“Cancel culture, woke history, and pro-Hamas protests
blaming Israel for the October 7th massacre make one wonder, what are they
teaching our future generations of Americans?”
- Michael Ramirez. Commentary at...
https://michaelramirez.substack.com/p/michael-ramirez-essay-fall-of-rome?r=ntzh3&utm_campaign=post&utm_medium=web
“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 rose about 0.3% to 4378.
-VIX fell about 0.5% to 14.81.
-The yield on the 10-year Treasury rose to 4.569%.
PULLBACK DATA:
-Drop from Top: 8.7%. 25.4% max (on a closing basis).
-Trading Days since Top: 464-days.
The S&P 500 is 3% ABOVE its 200-dMA and 0.8% ABOVE
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 (25%
decline) 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:
The S&P 500 has now made 7 consecutive up-days.
Surely, we’ll see a down day...some day?
Markets don’t go up for ever and when I look at sentiment, it is bullish
because a lot of investors are betting against this rally and are bearish. I
don’t get that. Markets are coming off the bottom of a 10% correction that
started in late July 2023 and finished on Friday 27 October. Further, markets bottomed
in October of 2022 after a bear market decline of 25%. Sicne then, the trend
has been up and the feared recession hasn’t materialized - the least line of
resistance is up.
Breadth is still not great: both the 50-dMA and the 100-dMA
of the % of issues advancing on the NYSE are below 50%. In other words, over
those 50 and 100-day time frames, less than half of issues on the NYSE have gone
up. It has improved, but not enough to give the all-clear.
Still, in the end, price counts the most and the S&P
500 has been going up-up-up.
The daily spread of 20 Indicators (Bulls minus Bears) declined
from +13 to +8 (a positive number is bullish; negatives are bearish); the
10-day smoothed sum that smooths the daily fluctuations improved from -19
to zero. (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 BUY: PRICE, VOLUME & SENTIMENT are bullish; VIX is neutral.
(The important major BUY in this indicator was on 21
October 2022, 7-days after the bear-market 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
Short-term correction over – I’m bullish. The markets are
going higher. Can we make new all-time highs and end the Bear Market that is
still hanging around since October of 2021? I think so, and it looks like a lot
of investors agree, but we’ll see.
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
TUESDAY 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.)
...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.
“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
“Trump chief of staff Mark Meadows is granted immunity
while other Trump associates plead guilty.” — Michael Ramirez. Political
commentary at...
https://michaelpramirez.com/index.html
"I call them the 'J-6 hostages,' not prisoners. I
call them the hostages, what’s happened? And it’s a shame." - Donald Trump, at his campaign rally
Thursday, referred to January 6 rioters as “hostages.” My guess is that he will pardon them if he is
elected President. Trump’s actions since November of 2020 have been dishonest, disgraceful
and seditious.
“Conservative former federal Judge Michael Luttig warned
on Friday's edition of MSNBC's "Deadline: White House" that former
President Donald Trump is an ongoing threat to the constitutional order, and
reiterated that he must be barred from returning to office.” From...
'Imminent
danger to America': Conservative judge says Constitution must disqualify Trump
(msn.com)
The 14th Amendment of the United States Constitution
states:
Section 3.
“No person shall be a Senator or Representative in
Congress, or elector of President and Vice President, or hold any office, civil
or military, under the United States, or under any state, who, having
previously taken an oath, as a member of Congress, or as an officer of the
United States, or as a member of any state legislature, or as an executive or
judicial officer of any state, to support the Constitution of the United
States, shall have engaged in insurrection or rebellion against the same, or
given aid or comfort to the enemies thereof. But Congress may by a vote of
two-thirds of each House, remove such disability.”
My cmt: Trump’s attorneys are arguing that Trump, as
President, was not an “officer of the United States.” Of course, the main issue
is, did Trump engage in “insurrection or rebellion?” Another issue - the clause
doesn’t require a conviction, but that doesn’t mean that another part of the
constitution might be interpreted otherwise. The final report of the January 6
House Committee recommended disqualifying Trump from holding office based on
the 14th Amendment. I suspect that Colorado will disqualify Trump and we should
have a ruling this month. Whether that
holds up on appeal is the big unknown.
“While we will keep an open mind, the move thus far looks
more like a bear market rally rather than the start of a sustained upswing,
particularly in light of weaker earnings revisions and macro data.” – Mike
Wilson, Morgan Stanley client note.
MARKET REPORT / ANALYSIS
-Monday the S&P 500 rose about 0.2% to 4366.
-VIX fell about 0.1% to 14.89.
-The yield on the 10-year Treasury rose to 4.637%.
PULLBACK DATA:
-Drop from Top: 9%. 25.4% max (on a closing basis).
-Trading Days since Top: 463-days.
The S&P 500 is 2.7% ABOVE its 200-dMA and 0.4%
ABOVE 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 (25%
decline) 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:
Amazing to see the S&P 500 has made 6 straight
up-days. Surely, we’ll see a down day Tuesday, but it isn’t a given – only 10
of the last 20-days and 7 of the last 10-days have been up days. That’s
elevated, but not a sell sign.
While I don’t agree with Mike Wilson’s view (above) he
could be right. We should remember that Mike Wilson didn’t believe in the October
2021 bottom either, so apparently, he expects the S&P 500 to trade back to
October lows and/or lower since he is calling the current rally a bear market
rally. If we are in a scenario like 1998-2000 we could see some real trouble
ahead. There was a 20% decline in late summer of 1998, but then markets powered
higher to a blow-off top in March of 2000. Since we made a bottom in the fall
of 2021, we might expect a high early in 2024. I’m not buying it though. So
far, we haven’t seen much “irrational exuberance,” so I am not expecting the
crash Mr. Wilson is predicting (or even another pullback soon) unless we see
some big gains and extreme PE levels. The other “if” is the economy. Most of
the bears are betting on a recession – could be, but so far signs are muted.
The Index has broken the down trend, or not, depending on
the scales used to draw the charts. That’s one reason I like to use the 50-dMA
as a proxy for the trend line. Given that view, it is very bullish that the
S&P 500 closed above its 50-dMA again today.
The Friday summary of indicators was also a bullish 4 bear
and 18-Bull signs.
I’ll stand by my
earlier comment: Indicators are confirming what we have suspected for a week –
correction over The bottom WAS Friday 8 days ago.
The daily spread of 20 Indicators (Bulls minus Bears) improved
from +11 to +13 (a positive number is bullish; negatives are bearish); the
10-day smoothed sum that smooths the daily fluctuations improved from -44
to -19. (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
BUY: PRICE, VOLUME & SENTIMENT are bullish; VIX is neutral.
(The important major BUY in this indicator was on 21
October 2022, 7-days after the bear-market 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
Short-term correction over – I’m bullish. The markets are
going higher. Can we make new all time highs and end the Bear Market that is still hanging around since October of
2021? I think so, but we’ll see.
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
MONDAY 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.)
...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.
“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
“US Snow Cover Highest in Decades with Winter Still 7
Weeks Away. Snow was on the ground in 18% of the continental US on Wednesday
morning... It was the most extensive early November snowfall in at least two
decades, the report said.” Story at...
US
Snow Cover Highest in Decades with Winter Still 7 Weeks Away (msn.com)
From...
https://jensorensen.com/2014/01/06/cartoon-scientists-global-warming-snowstorm/
BIDEN’S DELAWARE
BEACHES STAND AS A REBUKE TO HIS CLIMATE ALARMISM (Washington Examiner)
“...a 1995 New York Times report headlined “Scientist Say Earth’s Warming
Could Set Off Wide Disruptions...at the most likely rate of rise, some experts
say, most of the beaches on the East Coast of the United States would be gone
in 25 years.” Really. Well, here it is more than 25 years later, and most of
the East Coast beaches are decidedly intact, thank you very much. Heller has
posted a plethora of information about why and how the alarmists
have been wrong about the projected rise of sea levels and why much (although,
of course, not all) of the conventional wisdom about climate change is actually
junk science.” Story at...
Biden’s
Delaware beaches stand as rebuke to his climate alarmism (msn.com)
Climate alarmism is pervasive. While the experts say that
individual storm events cannot be blamed on climate change, the Weather Channel
continues to blame climate change for every extreme event.
PAYROLL REPORT / UNEMPLOYMENT RATE / AVG HOURLY EARNINGS (CNBC)
“Nonfarm payrolls increased by 150,000 for the
month, the Labor Department reported Friday, against the Dow Jones
consensus forecast for a rise of 170,000... The unemployment rate rose to 3.9%,
the highest level since January 2022... Average hourly earnings, a key measure
for inflation, increased ... the 4.1% year-over-year gain was 0.1 percentage
point above expectations. ” Story
at...
https://www.cnbc.com/2023/11/03/jobs-report-october-2023-us-payrolls-increased-by-150000-in-october-less-than-expected.html
My cmt: The report suggests the FED won’t raise rates
again. The UAW strike was responsible for lowered job creation so its
questionable if the report is as bullish as the market seems to think. But why
complain? Mr. Market is always right.
ISM NON-MANUFACTURING (ISM via prnewswire)
"In October, the Services PMI® registered 51.8
percent, 1.8 percentage points lower than September reading of 53.6 percent.
The composite index indicated growth in October for the 10th consecutive month
after a reading of 49.2 percent in December 2022,
which was the first contraction since May 2020 (45.4
percent).” Press release at...
https://www.prnewswire.com/news-releases/services-pmi-at-51-8-october-2023-services-ism-report-on-business-301976221.html
MARKET REPORT / ANALYSIS
-Friday the S&P 500 rose about 0.9% to 4358.
-VIX fell about 5% to 14.91.
-The yield on the 10-year Treasury declined to 4.577%.
PULLBACK DATA:
-Drop from Top: 9.1%. 25.4% max (on a closing basis).
-Trading Days since Top: 462-days.
The S&P 500 is 2.6% ABOVE its 200-dMA and 0.2%
ABOVE 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:
We got a Goldilocks Jobs Report Friday and the ISM
non-Manufacturing showed a small slow-down in the expansion. Markets liked the
news - “Looking good Billy Ray! Feeling good Lewis!”
We look at a summary of indicators on Friday. (These
indicators tend to be both long-term and short-term, so they are different than
the 20 that I report on daily.) The weekly rundown of indicators made a sharp u-turn
to the Bull side this week, now 4-bear and 18-bull.
BULL SIGNS
-There was a Follow-thru Day 2 November. This cancels all
Distribution Days/
-There have been 6 Statistically-Significant days (big
moves in price-volume) in the last 15-days. Coming off the bottom, this
reinforces bullishness.
-The smoothed advancing volume on the NYSE is rising.
-The 10-dMA percentage of issues advancing on
the NYSE (Breadth) is below 50%.
-MACD of the percentage of issues advancing on the NYSE
(breadth) made a bullish crossover 12 October.
-Smoothed Buying Pressure minus Selling Pressure.
-MACD of S&P 500 price made a bullish crossover 2
Nov.
-My Money Trend indicator is rising.
-Short-term new-high/new-low data.
-Long-term new-high/new-low data.
-Slope of the 40-dMA of New-highs is rising.
-McClellan Oscillator.
-On average, the size of up-moves has been larger than
the size of down-moves over the last month.
-The 5-day EMA is above the 10-day EMA, so short-term
momentum is bullish.
-There were back-to-back, high up-volume days (80%+) on the
NYSE 2 & 3 Nov.
-65% of the 15-ETFs that I track have been up over the
last 10-days. (45-55% is neutral.)
-Sentiment is overly bearish (a bullish sign) on
preliminary numbers. Final numbers are in tonight and this one could change
back to neutral.
-S&P 500 spread vs. Utilities (XLU-ETF) turned sharply
and has been headed in a bullish direction for the last 3 days.
NEUTRAL
-Bollinger Band Squeeze 28 April - expired.
-Bollinger Bands.
-Overbought/Oversold Index (Advance/Decline Ratio).
-Issues advancing on the NYSE (Breadth) compared to the
S&P 500.
-12 October there was a Bearish Outside Reversal Day.
I’ll keep this in effect for 5 days and until the McClellan Oscillator turns
bullish. - Expired
-There was a New-high/New-low spread reversal on 4 October
(based on std deviation of spread). The spread doesn’t have to turn positive
for this indicator to be bullish, it just has to improve a lot. - Expired
-The S&P 500 is 2.6% above its 200-dMA. (Bear
indicator is 12% above the 200-day.)
-The short-term, 10-day EMA, Fosback Hi-Low Logic Index.
-The long-term, 50-dEMA, Fosback Hi-Low Logic Index.
-There were Hindenburg Omen signals 11 & 12 Sept 2023
– expired. The McClellan Oscillator turned positive.
-There have been 6 up-days over the last 10 sessions.
-There have been 10 up-days over the last 20 sessions.
-There was a Zweig Breadth Thrust 31 March. That’s a
rare, very-bullish sign, but the McClellan Oscillator subsequently turned
negative, so this indicator has expired.
-The Calm-before-the-Storm/Panic Indicator flashed a top
warning signal 15 Sept., but it may well have been a bottom signal. - Expired
-The graph of the 100-day Count (the 100-day sum of
up-days).
-RSI.
-The Smart Money (late-day action).
-VIX indicator.
-There was a 90% down-volume day 21 Sept.
-2.8% of all issues traded on the NYSE made new, 52-week
highs when the S&P 500 made a new all-time-high, 3 January 2022. (There is
no bullish signal for this indicator.) This indicated that the advance was too
narrow and a correction was likely to be >10%. It proved correct, but is now
Expired.
-The 5-10-20 Timer System is HOLD.
BEAR SIGNS
-The 50-dMA percentage of issues advancing on the NYSE
(Breadth) is below 50%
-The 100-dMA percentage of issues advancing on
the NYSE (Breadth) is below 50%
-The 50-dMA percentage of issues advancing on the NYSE
(Breadth) has been below 50%, for more than 3 days in a row.
-XLI-ETF (Cyclical Industrials) vs the S&P 500.
On Monday’s update of the Friday summary of indicators (20
December 2021), 9 days before the top of the current 25% correction, there were
21 bear-signs and zero bull-signs. Now there are 4 bear-signs and 18-Bull.
Last week, there were 19 bear-sign and 3 bull-signs.
Indicators are confirming what we have suspected all week
– correction over! The bottom WAS last Friday.
The daily spread of 20 Indicators (Bulls minus Bears) improved
from +9 to +10 (a positive number is bullish; negatives are bearish); the
10-day smoothed sum that smooths the daily fluctuations improved from -66
to -45. (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 BUY: PRICE, VOLUME & SENTIMENT are bullish; VIX is neutral.
(The important major BUY in this indicator was on 21
October 2022, 7-days after the bear-market 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
Correction over – I’m bullish. The markets are going higher.
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
FRIDAY 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.)
...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.
“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
JOBLESS CLAIMS (MarketWatch)
"The number of Americans who applied for unemployment
benefits last week rose by 5,000 to a seven-week high of 217,000, suggesting
some softening in a sturdy U.S. labor market.” Story at...
https://www.marketwatch.com/story/jobless-claims-climb-to-7-week-high-of-217-000-but-layoffs-still-quite-low-0e078397
PRODUCTIVITY (UPI)
“Labor costs took an unexpected dip in the third quarter
of 2023, as productivity increased, according to data released Thursday.
Labor non-business productivity was up 4.7% in the third
quarter of 2023, the biggest gain since 2020...” Story at...
https://www.upi.com/Top_News/US/2023/11/02/labor-costs-down-BLS/5961698937216/
FACTORY ORDERS (US News)
“New orders for U.S.-made goods increased more than
expected in September, boosted by strong demand for computers and electronic
products among others, but higher borrowing costs remain a challenge for
manufacturing.
Factory orders jumped 2.8% after rising 1.0% in August...”
Story at...
https://money.usnews.com/investing/news/articles/2023-11-02/us-factory-orders-surge-in-september
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 rose about 1.9% to 4317.78.
-VIX fell about 7% to 15.66.
-The yield on the 10-year Treasury declined to 4.661%.
PULLBACK DATA:
-Drop from Top: 10%. 25.4% max (on a closing basis).
-Trading Days since Top: 461-days.
The S&P 500 is 1.7% ABOVE its 200-dMA and 0.7%
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:
Great day today: The S&P 500 finished almost 2% above
its 200-dMA; today was a Follow-thru day; MACD of price made a bullish
crossover. There was a significant improvement in the Friday Summary of
Indicators and I expect we will see that reinforced Friday when we do the
Friday rundown.
Volume was up today – a nice sign that a lot of investors
agree that the correction may be over.
Bonawyn Eison said on CNBC’s Fast Money that he was
concerned that Real Estate and Financials led the market today. For the record,
Energy led today and that’s good. It suggests no looming recession, although
everyone seems to expect a recession in 2024. Further, the reason Real Estate
and Financials had big days today has to do with the impression that the FED is
done. I don’t expect Real Estate and
Financials to continue to lead so I am not worried about his comment, even
though he is a smart fellow. My thought, “Don’t look a gift bull in the mouth!”
How’s that for confusing metaphors?
I wouldn’t be surprised to see a down day tomorrow. The
S&P 500 has seen 4 days straight-up and Thursday was a statistically
significant up-day. That just means that the price-volume move exceeded my
statistical parameters. Statistics show that a statistically-significant,
up-day is followed by a down-day about 60% of the time.
The daily spread of 20 Indicators (Bulls minus Bears) improved
from +2 to +9 (a positive number is bullish; negatives are bearish); the 10-day
smoothed sum that smooths the daily fluctuations improved from -82 to
-66. (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 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
Repeating the previous note: 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 needs to break above its upper trend
line and the 50-dMA around 4350. Then we can say with confidence the correction
is over.
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) SPY
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
THURSDAY MARKET INTERNALS
(NYSE DATA)
My basket of Market Internals improved to 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.)
...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.
“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.
