Market Update Nov 9 2022

[tkpol]

Am I understanding the latest MU correctly? Sell the majority of our equity holdings when the DJI moves <1% higher?

[MarkD]

That's what I read. But if you noticed, there was rotation the past two days. The Dow led has been in the lead but money appears to be moving. Sol also indicated he may move the goalposts up a notch on the Dow target.

FWIW, the market tends to move in the opposite direction of the prior weeks move during OPEX week. A pullback or sideways consolidation is highly likely, expecially with the huge move the past two days. Notice that UNH dumped hard and held the Dow back. Might be others as BA has had a huge run and certainly could see that one retracing some amount also.

[phillCC]

The Dow High for 11nov2022 is 33,817

In the 09nov2022 Market Update, there are numerous directions which have this pattern :-
Close half the position in the $x to $y range. Sell the second half when Dow trades in the 34,050 to 34,200 range.

For example, on page 10, there is this direction for AMD :-
Close half the position in the 96 to 99.00 range. Sell the second half when Dow trades in the 34,050
to 34,200 range.

Following is my interpretation of this direction.

Situation I
During the day, AMD has traded above 96
And Dow has NOT traded above 34,050
Action
Sell half of AMD above 96

Situation II
During the day, AMD has NOT traded above 96
And Dow has traded above 34,050
Action
Sell ALL of AMD at current market price

Is my above interpretation correct ?
Which part of my interpretation is incorrect ?

[kcun333]

Your interpretation is the same as mine. It’s just painful to sell most of my equities at a significant loss when we are finally enjoying a rally. However, I’m paying for the expertise, so it’s prudent to follow the recommendations.

[bpcw]

TI has switched from selling advice based on the Nasdaq for the 31st of Oct update to the Dow for the latest update. This is a huge difference considering that the Dow has between 1-2% to reach it's target and the Nasdaq Composite over 15%.

I think we do need some clarity on this.

Personally my view is that we are due a substantial rally in risk on assets that have been so beaten down and as Mark has stated that we are seeing a rotation from the Dow 30 stocks into smaller and tech stocks, this has started with a rocket under it and although we will inevitably get a pullback I am expecting a more extended rally perhaps into year end with a Santa rally.

I am more inclined to stick with the original Nasdaq Composite targets which are very achievable with a continued pivot from the Fed but we cannot be absolutely certain that they won't kill this current rally so might be prudent to start selling some positions and raising cash as this rally continues.

I'm trying to work more independently whilst respecting and taking on board TI and other advice that has a good longterm track record.

[SOL]

The Nasdaq needs to continue its move. It tacked on over roughly 8% and change in two days. If the pattern changes, it could add another 8% in the same time, it takes the Dow to get to 34K ranges. Now the Dow is showing small signs of extra strength so the target might be raised to 34,500 to 34,700 and possibly higher depending on the strength of these signals.

A global currency and economic war is going on. The Fed and the US care only about maintaining power, and they have lost or are close to losing the advantage on the Economic and Military front. So the Main tool the US has to wreak havoc its enemies is via the USD as 85% of transactions are still conducted in the dollar. There is a massive can of worms. Maybe the word pandora's box is better on the Geopolitical frontier, and any one of them could trigger a sell-off.

We are paying close attention to the situation. On the sentiment front the crowd is not terrified, by now given how much the markets shed, they should have been terrified. It appears many are buying the dip, the big players will not allow that

[SOL]

The Dow High for 11nov2022 is 33,817

In the 09nov2022 Market Update, there are numerous directions which have this pattern :-
Close half the position in the $x to $y range. Sell the second half when Dow trades in the 34,050 to 34,200 range.

For example, on page 10, there is this direction for AMD :-
Close half the position in the 96 to 99.00 range. Sell the second half when Dow trades in the 34,050
to 34,200 range.

Following is my interpretation of this direction.

Situation I
During the day, AMD has traded above 96
And Dow has NOT traded above 34,050
Action
Sell half of AMD above 96

Situation II
During the day, AMD has NOT traded above 96
And Dow has traded above 34,050
Action
Sell ALL of AMD at current market price

Is my above interpretation correct ?
Which part of my interpretation is incorrect ?

Both outlooks are correct.

[outof thebox]

Your interpretation is the same as mine. It’s just painful to sell most of my equities at a significant loss when we are finally enjoying a rally. However, I’m paying for the expertise, so it’s prudent to follow the recommendations.

I think a lot of the plays in the Main portfolio will probably get to their targets. The high risk plays that is a different story. On high risk plays it comes with the territory. No pain no gain and if you want the gain you have to be willing to deal with the pain.

[MarkD]

TI is a roadmap, and I believe Sol would agree. Just like Covid, WMD, etc, one has to parse the data and determine which way the wind is blowing. A lot of noise needs to be filtered to determine what has real impacts on the market and your world view.

As with others on this site I like data. A great place for me to start is on Twitter. Lots of free commentary that one can use to learn TA, FA, MP, and free commentary. Here's an item that I found to be very informative:

https://twitter.com/GordonJohnson19/sta ... 5586848768

and because I don't just trust his comments I went directly to the source to determine the validity and evaluate how to weigh his commentary into my overall investing construct. Here's the data directly from the BLS report released Thursday, last line:

https://imgur.com/FuIWtsm

So I will see if any other significant gems are revealed over the next 4 or 5 weeks and plan accordingly. Including the TI updates which are of significant value re: MP/sentiment.