Taking Stock - Week of November 30, 2020

Monday, November 30, 2020

Red Arrow Down

DJI30 Index at the close   —-   29,638.64   -271.73 (-0.91%)

The Index opened at 29855, off 56 points, then dropped to 29630 in the first 6 minutes. After a bounce near 29700, it resumed falling, hitting a lo of 29476, off 435, at 10:45.  There was another bounce to 29600 before a drop to the day’s lo of 29464 after 11:30.  From there it was a jerky rise to the close, including a jump of 70 points in the last 2 minutes.

 

All the indexes were down today, with the Russell 2000 as the biggest loser. For what it’s worth, NYSE volume was the greatest since 9/18, and more than double what the average has been since.

This is a clearly down day, with the hi and lo off by 161 and 356 points, respectively. The span was 390.  Momentum is sideways,   Since 11/09 there have been 7 closings under 29500, so this is really going nowhere.  Today’s range is actually in the upper half of the trading range since that date, and the closing is 158 points above the the midpoint of that range.  It’s going to take a bigger fall than this to turn momentum downward.



I do expect that to happen, though, with an intermediate lo occurring around mid-December. This is speculative, of course.  Meanwhile, equities remain wildly over-valued by any historical or rational metric.  But the markets are fueled by emotion, not logic, so this can go on for a considerable time.



But the day of reckoning will come.  It always does.

% Changes -
DJI30 -0.91%
SP500 -0.46%
NASDAQ -0.06%
Russell 2000 -1.91%

DJI30 Closings -
11/30/18 - 25538
01/02/20 - 28869
10/30/20 - 26502
11/27/20 - 29639

NYSE Internals -
A/D = 958/2190 = 0.44
A/D Vol = 0.27
New Hi/Lo = 170/4 = 42.50

Tuesday, December 1, 2020

Green Arrow Up

DJI30 index at the Close   —-   29,823.92   +185.28 (+0.63%)

The Index opened at 29798, up 159 points, and immediately soared up to 29952.  It continued rising, reaching the hi of 30083 at 10:21. It slowly fell to about 29870 just before noon, and stayed between that level and 29950 until 3:00. It then fell below 28850 and stumbled into the close.

This presents a new intra-day hi, but not a new closing hi. It is a clearly up day, with the hi and lo up by 229 and 334 points, respectively.  The span was 286.

Today’s rise caused a slight increase in upward momentum. By my reckoning, this hit a local minimum the day before the election, and has since soared to the 2nd highest level of this century. The highest occurred on 1/31/18, and from there to the Christmas Eve low was an agonizing drop of 16.67% - which nobody seems to remember.

By any rational measure this is a wildly over-valued market.  But rationality submits to exuberance - until one day it doesn’t.  There are severe economic head winds in the near future.  The Fed might be out of silver bullets.  CV-19 is soaring out of control.  Thanksgiving travel will result in a surge upon the surge in the next week or so, and 3 1/2 from now is Christmas, with more travel and more risky gatherings.  Health care workers are already overworked and exhausted.  

There won’t be a wide-spread roll out of any vaccine before Summer, and many on the right will simply refuse to take it, just like they refuse to wear masks - ‘cuz FREEDUMB. Unemployment remains at deep recession levels.  Evictions are about happen for millions of Americans, and there is no relief in sight. January is going to be hell, and it will go on for months.

  

But here we have the stock markets soaring to new highs, with November having been one of the best months in history.  Resistance at 30000 has bent but not broken.  Should that happen, I guess the sky is the limit.  But I keep thinking about Icarus.

% Changes -

DJI30  +0.63% 

SP500 +1.13%   

NASDAQ  +1.28%    

Russell 2000 +0.89%

DJI30 Closings -

11/30/18 - 25538

01/02/20 - 28869

10/30/20 - 26502

11/27/20 - 29824

NYSE Internals -

A/D = 2189/923 = 2.37

A/D Vol = 2.22

New Hi/Lo = 162/3 = 54.00

Wednesday, December 2, 2020

Yellow Arrow Sideways

DJI30 Index at the close   —-   29,883.79    +59.87 (+0.20%)

The index opened at 29695, off 129 points, and within a couple minutes dropped to the lo of 29599, off 225.  It rose to about 29825 at 11:15 and stayed near that level until about 2:30.  It reached 29890 at 3:15 and the days hi of 29903, only 19 points above the close, a half hour later.

The index was in the red from the opening until about 2:30.  Though the close was up a tad, the hi and lo were lower by 181, and 198 points, respectively.  The span was 303.

Motion in all the indexes was similar, and they all would up close to neutral.

Momentum remains sideways.  There’s not much more to say.

% Changes -

DJI30  +0.20% 

SP500 +0.18%   

NASDAQ  -0.05%    

Russell 2000 +0.11%

DJI30 Closings -

11/30/18 - 25538

01/02/20 - 28869

10/30/20 - 26925

11/27/20 - 29884

NYSE Internals -

A/D = 1870/12.51 = 1.49

A/D Vol = 2.21

New Hi/Lo = 105/2 = 21.00

Thursday, December 3, 2020

Green Arrow Up

DJI30 Index at the close   29,969.52   +85.73 (+0.29%)

The index opened at 29921, up 37 points, and reached 39970 3 minutes later.  After drawing back to 39930, it reached 30070 before 11:00 and a hi of 30076 after 11:30.  It slipped back to 30020, then rose to 30070 at 1:00 and fell back to 29960 at 2:00.  But an hour and a half later it reached a new all time intra-day hi of 30111.  It dropped dramatically below 29900 a few minutes later, then lurched about 70 points into the close, for a new all time closing hi.



This is a clearly up day with the hi and lo up by 208 and 278 points, respectively.  The span was a modest 234 points.  The Index keeps creeping higher.  But the momentum curve bent on 11/16 and has been close to flat since.



I don’t know what to make of this.  But I keep reading that we are about to enter a new bull market phase — in what will be the 12th year of a bull market, and when equities are historically over-valued.  Evidently, fundamentals are so last century.



And this is a country where people will not wear masks to save their own lives, and 73 million voted for the treasonous criminal currently occupying the White House.



So there no compelling reason for anything to make any kind of sense.  Enjoy the ride.

% Changes -

DJI30  +0.29% 

SP500 -0.06%   

NASDAQ  +0.23%    

Russell 2000 +0.58%

DJI30 Closings -

12/03/18 - 25826

01/02/20 - 28869

11/03/20 - 27480

12/03/20 - 29970

NYSE Internals -

A/D = 2034/183 = 1.88

A/D Vol = 1.92

New Hi/Lo = 181/2 = 90.50

Friday, December 4, 2020

Green Arrow Up

DJI30 Index at the close   —-   30,218.26   +248.74 (+0.83%)

The index opened at 29990, up 20 points, and immediately surged up to 30048.  Then it was a more gradual rise to 30155 before 11:00.  It hit a hi of 30162 before 12:30.   From there it was mostly sideways around 30150 +/- 25 points, followed by a sharp rise to the new all time hi closing in the last half hour.  The SP500 also hit an all time hi today.

This is a clearly up day with the hi and lo higher by 107 and 113 points, respectively.  But short term momentum remains resolutely sideways. The span was a modest 229 points, the smallest since 205 on 10/13.  

Today marked a new intra-day and closing hi of 30218.26.  The background is today’s dismal jobs report, and vaccine roll out optimism that relies on everyone doing everything perfectly in a pipeline that does not yet exist.  GDP growth has been slipping since Q2, 2018.  Meanwhile, cases, hospitalizations and deaths are setting new records every day, and health care workers are overwhelmed. The entire health care system is on the verge of collapse.  Yet millions continue to believe that  the coronavirus is a hoax.  Not only hospitals but even ambulance companies are struggling to keep up with this crisis - because they are not getting paid.  Evidently, insurance companies consider ambulance services non-essential, and only 11 states offer support.  Unless congress acts quickly, millions of Americans will be evicted in the next few weeks. This winter is going to be the closest thing to hell that any of us have ever experienced.

The stock market is not only disconnected from the underlying economy, the legion of investors [?] and speculators is disconnected from the rest of the population.

Erratum:  I had a wrong number in my data file which led to some mistakes about new highs in previous posts.  To set the record straight, here are the facts. 

The previous intraday hi was 30116.51, set on 11/24.  

This level was approached with a hi of 30110.88 yesterday.  

The only previous closing hi above 30000 was 30046.24, also on 11/24.  

This was not seriously challenged until today.

% Changes -

DJI30  +0.83% 

SP500 +0.88%   

NASDAQ  +0.70%    

Russell 2000 +2.37% [!]

DJI30 Closings -

12/03/18 - 25027

01/02/20 - 28869

11/04/20 - 27848

12/04/20 - 30218

NYSE Internals -

A/D = 2457/668 = 3.68

A/D Vol = 4.51

New Hi/Lo = 279/4 = 69.75