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Risk Windows for Week of 13 November and Nasty's Internal Injuries


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#1 Douglas

Douglas

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Posted 12 November 2023 - 08:06 AM

According to my risk summation system, the days next week with the highest risk of seeing a turn in or acceleration of the current trend in the DJIA are Monday November 13th and Thursday the 16th.  The Monday the 13th risk window may be part of a larger risk window extending from Friday the 10th of last week, or it may be a risk window in its own right, hard to tell.  With government shut down looming once again next week and inflation figures coming out, there's plenty of risk for turns and acceleration events, so if I had to guess, I suspect that Monday is a separate risk window, but the proof will be in the pudding.

 

Last week the Tuesday risk window was just in the higher part in the middle of a four day long consolidation, so a dud.  The mid-day Thursday through Friday risk window caught the low for the week which was a turn higher.   It may have also caught a high at the dead end of the week depending on the action Monday.  A half and half mixed picture for the system last week.

 

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Even though the Nasdaq composite had a strong 2% up day on Friday, the Nasty is still suffering from some pretty severe internal injuries, see divergence between Comp vs AD line below.  If Powell's pause is kicking off a new bull market, the internals should improve markedly in the coming days, otherwise folks are just looking across the pause to what must follow, more tightening, when Jerome's Arthur Burns redux act falls flat on its face.  I would think that the inflation figures coming out this week should reflect falling energy prices and should be positive, but the cure for low energy prices is low energy prices which stimulates demand and discourages production, so I don't think that this lower energy price inflation aide will be around for too long.

 

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Regards,

Douglas