 50%.

-The 100-dMA of the % of stocks advancing on the NYSE (Breadth) is above 50%.

-The size of up-moves has been larger than the size of down-moves over the last month.

-The 5-10-20 Timer System is BUY; the 5-dEMA and the 10-dEMA are above the 20-dEMA. 

-MACD of the percentage of stocks advancing on the NYSE (breadth) made a bullish crossover 4 Nov.

-MACD of S&P 500 price made a bullish crossover 5 November.

-McClellan Oscillator is above zero.

-The Fosback High-Low Logic Index is bullish.

-Slope of the 40-dMA of New-highs is rising.

-VIX is falling fast enough to give a Bull-signal.

-The smoothed advancing volume on the NYSE is rising.

-The S&P 500 is outperforming Utilities ETF (XLU).

-63% of the 15-ETFs that I track have been up over the last 10-days.

 

NEUTRAL

-Non-crash Sentiment indicator remains neutral, but it is very elevated and leaning bearish.

-Statistically, the S&P 500 gave a panic-signal, 28 October. This usually means more downside to come, but the bear signal has expired.

-There have been 11 up-days over the last 20 days. Neutral

-We’ve seen 6 up-days over the last 10-days. Neutral

-The market has broadened out; 9.1% and 8.9% of all issues traded on the NYSE made new, 52-week highs when the S&P 500 made a new all-time-high on 24 November and 27 November respectively. The average over the last 5 years has been about 7%.

-Long-term new-high/new-low data. (It looks like it is rolling over; let’s say neutral.)

-Short-term new-high/new-low data. (It looks like it is rolling over; let’s say neutral.)

-Bollinger Bands. This indicator is extremely close to overbought, but not there yet. RSI is still neutral, so I’ll keep this in the Neutral column. I like to work Bollinger Bands and RSI together.

-RSI.

 

BEAR SIGNS

-Breadth on the NYSE compared to the S&P 500 index is warning of a correction at any time. I’ve been following this for 9 years. It has only been this stretched once - 4 days before an 8% correction in Feb 2011.

-My Money Trend indicator is trending down.

-The S&P 500 is 17.1% above its 200-dMA. (Sell point is 12%.) When Sentiment is considered, the signal is also bearish.

-Overbought/Oversold Index (Advance/Decline Ratio) is overbought.

-Cyclical Industrials (XLI-ETF) are underperforming the S&P 500.

-The Smart Money (late-day action) is bearish. This indicator is based on the Smart Money Indicator (a variant of the indicator developed by Don Hayes).

 

On Friday, 21 February, 2 days after the top of the Coronavirus pullback, there were 10 bear-signs and 1 bull-sign. Now there are 6 bear-signs and 16 bull-signs. Last week, there were 5 bear-signs and 17 bull-signs.

 

The daily sum of 20 Indicators remained +8 (a positive number is bullish; negatives are bearish). The 10-day smoothed sum that smooths the daily fluctuations increased from +58 to +60. (These numbers sometimes change after I post the blog based on data that comes in late.) Most of these indicators are short-term and many are trend following.

 

The Long Term NTSM indicator ensemble switched back up to BUY, 24 Nov. Now, Price, Volume & VIX are bullish; Sentiment is neutral. The Indicator remains BUY, but I think we are near a top so I am waiting.

 

The market remains extremely overbought with the S&P 500 17.1% above its 200-dMA. If past history follows, that tends to cap the gains going forward. The downside risk is greater than the upside risk.

 

Today could have been a top, but probably not. The top will be signaled by a big move up. It looks like a 1% move higher would trip both Bollinger Bands and RSI to the bear side.  If we see that Monday, it would be a good day to short.

 

I’ll continue to keep a low % of funds in the stock market until I see a better buying point.

 

MOMENTUM ANALYSIS:

TODAY’S RANKING OF  15 ETFs (Ranked Daily)

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

 

TODAY’S RANKING OF THE DOW 30 STOCKS (Ranked Daily)

Here’s the revised DOW 30 and its momentum analysis. 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

 

FRIDAY MARKET INTERNALS (NYSE DATA)

Market Internals remained POSITIVE on the market.

Market Internals are a decent trend-following analysis of current market action, but should not be used alone for short term trading. They are usually right, but they are often late.  They are most useful when they diverge from the Index. 

 

Using the Short-term indicator in 2018 in SPY would have made a 5% gain instead of a 6% loss for buy-and-hold. The methodology was Buy on a POSITIVE indication and Sell on a NEGATIVE indication and stay out until the next POSITIVE indication. The back-test included 13-buys and 13-sells, or a trade every 2-weeks on average.  

My current stock allocation is about 30% invested in stocks. You may wish to have a higher or lower % invested in stocks depending on your risk tolerance. 30% is a very conservative position that I re-evaluate daily.

 

The markets have not retested the lows on recent corrections and that has left me under-invested on the bounces. I will need to put less reliance on retests in the future.

 

As a retiree, 50% in the stock market is about fully invested for me – it is a cautious and conservative number. If I feel very confident, I might go to 60%; if a correction is deep enough, 80% would not be out of the question.

Jobless Claims ... ISM Manufacturing ... Trump’s Fraud Claims Hit Barr (Excerpt) … Coronavirus (Covid-19) … Stock Market Analysis … ETF Trading … Dow 30 Ranking

“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.

 

“The big money is not in the buying and selling. But in the waiting.” - Charlie Munger, Vice Chairman, Berkshire Hathaway

 

“Bubbles tend to topple under their own weight. Everybody is in. The last short has covered. The last buyer has bought (or bought massive amounts of weekly calls). The decline starts and the psychology shifts from greed to complacency to worry to panic. Our working hypothesis, which might be disproven, is that September 2, 2020 was the top and the bubble has already popped.” - David Einhorn, Greenlight hedge fund.

 

JOBLESS CLAIMS (CNN.com)

“Another 712,000 Americans filed for unemployment benefits last week on a seasonally adjusted basis, according to the Labor Department, as the job market recovery continues to slow... Continued jobless claims stood at 5.5 million, down from 6.1 million in the week before.” Story at...

https://www.cnn.com/2020/12/03/economy/unemployment-benefits-coronavirus/index.html

 

ISM MANUFACTURING (ISM via prnewswire)

"The November Manufacturing PMI® registered 57.5 percent, down 1.8 percentage points from the October reading of 59.3 percent. This figure indicates expansion in the overall economy for the seventh month in a row after a contraction in April, which ended a period of 131 consecutive months of growth... "Manufacturing performed well for the sixth straight month, with demand, consumption and inputs registering growth, but at slower rates compared to October. Labor market difficulties, both current and anticipated, at panelists' companies and their suppliers will continue to dampen the manufacturing economy until the coronavirus (COVID-19) crisis ends," says Fiore [imothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee].” Press release at...

https://www.prnewswire.com/news-releases/manufacturing-pmi-at-57-5-november-2020-manufacturing-ism-report-on-business-301181920.html

 

TRUMP’S FRAUD CLAIMS HIT A BARR – EXCERPT (WSJ)

“Bill Barr can take the heat, and on Tuesday the stalwart Attorney General guaranteed he’ll get it when he said ‘to date, we have not seen fraud on a scale that could have effected a different outcome in the election.’

Mr. Barr told the Associated Press that allegations of “particularized” fraud, with some that ‘potentially cover a few thousand votes,’ are being explored. But President Trump is down by 150,000 votes in Michigan, 80,000 in Pennsylvania, and 20,000 in Wisconsin. As for the idea that voting machines were compromised, Mr. Barr said the feds “have looked into that, and so far, we haven’t seen anything to substantiate that.’

...Fighting such claims is like whack-a-mole. No, Pennsylvania didn’t count more mail votes than it sent out. No, Wisconsin didn’t have 89% turnout. No, several states didn’t simultaneously quit counting ballots on election night. No, ballots in Arizona filled out with Sharpie markers weren’t discounted. In an election with 155 million votes, there are no doubt irregularities and maybe some fraud. But for Mr. Trump to win the Electoral College, he’d need to flip tens of thousands of votes in multiple states.” – WSJ, Full Editorial at...

https://www.wsj.com/articles/trumps-fraud-claims-hit-a-barr-11606866056

My cmt: This piece is an intelligent read and it debunks the claims by the Trump team, not just the ones I excerpted. The Wall Street Journal leans right, so this is a legitimate criticism.  It just reinforces comments by Gov Christie, Republican, that we highlighted earlier and I am repeating below.

 

CHRISTIE (former NJ GOV) CALLS TRUMP TEAM NATIONAL EMBARASSMENT (CNBC)

“Listen, I’ve been a supporter of the president, I voted for him twice but elections have consequences and we cannot continue to act as if something happened here that didn’t happen,” Christie explained...“They allege fraud outside of the courtroom but when they go inside the courtroom they don’t plead fraud and they don’t argue fraud,” Christie said, adding “you have an obligation to present the evidence, the evidence has not been presented.” Story at...

https://www.cnbc.com/2020/11/22/chris-christie-tells-trump-its-time-to-end-legal-fights-over-election.html

My cmt: Those who continue to support this sham are hurting the country and enflaming those who refuse to consider the facts.

 

CORONAVIRUS (NTSM)

Here’s the latest from the COVID19 Johns Hopkins website at 5:30 pm Thursday. US total case numbers are on the left axis; daily numbers are on the right side of the graph with the 10-dMA of daily numbers in Green.

 

MARKET REPORT / ANALYSIS

-Thursday the S&P 500 slipped about 0.1% to 3667.

-VIX rose about 0.5% to 21.28.

-The yield on the 10-year Treasury slipped to 0.910%.

 

Nasty close today – the S&P 500 lost more than half a percent in the last half-hour of trading to finish in the red for the day. We still have an over-extended market.

 

The S&P 500 was 15.9% above its 200-dMA.

 

The only time in the last 11 years that the S&P 500 has been 15.9% or higher above its 200-dMA was after the 2009 bottom of the Financial Crisis in Sept 2009. Then, the S&P 500 was around 1053, about 56% above the 2009 low. (The S&P 500 is now about 60% above the COVID-low.) The Index managed to gain about 8% in the next 4 months and then gave back those gains in a correction that dropped the Index back to 1057. The Index climbed to its prior high and suffered a 16% correction Apr 2010 – Jul 2010 and the Index bottomed at 1023. My point is that the Index is not likely to make further big gains from its current level as long as the Index remains stretched. 

Today, we had very high, unchanged-volume.  In theory this in an indication that investors are confused and it can signal a reversal, in this case down. I don’t know – sometimes it does; more often than not…not.

 

The daily sum of 20 Indicators increased from +2 to +8 (a positive number is bullish; negatives are bearish). The 10-day smoothed sum that smooths the daily fluctuations dropped from +61 to +58. (These numbers sometimes change after I post the blog based on data that comes in late.) Most of these indicators are short-term and many are trend following.

 

The Long Term NTSM indicator ensemble switched back up to BUY, 24 Nov. Now, Price, Volume & VIX are bullish; Sentiment is neutral. The Indicator remains BUY, but I think we are near a top so I am waiting.

 

I continue to see very bullish indicators; but recently there are signs of a weakening market. For the most part, that trend continues.

 

The market remains extremely overbought with the S&P 500 15.9% above its 200-dMA. If past history follows, that tends to cap the gains going forward.

 

I’ll continue to keep a low % of funds in the stock market until I see a better buying point.

 

MOMENTUM ANALYSIS:

TODAY’S RANKING OF  15 ETFs (Ranked Daily)

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

 

TODAY’S RANKING OF THE DOW 30 STOCKS (Ranked Daily)

Here’s the revised DOW 30 and its momentum analysis. 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)

Market Internals improved to POSITIVE on the market.

Market Internals are a decent trend-following analysis of current market action, but should not be used alone for short term trading. They are usually right, but they are often late.  They are most useful when they diverge from the Index. 

Using the Short-term indicator in 2018 in SPY would have made a 5% gain instead of a 6% loss for buy-and-hold. The methodology was Buy on a POSITIVE indication and Sell on a NEGATIVE indication and stay out until the next POSITIVE indication. The back-test included 13-buys and 13-sells, or a trade every 2-weeks on average.  

My current stock allocation is about 30% invested in stocks. You may wish to have a higher or lower % invested in stocks depending on your risk tolerance. 30% is a very conservative position that I re-evaluate daily.

 

The markets have not retested the lows on recent corrections and that has left me under-invested on the bounces. I will need to put less reliance on retests in the future.

 

As a retiree, 50% in the stock market is about fully invested for me – it is a cautious and conservative number. If I feel very confident, I might go to 60%; if a correction is deep enough, 80% would not be out of the question.

ADP Employment EIA Crude Inventories … Wait till After December (to buy themarket) ... Hussman Commentary Excerpt ... Coronavirus (Covid-19) … Stock Market Analysis … ETF Trading … Dow 30 Ranking

“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.

 

“The big money is not in the buying and selling. But in the waiting.” - Charlie Munger, Vice Chairman, Berkshire Hathaway

 

“Bubbles tend to topple under their own weight. Everybody is in. The last short has covered. The last buyer has bought (or bought massive amounts of weekly calls). The decline starts and the psychology shifts from greed to complacency to worry to panic. Our working hypothesis, which might be disproven, is that September 2, 2020 was the top and the bubble has already popped.” - David Einhorn, Greenlight hedge fund.

 

ADP EMPLOYMENT CHANGE (ADP via prnewswire)

“Private sector employment increased by 307,000 jobs from October to November according to the November ADP National Employment Report®..."While November saw employment gains, the pace continues to slow," said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute.” 

https://www.prnewswire.com/news-releases/adp-national-employment-report-private-sector-employment-increased-by-307-000-jobs-in-november-301183608.html

My cmt:: There were 404,000 jobs added in October. The consensus Investing.com number was 410,000 jobs added.

 

EIA CRUDE OIL INVENTORY (Energy Information Administration)

“U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 0.7 million barrels from the previous week. At 488.0 million barrels, U.S. crude oil inventories are about 7% above the five year average for this time of year.” Press release at...

http://ir.eia.gov/wpsr/wpsrsummary.pdf

 

WAIT TILL AFTER DECEMBER (CNBC)

“It may be a good time to lock in market gains for the year. Credit Suisse’s Jonathan Golub believes the latest all-time highs will run into trouble this month. “If you’re somebody who just came into a boatload of money ... perhaps [wait] until after inauguration,” the firm’s chief U.S. equity strategist told CNBC’s “Trading Nation” on Tuesday. Right now, Golub is most concerned about the impact of rising coronavirus cases and new lockdowns.” Story at

https://www.cnbc.com/2020/12/01/trouble-lurks-for-stock-market-in-december-credit-suisse-warns-.html

 

HYPERVALUATION AND THE OPTION VALUE OF CASH (Hussman Funds)

“One of the most insidious ideas foisted on investors by Wall Street, in tacit cooperation with activist policy makers at the Federal Reserve, is the fiction that zero interest rates offer investors “no alternative” but to speculate in risky securities. Recall that it was exactly this fiction that led investors to chase mortgage securities during the run-up to the 2007 market peak and housing bubble, and its collapse in the global financial crisis...

...The red bars in the chart below show one of the more extreme syndromes of “overvalued, overbought, overbullish” conditions one can define. The specific conditions are shown in the chart text. The bars with yellow shading show instances where this syndrome has been in place, and the S&P 500 dropped at least 7% over the following month. All of these instances, prior to those of the past few days, are shaded yellow.” – John Hussman,  PhD.

Charts and commentary at...

https://www.hussmanfunds.com/comment/mc201201/

 

CORONAVIRUS (NTSM)

Here’s the latest from the COVID19 Johns Hopkins website at 9:25 pm Wednesday. US total case numbers are on the left axis; daily numbers are on the right side of the graph with the 10-dMA of daily numbers in Green.

MARKET REPORT / ANALYSIS

-Wednesday the S&P 500 rose about 0.2% to 3669.

-VIX rose about 2% to 21.17.

-The yield on the 10-year Treasury rose to 0.939%.

 

Regarding the new high on 1 December, I said that only 2.8% of stocks made new 52-week highs at the all-time high. That was not correct. The actual % of new 52-weel highs was 5.2%. That is lower than the 5-year average, but not enough to worry about. Sorry for the bad info.

 

Today’s new-high number was low but not low enough to send a signal.

 

The daily sum of 20 Indicators dipped from +6 to +2 (a positive number is bullish; negatives are bearish). The 10-day smoothed sum that smooths the daily fluctuations dropped from +74 to +61. (These numbers sometimes change after I post the blog based on data that comes in late.) Most of these indicators are short-term and many are trend following.

 

The Long Term NTSM indicator ensemble switched back up to BUY, 24 Nov. Now, Price, Volume & VIX are bullish; Sentiment is neutral. The Indicator remains BUY, but I think we are near a top so I am waiting.

 

I continue to see very bullish indicators; but recently there are signs of a weakening market. We’ll have to see if that trend continues.

 

The market remains extremely overbought with the S&P 500 16.3% above its 200-dMA. If past history follows, that tends to cap the gains going forward.

 

I’ll continue to keep a low % of funds in the stock market until I see a better buying point.

 

MOMENTUM ANALYSIS:

TODAY’S RANKING OF  15 ETFs (Ranked Daily)

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

TODAY’S RANKING OF THE DOW 30 STOCKS (Ranked Daily)

Here’s the revised DOW 30 and its momentum analysis. 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)

Market Internals remained NEUTRAL on the market.

Market Internals are a decent trend-following analysis of current market action, but should not be used alone for short term trading. They are usually right, but they are often late.  They are most useful when they diverge from the Index. 

Using the Short-term indicator in 2018 in SPY would have made a 5% gain instead of a 6% loss for buy-and-hold. The methodology was Buy on a POSITIVE indication and Sell on a NEGATIVE indication and stay out until the next POSITIVE indication. The back-test included 13-buys and 13-sells, or a trade every 2-weeks on average.  

My current stock allocation is about 30% invested in stocks. You may wish to have a higher or lower % invested in stocks depending on your risk tolerance. 30% is a very conservative position that I re-evaluate daily.

 

The markets have not retested the lows on recent corrections and that has left me under-invested on the bounces. I will need to put less reliance on retests in the future.

 

As a retiree, 50% in the stock market is about fully invested for me – it is a cautious and conservative number. If I feel very confident, I might go to 60%; if a correction is deep enough, 80% would not be out of the question.

ISM Manufacturing ... Construction Spending … Uncertain Recovery – FED Chair ... Widow Maker Trade ... Coronavirus (Covid-19) … Stock Market Analysis … ETF Trading … Dow 30 Ranking

“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.

 

“The big money is not in the buying and selling. But in the waiting.” - Charlie Munger, Vice Chairman, Berkshire Hathaway

 

“Bubbles tend to topple under their own weight. Everybody is in. The last short has covered. The last buyer has bought (or bought massive amounts of weekly calls). The decline starts and the psychology shifts from greed to complacency to worry to panic. Our working hypothesis, which might be disproven, is that September 2, 2020 was the top and the bubble has already popped.” - David Einhorn, Greenlight hedge fund.

 

ISM MANUFACTURING (ISM via Prnewswire.com)

“New Orders and Production Growing; Employment Contracting; Supplier Deliveries Slowing at Faster Rate; Backlog Growing; Raw Materials Inventories Growing; Customers' Inventories Too Low; Prices Increasing; Exports and Imports Growing.

Economic activity in the manufacturing sector grew in November, with the overall economy notching a seventh consecutive month of growth, say the nation's supply executives in the latest Manufacturing ISM® Report On Business®...”

https://www.prnewswire.com/news-releases/manufacturing-pmi-at-57-5-november-2020-manufacturing-ism-report-on-business-301181920.html

 

CONSTRUCTION SPENDING (AP / KRQE News)

“U.S. construction spending jumped 1.3% in October, again on the strength of single-family home building.” Story at...

https://www.krqe.com/news/business/us-construction-spending-jumps-1-3-in-october/

 

RECOVERY “EXTRAORDINARILY UNCERTAIN (CNN)

“Federal Reserve Chairman Jerome Powell said the outlook for the United States economy is "extraordinarily uncertain" as the rise in Covid-19 cases continues to take an economic toll on the country. "As we have emphasized throughout the pandemic, the outlook for the economy is extraordinarily uncertain and will depend, in large part, on the success of efforts to keep the virus in check." Powell said in prepared remarks for his testimony on Tuesday to the US Senate Committee on Banking, Housing, and Urban Affairs.” Story at...

https://www.cnn.com/2020/11/30/investing/fed-jerome-powell-economy-coronavirus/index.html

 

WIDOW MAKER TRADE (Real Investment Advice)

“...investors are again chasing “growth at any price” and rationalizing overpaying for growth. As I discussed in the “Death Of Fundamentals:” Such makes the mantra of using 24-month estimates to justify paying exceedingly high valuations today, even riskier...as a “fundamental” and “value” based investor, the lack of performance in value versus growth has undoubtedly been frustrating. However, one of the biggest problems is the astonishing lack of value in “value.”

Chart updated as of November 2020

Commentary and charts at...

https://realinvestmentadvice.com/a-vaccine-wont-cure-the-20-year-widow-maker-trade/

 

CORONAVIRUS (NTSM)

Here’s the latest from the COVID19 Johns Hopkins website at 7:15 pm Tuesday. US total case numbers are on the left axis; daily numbers are on the right side of the graph with the 10-dMA of daily numbers in Green. (I averaged cases over the Holiday.)

MARKET REPORT / ANALYSIS

-Tuesday the S&P 500 rose about 1.1% to 3662.

-VIX rose about 1% to 20.77.

-The yield on the 10-year Treasury was 0.920%.

 

The S&P 500 made another new-high today. Checking the data, we find that only 2.8% of stocks made new 52-week highs at today’s all-time high. Again, that’s a weak number indicating a narrow advance.  We’ve had a couple of good readings for this stat recently, but it’s best to evaluate each case as it comes. This number suggests a correction of greater than 10%.

 

It appears that a number of indicators are close to rolling over. Given the strong move higher today, that’s a bit of a surprise. The % of stocks advancing over the last 10-days is falling; up-volume is falling too, even as the market climbs higher.

 

I think we still need to see Bollinger Bands and RSI turn overbought – that will be the top. I may still have to remain patient as the markets crawl higher.  I don’t think the top is in.

 

The daily sum of 20 Indicators remained +6 (a positive number is bullish; negatives are bearish). The 10-day smoothed sum that smooths the daily fluctuations dropped from +82 to +74. (These numbers sometimes change after I post the blog based on data that comes in late.) Most of these indicators are short-term and many are trend following.

 

The Long Term NTSM indicator ensemble switched back up to BUY, 24 Nov. Now, Price, & VIX are bullish; Sentiment & Volume are neutral. The Indicator remains BUY, but I think we are near a top so I am waiting.

 

I continue to see very bullish indicators. The problem is that the market remains extremely overbought with the S&P 500 16.1% above its 200-dMA. If past history follows, that tends to cap the gains going forward.

 

I’ll continue to keep a low % of funds in the stock market until I see a better buying point.

 

MOMENTUM ANALYSIS:

TODAY’S RANKING OF  15 ETFs (Ranked Daily)

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

 

 

TODAY’S RANKING OF THE DOW 30 STOCKS (Ranked Daily)

Here’s the revised DOW 30 and its momentum analysis. 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

 

TUESDAY MARKET INTERNALS (NYSE DATA)

Market Internals remained NEUTRAL on the market.

Market Internals are a decent trend-following analysis of current market action, but should not be used alone for short term trading. They are usually right, but they are often late.  They are most useful when they diverge from the Index. 

Using the Short-term indicator in 2018 in SPY would have made a 5% gain instead of a 6% loss for buy-and-hold. The methodology was Buy on a POSITIVE indication and Sell on a NEGATIVE indication and stay out until the next POSITIVE indication. The back-test included 13-buys and 13-sells, or a trade every 2-weeks on average.  

My current stock allocation is about 30% invested in stocks. You may wish to have a higher or lower % invested in stocks depending on your risk tolerance. 30% is a very conservative position that I re-evaluate daily.

 

The markets have not retested the lows on recent corrections and that has left me under-invested on the bounces. I need to put less reliance on retests in the future.

 

As a retiree, 50% in the stock market is about fully invested for me – it is a cautious and conservative number. If I feel very confident, I might go to 60%; if a correction is deep enough, 80% would not be out of the question.