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-- Brad Delong

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Monday, November 2, 2020

Taking Stock - Week of November 2, 2020

Disclaimer:  I am not a financial advisor nor stock market professional; nor am I in any way qualified to make recommendations.  I’m just an old man with curiosity, an attitude and an internet connection. I realized long ago that I see the world differently from most people, and l am looking at these things for my own amusement and amazement.  Maybe you will be amused, as well.

Monday November 2, 2020

Green Arrow Up

DJI30 Index at the close   —-   26,924.92   +423.32 (+1.60%

The index opened at 26691, up 190 points, and immediate shot up to 26851.  After a brief slide back to 26730, It hit the day’s hi of 27043, up 541 at about 10:20.  It dropped to 26830 before 11:30, rose to 26975 at 11:45, then slowly dropped to a minimum around 26700 around 2:00.  It rose again, topping at about 26960 at 3:30.  From there it was a drop to 26815, and a 110 point leap to the close in the last few minutes.

This is a clearly up day with the hi, lo, and close higher by 404, 548 and 423 points respectively.  The lo to hi spread was 352.  An increase of 423 points looks impressive - at first.  But in the context of a drop of almost 2300 points from the 10/23 hi it really isn’t. Further, the early day hi was up 542 points, but the next two local highs were lower.  This sequence looks to be counter-current, with the major thrust still down.

The rise today is no surprise.  Nothing moves in a straight line  I thought this might happen last Friday, and the 295 point surge in the last few minutes was the beginning of the rally that lasted into this morning.  The rest of today was lack-luster, but the counter-current move could continue into tomorrow, or even for several days.  There’s quite a bit of room for movement on the upside, without changing the basic bearish picture.

There might be robust resistance in the low 27000s.  And there looks to be a support range between 26000 and 26500.  This is a rather narrow range that will likely break soon, one way or the other.  My guess is that the wave down continues.

% Changes
DJI30 +1.6% Positive all day
SP500 +1.23% Positive all day
NASDAQ +0.42% Dipped into negative territory before rising into the close
Russell 2000 +1.96% Positive all day

DJI30 Closings -
11/02/18 - 25721
01/02/20 - 28869
10/02/20 - 27683
11/02/20 - 26925

NYSE Internals -
A/D = 2275/797 = 2.85
A/D Vol = 5.43
New Hi/Lo = 32/29 = 1.10

Tuesday, November 3, Election Day 2020

Green Arrow Up

DJI30 Index at the close    —-   27,480.03+554.98 (+2.06%)

The Index opened at 27139, the day’s lo, up 214 points, and immediately shot further to 27253, up 318.  There was a steady, but less dramatic rise to 27600, before 10:30.  After drawing back 100 points, it reached a hi of 27613 after 11:30.  It then slid back to about 27350 at 2:00. From there it was a jagged rise to the day’s hi of 27640, up 715, before sliding 160 points in the last 6 minutes, giving up 22% of the day’s gain..

This is another clearly up day with the hi, lo and close up by 597, 447, and 555 points, respectively.  The day’s span was 502.

Yesterday I said, “There’s quite a bit of room for movement on the upside, without changing the basic bearish picture.”  Todays action used up quite a bit of it.  If the 2293  point drop from the 28437 hi on 10/23 to the 26144 lo on 10/30 is a complete wave down at some level of trend, the rise to today’s top of 27640 is a 65.3% retracement, a bit over the Fibonacci target at 61.8%; and that is plenty to complete the following counter-current wave.  But that is not definitive.  This year has had some low probability moves, and it looks like the bulls are not eager to give in.  So the next few days could be both interesting and volatile.

But the Index had three shots at the level where the 55 day EMA and round number resistance near 27600 converge.  Resistance there bent a bit, but did not break.  The sharp fall in the closing minutes might signal the end of this surge - Maybe.

% Changes - [each Index was Positive all day]

DJI30 +2.06%
SP500 +1.78%
NASDAQ +1.85%
Russell 2000 +2.91%

DJI30 Closings -

11/02/18 - 25721
01/02/20 - 28869
10/03/20 - 27683
11/03/20 - 27480

NYSE Internals -

A/D = 2480/585 = 4.24
A/D Vol = 4.77
New Hi/Lo = 62/13 = 5.79

Wednesday, Nov. 4, 2020

Green Arrow Up

DJI30 Index at the close   —-   27,847.66   +367.63 (+1.34%)

The Index opened at 27513, up 33 points, and quickly shot up to 27773, up 293.   After sliding back to 27560, it took off again, reaching 28136 up 656 before 10:30.  It dropped back to 27950 about a half hour later, then worked it’s way up to 28149, up 669.  Before 12:30 it reached the day’s hi at 28302, up 821 points.  From there, it was an accelerating drop of 454 points into the close, including 83 points in the last 6 minutes.

Yesterday, the Index gave back 22% of the gain from the intra-day hi.  Today it was 55%.  If this kind of action means anything, I wish I knew what it was.  With all of that, this was a clearly up day, with the, hi, lo and close up by the large margins of 661, 374 and 368 points, respectively.  The lo to hi span was 789.

Markets aren’t supposed to like uncertainty.  Yet here we are with huge gains over the last 2 days, in the midst of what will certainly be a contested election, with a raging world-wide pandemic, and dim chances for stimulus any time soon - things that allegedly brought stocks sharply down just a few days ago don’t matter this week. Meanwhile Nike announces it will increase the number of employment cuts in Oregon from 500 to 700, and GDP growth topped 6 quarters ago.  So much winning!

% Changes - among the Indexes, only the Russell spent some time in the red
DJI30 +1.34% 
SP500 +2.20%   
NASDAQ +3.85%    
Russell 2000 +0.05%  

DJI30 Closings -
11/02/18 - 25721
01/02/20 - 28869
10/02/20 - 27683
11/03/20 - 27848

NYSE Internals -
A/D = 1699/1367 = 1.22
A/D Vol = 0.84
New Hi/Lo = 92/14 = 6.57

Thursday, Nov 5, 2020

Green Arrow Up
DJI30 Index at the close   —-   28,390.18 +542.52 (+1.95%)

The index opened at 28083, the day’s lo, up 236 points.  It peaked at 28495, up 647 before 10:30, bumped up against it again at 11:00, then fell to about 28225 at 12:30.  It rose up near the hi again at 2:45, then meandered into the close, about 100 points lower.

This is another clearly up day, with the hi, lo, and close up by 194, 571 and 543 points respectively.  The lo to hi span was 412 points.  No further analysis tonight. I raked leaves and am tired.

% Changes - all the Indexes were in the green all day
DJI30 +1.95% 
SP500 +1.95%   
NASDAQ +2.59%    
Russell 2000 +2.78%  

DJI30 Closings -
11/02/18 - 25462
01/02/20 - 28869
10/05/20 - 28149
11/05/20 - 28389

NYSE Internals -
A/D = 2467/605 = 4.08
A/D Vol =  5.32
New Hi/Lo = 160/17 = 9.41

Friday, Nov. 6, 2020

Yellow Arrow Sideways
DJI30 Index at the close   —-   28,323.40-66.78 (-0.24%)

The Index opened at 28399, up 9 points, immediately dropped to 28271, then fell further to a low of 28190, off 201.  It recovered back to 28392 before 11:00, then dropped to 28265 in about 5 minutes, then back up in the next 10.  It gyrated between 28325 and 28400 over the next hour, then dropped to 28280 after 12:30.  It was in the range of 28326 to 28360 until 2:30, then dropped to 28260 after 3:00.  The last 40 minutes were a wild ride up to the day’s hi of 28432 followed by a 109 point fall in the last 10 minutes.

These are a lot of gyrations to not go very far.  But this action did bring to a close the gains of the week - though without giving back much.  The range of 28400 to 28500, more or less, looks like a resistance region.  Two of the last 3 rises over the last two months have briefly exceeded it; the attempt on September 16 did not, topping out at 28365. But that was in the midst of a fall of almost 3000 points.

For the first time in a week, the Index closed down, if only by a little.  There was also a lower hi but a higher low, making this an inside day - and hence the yellow arrow. The range was 242 points, down a lot from yesterday’s 412, and the lowest since 10/13.  The 10 day average is 506.

The current rise was about 2000 points in a week.  And if it is now complete, this marks a sequence of 3 lower highs.  By my reckoning, upward momentum peaked on 9/02, and has had a slight downward tilt since.  One can never be too certain about these things, but I think the exuberance that propels the market upward is just about exhausted.  

% Changes - the Indexes were close to neutral most of the day
DJI30 -0.24% 
SP500 -0.03%   
NASDAQ +0.04%    
Russell 2000 -0.96%  

DJI30 Closings -
11/02/18 - 25635
01/02/20 - 28869
10/05/20 - 27773
11/05/20 - 28323

NYSE Internals -
A/D = 1175/1869 = 0.63
A/D Vol =  0.83
New Hi/Lo = 134/22 = 6.09

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