“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
NFIB SMALL BUSINESS OPTIMISM (NFIB)
“The NFIB Small Business Optimism Index increased in
August to 100.1, up 0.4 points from July. Five of the 10 Index components
improved, four declined, and one was unchanged... “As the economy moves into
the fourth quarter, small business owners are losing confidence in the strength
of future business conditions,” said NFIB Chief Economist Bill Dunkelberg.
“The biggest problems facing small employers right now is finding enough labor
to meet their demand and for many, managing supply chain disruptions.” Press
release at...
https://www.nfib.com/surveys/small-business-economic-trends/
CONSUUMER PRICE
INDEX (CNBC)
“Prices for an array of consumer goods rose less than
expected in August in a sign that inflation may be starting to cool...The
consumer price index, which measures a basket of common products as well as
various energy goods, increased 5.3% from a year earlier and 0.3% from July.”
Story at...
https://www.cnbc.com/2021/09/14/consumer-price-index-august-2021.html
MAKE THAT 5 IN A ROW (Heriage Capital)
“...while the S&P 500 has been making a series of
higher highs...the NYSE A/D [advance-decline line] keeps hitting a ceiling
around the 60,700 number. This is a non-confirmation or divergence and it’s a
warning sign. Bulls need to see 60,700 exceeded by a fair margin to remove this
caution sign. Without that happening, it will continue to cause me to be a
little skeptical on rallies to new highs.” – Paul Schatz, President Heritage
Capital. Commentary and charts at...
https://investfortomorrow.com/blog/make-that-5/
HUSSMAN FUNDS COMMENTARY (Hussman Funds)
“Among the most persistent questions I hear is why we
don’t just adapt to the reality that the Federal Reserve will never again “allow”
the market to experience a serious decline. The problem with this view is that
it rests on the premise that Federal Reserve policy supports the market in a
clear-cut and mechanical way,
when its effectiveness actually relies on the speculative psychology of
investors...It’s terribly dangerous to assume that the prevailing extreme of
speculative psychology is permanent... it’s useful to consider the possibility
that even enormously good news for public health may not translate into
particularly favorable outcomes for the overall economy.” – John Hussmna, Phd.
Commentary at...
https://www.hussmanfunds.com/comment/mc210912/
More fake news...
NARRATIVE NUKED: NEARLY HALF OF COVID HOSPITALIZATIONS
HAVE BEEN MILD OR ASYMPTOMATIC CASES (ZeroHedge)
From ZeroHedge: “Covid hospitalizations - the most common metric heard
when discussing the seriousness of the pandemic - may not be
nearly as meaningful of a number as many once thought...The Atlantic
published a stunning piece on Tuesday citing a new study that
suggests "almost half of those hospitalized with COVID-19 have mild or
asymptomatic cases".
When I checked The Atlantic article, it included the
following quote: “...the study suggests that roughly half of all the
hospitalized patients showing up on COVID-data dashboards in 2021 may have been
admitted for another reason entirely, or had only a mild presentation of
disease.”
The key here is “may have been admitted for another
reason.” I assure you that at my daughter’s hospital in Richmond, VA, they have
been sending mild cases home for the duration of the pandemic. Hospitals don’t
have room to admit mild cases. Also, as noted in the Atlantic article, looking
at only Veteran’s hospitals is not likely to be representative.
Bottom line: ZeroHedge is fake news again.
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website as
of 5:00 PM Tuesday. U.S. total case numbers are on the left axis; daily numbers
are on the right side of the graph in Red with the 10-dMA of daily numbers in
Green.
I added the smoothed 10-dMA of new cases (in purple) to
the chart. One can see it is off its peak, so perhaps we have seen the worst of
the Delta-variant. Unfortunately, I suspect we may see another peak as Delta
moves to other areas – hope I am wrong.
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 was down about 0.6% to 4443.
-VIX rose about 0.5% to 19.46. (Not much given all the
correction calls.)
-The yield on the 10-year Treasury slipped to 1.291%.
I mentioned yesterday that it was time to see what Mr.
Market had to say about a correction. Apparently, Mr. Market is leaning toward
having one, but he may be tricking us, as is frequently the case. As a
reminder, when everyone thinks the market will go in a certain direction (now the
calls for a correction are widespread), it is more likely to do the opposite. We
need only to look at recent periods of market weakness to see a trend.
On 18 June the index closed slightly below its 50-day and
bounced up. On 19 July, the Index closed slightly above its 50-day and again bounced
up. Today, the 50-dMA of the S&P 500 was 4428. The Index closed at 4443, about 0.3% above the
50-day. So, we are in the zone for a
bounce, but Indicators remain weak.
The daily sum of 20 Indicators remained -10 (a positive
number is bullish; negatives are bearish); the 10-day smoothed sum that smooths
the daily fluctuations declined from -22 to -33. (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 remained HOLD. VIX, Volume, Price & Sentiment indicators are
neutral.
The 50-dMA of the % of issues
advancing on the NYSE remains below 50%. That’s a bearish sign.
So far, this correction has lasted 10-days and is down
2.1% from the top. I’m being facetious – there is no correction. At this point,
it is really a guess whether the markets shake off this weakness and move up...or
break down. The key is, will the S&P 500 close significantly below its 50-dMA?
If it does, that may shake confidence and we might actually have a more meaningful
pullback.
I’m bearish for now, but none
of my long-term indicators are bearish today so I am not confident in calling
the market either way. As is often the case, we’ll have to wait and see.
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 declined to BEARISH 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.
My stock-allocation is now
about 45% invested in stocks; this is slightly below my “normal” fully invested
allocation of 50%.
You may wish to have a higher
or lower % invested in stocks depending on your risk tolerance. 50% is a
conservative position that I consider fully invested for most retirees.
As a general rule, some
suggest that the % of portfolio invested in the stock market should be one’s
age subtracted from 100. So a 30 year
old person would have 70% of the portfolio in stocks, stock mutual funds and/or
stock ETFs. That’s ok, but for older
investors, I usually don’t recommend keeping less than 50% invested in stocks
(as a fully invested position) since most people need some growth in the
portfolio to keep up with inflation.
