Old Skeet's Barometer Report

[oldskeet]

Hi guys and good morning. As of Wednesday's market close the Big Index was up 1% with a reading of 4238. This puts it up 10.3% year to date. The Barometer finished the day with a reading of 29 (mid range of undervalue). As I write this morning, the futures are up. Let's see how the day goes. Thus far by my math, this week, the Index is up 2.9%. Can it average a percent a day? If so, it will close Friday around a reading of 4322.  If it does,  I think I will pick my come line bet up.

[yogibearbull]

AAII Bull-Bear Spread is -26.0% (very low).

%Above 50-dMA has rebounded some but still oversold at 24.9% for NYSE, 25.20% for SP500.

[uncleharley]

It sounds like everyone is on the same page while reading different paragraphs. This run should be exciting. The weekly chart for the S&P indicates a bump every 200 points or so. Hang on. Happy holidays!!!

[Chahta]

Nov 2, 2023 12:28:39 GMT uncleharley said:

It sounds like everyone is on the same page while reading different paragraphs. This run should be exciting. The weekly chart for the S&P indicates a bump every 200 points or so. Hang on. Happy holidays!!!

'specially since TNX is going down at the same time.

[uncleharley]

The opening volley for the S&P 500 looks like a Gap & Run pattern to me.

[anitya]

Nov 2, 2023 11:28:07 GMT yogibearbull said:

AAII Bull-Bear Spread is -26.0% (very low).

%Above 50-dMA has rebounded some but still oversold at 24.9% for NYSE, 25.20% for SP500.

What is the cut off time for survey yesterday?  Do participants turn in surveys much before cut off time, even when there is a FOMC meeting?  

The low reading is the worst in a year, except during the March banking crisis.

[yogibearbull]

Wednesday Midnight is cutoff for AAII Survey.

[anitya]

Look at fixed income and their adjacents like CEFs and MREITs. 

The trashier the co, the higher its price today.  ARKK is up some 8%.  (MRNA missed earnings and is down 8%.)  

May be this starts the revival for small caps.

Powell probably wishes he could redo that presser.

[oldskeet]

Hi guys. With the gains that took place in the market today I thought I'd post the Barometer report early over later this evening. The Big Index gained 80 points today and closed at 4318 up 1.9%. This puts it's gain since Friday at about 4.9%. With this I am thinking that the easy money has been made. Remember, Congress has to still pass a budget by mid November or pass another Continued Resolution. Otherwise, the Government shuts down. The Barometer scores the Index with a reading of 37 (towards the upper end of fairvalue) as market close. At some point traders are going to be taking near term profits. With this I am thinking of trimming my equity ballast. Have a good evening.

[uncleharley]

The S&P 500 opened today with a Gap & Run pattern. Meaning it now has 4 consecutive up days on above average trading volume. After the strong open, the S&P continued up all day long and closed on strong trading volume as evidenced by the 5 minute intraday chart. This means that the S&P 500 is on a new trend that "under current conditions" should carry it to the moon or perhaps beyond. When conditions change, the direction of the price of the S&P 500 may or may not change, depending on what the change is.  FWIW, the DJI and the Nasdaq Composite made similar moves in price on trading volume that was a little less exuberant.  So did the transports.

[oldskeet]

Hi steelpony10, Thank you your question about recent volume. I wanted to think about how to respond as recent set up activity actually started before October ended and the FOMC held rates as Big Money had been trimming short positions. Inspite of strong seasonal trends, I don't see this throwback rally having long legs as some strong headwinds loom. You have a possible Government shutdown looming, the Ukraine and Russia's special military action along with the Middle East powder keg to name a few things that create strong uncertainty. My recent review shows short interest again on the upswing. For me, I will probably trim my equity ballast position once I hear the stall whistle. Not sure this is the answer you seek; but, it is what it is. Old_Skeet

[archer]

What % of looming government shutdowns have materialized? My impression is that over the years I have heard much more about possible shutdowns than ever actually goes through. Last Gov shutdown was 12/18/2018 through 1/25/2019.

During that time the market fell about 8% the first few days and by the time the shutdown ended it gained about 13% for a total of 5%. Not a bad 5 weeks.

I should add that also on 12/20/18 the Fed raised interest rates .25%

[uncleharley]

This morning economic news seems to indicate this rally may have longer legs than expected with unemployment & wage growth dampening inflation expectations. The 10 yr treasuries futures rate in down to 4.49%.

[oldskeet]

Hi uncleharley, Indeed the market's rebound is surpassing my expectations. Generally, I will plot an exit on my equity ballast and was planning on trimming it today. I have now changed my posture and as long as it continues to climb I will stay with it. When the stall whistle begins to sound, I'll trim.

[uncleharley]

The 10 yr rate has dropped to 4.53% real time and the USD is falling out of bed. Both should be supportive of domestic stock prices unless this turns into a melt-up.

[yogibearbull]

%Above 50-dMA went from 15.09% (oversold) last Friday to 52.33% (positive) today, a huge change. Positive seasonality Nov 1 - Apr 30 kicked in with a big bang!

[anitya]

Nov 3, 2023 14:05:06 GMT oldskeet said:

Hi uncleharley , Indeed the market's rebound is surpassing my expectations. Generally, I will plot an exit on my equity ballast and was planning on trimming it today. I have now changed my posture and as long as it continues to climb I will stay with it. When the stall whistle begins to sound, I'll trim.

oldskeet,uncleharley,

I saw a number of widgets closed at or near today's low and took gains on some specs.  I moved XLU from Roth to Trad IRA, though I was inclined to exit altogether.   $TNX seems to have breached but closed above 50 DMA.

Defensive sectors closed near today's low while high beta group trended lower in the last hour of trading, though HB closed much higher for the day.  Is some of it weekend positioning and in other parts just taking profits? 

Would also appreciate your thoughts on XLU.  

[uncleharley]

Based on a review of the daily and weekly charts for the S&P 500 I am convinced this rally in stocks has legs enough for new highs. However there are some anomalies or deviations which I do not understand at this time. For instance, why was the participation of the Tech sector so minimal? What was the sudden cure for the Banking sector? Why didn't Commodities such as Oil & Industrial metals participate while the USD was tanking? XLU will probably track the S&P, at least until the S&P has set a new high.or

[racqueteer]

I think there's some catch-up going on; if one subscribes to the 'all clear' for equities. SC did very well today, and has, of course, been a laggard with rates rising, and perhaps that's in the rear view mirror. Apple was weak. Perhaps the whole idea of a rotation from the Mag 7 is partially to blame. RSP did outgain the S&P this week.  Possibilities, but who knows?

[anitya]

Nov 3, 2023 21:58:10 GMT uncleharley said:

Based on a review of the daily and weekly charts for the S&P 500 I am convinced this rally in stocks has legs enough for new highs. However there are some anomalies or deviations which I do not understand at this time. For instance, why was the participation of the Tech sector so minimal? What was the sudden cure for the Banking sector? Why didn't Commodities such as Oil & Industrial metals participate while the USD was tanking? XLU will probably track the S&P, at least until the S&P has set a new high.or

+1  The normal “like” would not do justice.

I may be overreading racqueteer that he is calling peak rates at the belly and long end of the curve.

May be you guys would not mind calling the low of the current move down for ^TNX.  4.2-4.3%?

[oldskeet]

Hi guys. One of the most interesting weeks took place this week in investing as the S&P500 Index gained 241 points which equated to a 5.85% gain. The US10YrT yield fell 28 basis points closing the week with a yield of 4.56%. Old_Skeet's Barometer went from a reading of 17 (oversold) to a reading of 46 (fairvalue).

Perhaps, we will learn more tomorrow as to what drove this fast and furious recovery when YBB post his recap of Barron's. For now, I am quite baffled. I anticipated an upward move but certainly not at this magnitude. Shazam!

From my perspective, it must have been a lot of short coverings, interest rates declined, oil pulled back, and the FOMC head wizard walked the fence line leaving the door open for higher rates for longer. And, the crowd goes wild. Earnings are good but not great and forward guidance leaves doubts. The consumer is spending but there are signs of weakness. Even though we have entered a seasonal period where stocks generally perform their best I am indeed leary if this continues with a possible US Government shutdown looming if Congress can not formulate and pass a budget by mid November.

Right now I am happy with the stock market gains that took place this week. The Big Question, for me, will they stick?  Perhaps, this is a throwback rally of sorts because of an extremely oversold condition.  Shorts covered and other investors jumped in for the fear of missing out.  I am thinking in a week, or so, we might have an answer.

[anovice]

Nov 3, 2023 22:32:53 GMT racqueteer said:

I think there's some catch-up going on; if one subscribes to the 'all clear' for equities. SC did very well today, and has, of course, been a laggard with rates rising, and perhaps that's in the rear view mirror. Apple was weak. Perhaps the whole idea of a rotation from the Mag 7 is partially to blame. RSP did outgain the S&P this week.  Possibilities, but who knows?

Does Schwab have a S&P 500 equal weight ETF or mutual fund?

[oldskeet]

Hi anovice , I use VADAX for my equal weight S&P500 Index fund. The etf I have used is RSP.   Both of these are available at Charles Schwab. I am not sure if Schwab has an equally weighted fund of it's own.  You might call them and ask.

[racqueteer]

What oldskeet said... When I use it, RSP has been my choice for quick in and out if necessary (and no fee).

[oldskeet]

Good morning guys. Here is the Barometer report for Monday November 6th market close. The S&P500 Index closed with a reading of 4365 up 7 points for the day; and, the US10YrT with a yield of 4.66% up 10 basis points. The Barometer dropped a point to a reading of 45 (fairvalue). For me the major headwind is Congress as it tries to formulate and pass the Budget. Currently the Government is operating on a CR which expires on November 17th. This creates a great deal of uncertainty which by my thinking will limit upside for the Index and most likely cause it to decline should the Government shutdown. By the way, short interest is up over the past couple of days. Take care everyone and I will try to continue with daily updates. OS

[FD1000]

The budget? ..if that was the problem why the SP500 was up 6% in about a week?
Or maybe because it was up so quickly the market has to digest it.

[anitya]

Nov 7, 2023 13:11:36 GMT FD1000 said:

The budget? ..if that was the problem why the SP500 was up 6% in about a week?
Or maybe because it was up so quickly the market has to digest it.

If you are reacting to Oldskeet’s post, may be reread his post.  His mention of the upcoming “passing the budget” is in the context of his speculating short-intermediate term market future and you are questioning that by pointing to a snippet of immediate past.   I do not see anything illogical in his post.  If you think it is illogical, let us have a forum poll on how many members think it is illogical and may be I will learn something new.

if you end up deleting your post, I will delete this post.

[oldskeet]

Hi guys. The Index has, thus far, in this throwback rally of sorts recovered about half of what has been lost but remains down about 5% from it's 52 week high. Headwinds can become spoilers very quickly as (again) a possible US Government shutdown looms, transports are all down as shipping volumes are down, and high interest rates along with high credit card balances are slowing consumer spending. Thus far, recent Corporate earnings reporting have been decent with forward guidance not so good. What's this saying? For me it's saying, govern with caution.

On the Index, it closed Tuesday with a reading of 4378 up 13 points for the day. The US10YrT closed with a yield of 4.57% down 9 basis points for the day. For the Barometer it gave up 2 points and closed the day with a reading of 43 (low side of fairvalue).

I am thinking in about a week, of so, we will have better knowledge about where the market is heading. For me, the near term is very questionable and I am not putting any new money to work in equities.

You are welcome to post your thinking and comments. Just know I do not plan to get into sparring words with any of you.  We all have thoughts and at times they differ.  But, there again, that what makes the market.

Wishing All ... Good Investing!

Old_Skeet

[uncleharley]

Nov 8, 2023 8:10:52 GMT oldskeet said:

I am thinking in about a week, of so, we will have better knowledge about where the market is heading. For me, the near term is very questionable and I am not putting any new money to work in equities.

I and the S&P 500 agree with you. Over the past 3 or 4 weeks the daily chart for the S&P has formed most of an inverted H&S pattern. All that is left to do is to have a couple of flat trading days to complete the right shoulder and perform a bullish break above the neckline of the H&S pattern. The pattern would then project a 5% or so increase in value which would challenge the recent high of the S&P.

[oldskeet]

Hi uncleharley, Thanks for your being an on-going contributor to the thread. Your insights are meaningful for readers and you present your thoughts in a most well received manner. Thank you. OS