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October 26, 2024

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In today’s article and video, we’ll discuss the weakness that pervades nearly all index charts.

Over the past few days, many of the indexes have lost their PMO BUY Signals. Nearly all have crossed beneath their signal lines, with the exception of the Nasdaq which is still holding above. The SPY below shows the PMO Crossover SELL Signal, but we can also see participation of stocks above their key moving averages are trending lower. The Silver Cross Index is below its signal line giving us a BEARISH IT Bias.

The Nasdaq is the only index that still has the PMO holding above its signal line. This is due to the current rally, but that could fail based on the shooting star candlestick being formed on Friday morning. This could also fail considering how we are seeing a bleed off from participation indicators. Admittedly, the Silver Cross Index looks bullish right now, but, given lower percentages of stocks above their 20/50-day EMAs, it should turn down shortly.

Let’s look at the mega-cap heavy indexes. All of these show the same PMO Crossover SELL Signals and bleeding participation. Most of the Silver Cross Indexes are in decline, with some beneath the signal line.

Dow:

Nasdaq 100:

S&P 100:

Smaller-caps are being hit the hardest right now, and aren’t seeing upside reversals on Friday as some of the larger-cap indexes. If there is a place to hedge, small- and mid-cap indexes seem the best place given their weakness hasn’t subsided. The Silver Cross Indexes are all in decline and beneath their signal lines, like all of the small- and mid-cap indexes and broader NYSE.

NYSE:

S&P 400:

S&P 600:

Conclusion: While many large-cap indexes are trying to reverse on Friday, internals are very weak, especially given the PMO SELL Signals. While we could still see an upside reversal, momentum suggests it will take some time to reignite. In the meantime, participation needs to start seeing improvement, rather than bleeding off as it is on all of the indexes. Small- and mid-caps are showing significant weakness and could be an opportunity to hedge your buy and hold positions. Below is a five-minute video that details more of the weakness we see in these indexes.


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Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.

DecisionPoint is not a registered investment advisor. Investment and trading decisions are solely your responsibility. DecisionPoint newsletters, blogs or website materials should NOT be interpreted as a recommendation or solicitation to buy or sell any security or to take any specific action.


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Bear Market Rules


The global stock market is a big place, and it extends far beyond the borders of the United States. While the US market is undeniably the largest and often sets the pace for others, it’s revealing to step back and consider the global scene occasionally. This broader perspective can alert investors to significant shifts in stock market rotations worldwide, particularly when the US market has marched off on its own.

Current International Rotations

The Relative Rotation Graph (RRG) for international markets above plots several international stock market indices and benchmarks them against the Dow Jones Global Index ($DJW).

The S&P 500 ($SPX) is positioned very close to the center of the chart, hugging the benchmark. This proximity is expected, given that the US constitutes a hefty portion of the Dow Jones Global Index. However, the S&P 500 is also depicted with a short tail within the weakening quadrant, indicating a renewed up-move within the already rising relative trend.

Asian Markets Are Strong

Shifting our focus from the US, we observe several well-defined and robust relative trends in other markets. The Hang Seng Index ($HSI) in Hong Kong stands out, with its tail moving from the lagging quadrant through improving and into the leading quadrant over the last five weeks. This is the longest tail on the RRG, suggesting a powerful move with a positive RRG heading and the highest RS momentum and ratio readings.

Other markets showing positive trends include China ($SSEC) and Japan ($NIKK), both of which have transitioned from the lagging to the improving quadrant. This shift indicates a relative strength and momentum pickup, hinting at likely outperformance in the coming weeks.

Conversely, the Russian ($MOEX) and Korean ($KOSPI) stock market indices are picking up relative momentum but remain within the lagging quadrant, continuing to underperform.

Where is the Money Flowing?

If we assume that global stock market money migrates to the most promising locations, we will notice outflows from certain markets. For instance, India’s CNX 500 has seen its tail move from the leading quadrant through weakening. It is rapidly approaching the lagging quadrant, signaling a shift to underperformance, particularly against the Asian markets and the S&P 500.

Several markets, including the Australian All Ordinaries Index ($AORD), the DJ Europe index ($E1DOW), the Brazilian Bovespa index ($BVSP), and the Mexican Bolsa Index ($MXX) exhibit negative headings closer to the benchmark. The Brazilian market, in particular, shows a long tail crossing into the lagging quadrant. At the same time, the Mexican Bolsa completed a rotation of lagging-improving-lagging at very low RS-ratio levels. This makes it one of the weaker and more dangerous markets from a relative perspective.

Hang Seng Index vs. Indian CNX 500

The Hang Seng Index and the Indian CNX 500 present contrasting trends.

After a prolonged decline, the $HSI has formed a broad trading range and is currently testing a significant resistance level. A break above this resistance could signal substantial upside potential, with relative strength indicators suggesting a bottoming out and a potential shift in trend.

In contrast, the Nifty 500 index in India has completed a toppish formation, with relative strength trending downward. This points to further underperformance and a negative price trajectory for the Indian market.

Zooming in on the daily chart of the Nifty 500 shows that an H&S top formation has just completed, signalling weakness not only from a relative perspective but also in terms of price.

S&P 500 vs. European Markets

The S&P 500 and European markets are also moving in opposite directions.

The Dow Jones Europe index has encountered resistance and shows a breakdown in relative strength versus the global benchmark, confirming a relative downtrend.

Meanwhile, the S&P 500 has broken to new highs in relative strength, affirming its relative uptrend.

Key Takeaways

From an international perspective, the Hang Seng index and the S&P 500 exhibit positive rotations, while the Nifty 500 and European markets are on a negative trajectory. It’s important to note that the strength of the S&P 500 does not guarantee its continued rise; it simply indicates that, at present, it is outperforming many other markets.

By analyzing relative strengths and rotations using Relative Rotation Graphs, investors can gain insights into where the markets may be heading vis-a-vis each other and make more informed decisions.

#StayAlert and have a great weekend, –Julius


When I was growing up, I loved Choose Your Own Adventure books. I see the world in shades of gray instead of black-and-white, so I was immediately drawn to the seemingly endless scenarios that the main characters could experience as I made different choices for them.

As investors, we often get so caught up in one particular market narrative that we are unable to think “outside the box” and consider other possible outcomes. Successful investors I’ve worked with have been exceptionally good at looking at all the possibilities, challenging their own investment thesis by opening themselves up to other options.

Today, we’ll walk through four potential outcomes for the S&P 500 index over the next six to eight weeks. As I share each of these four future paths, I’ll describe the market conditions that would likely be involved, and I’ll also share my estimated probability for each scenario.  

By the way, we ran through four scenarios for the S&P 500 back in July, and you may be surprised to see which scenario actually played out!

And remember, the point of this exercise is threefold:

  1. Consider all four potential future paths for the index, think about what would cause each scenario to unfold in terms of the macro drivers, and review what signals/patterns/indicators would confirm the scenario.
  2. Decide which scenario you feel is most likely, and why you think that’s the case. Don’t forget to drop a comment and let me know your vote and what you think will cause that scenario to play out.
  3. Think about how each of the four scenarios would impact your current portfolio. How would you manage risk in each case? How and when would you take action to adapt to this new reality?

Let’s start with the most bullish scenario, where the S&P 500 keeps going with a consistent pace and breaks above 6000 by early December.

Option 1: The Super Bullish Scenario

The S&P 500 has experienced a remarkably strong run off the low in early August. This first scenario would mean a continuation of the pace of the current trend, suggesting the SPX would remain above a trendline drawn from the August and September lows. This scenario would include the S&P breaking above 6000 for the first time, and by early December, we’d be wondering how we made it through an entire calendar year with the biggest drawdown sitting at just less than 10%.

Dave’s Vote: 5%

Option 2: The Mildly Bullish Scenario

Let’s say that Trump wins a second term, and investors see that as a fairly pro-business and pro-market outcome. At the same time, however, new economic data and the November Fed meeting leave investors a little skeptical of the Fed’s ability to navigate the soft landing scenario into early 2025.

The second scenario would mean we drift a bit higher, but breadth conditions break down as investors gravitate to Magnificent 7 stocks and other safe havens as the VIX pushes above 20. We don’t see a major correction into early December, but it still feels like one is just around the corner and everyone’s talking about overvaluations and a potential Q1 pullback.

Dave’s vote: 25%

Option 3: The Mildly Bearish Scenario

A Harris victory could certainly weigh on the markets as we progress through Q4, as we realize how much investors had been pricing in a Republican White House. Skepticism of the Fed reaches a fever pitch as we’re no longer talking about a potential soft landing, but rather when the next major correction will play out. Volume and breadth divergences that have been growing in October continue to play out, and a 2018-style Q4 drop becomes our reality in 2024.

Dave’s vote: 50%

Option 4: The Very Bearish Scenario

You always need a “doomsday” scenario, where things get bad and stay bad. What if the S&P 500 starts selling off as a frustrating earnings season leads into a contentious election and a November Fed meeting raises more questions than answers? Paul Tudor Jones famously remarked, “Nothing good happens below the 200-day moving average.” And in this scenario, that’s exactly what we’re facing in December as we wonder where how and why the normal Q4 rally is nowhere to be seen.

Dave’s vote: 20%

What probabilities would you assign to each of these four scenarios? Check out the video below, and then drop a comment with which scenario you select and why!

RR#6,

Dave

P.S. Ready to upgrade your investment process? Check out my free behavioral investing course!


David Keller, CMT

President and Chief Strategist

Sierra Alpha Research LLC


Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

The author does not have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author and do not in any way represent the views or opinions of any other person or entity.

Although earnings season is in full swing, trading volume has been relatively light this week. Perhaps investors are waiting for the stock market to show some direction. It could happen next week, one that’s jampacked with earnings and market-moving economic data, or the following week after the US election and Fed meeting.

A Bird’s-Eye View Of the Stock Market

Tesla’s upbeat Q3 earnings on Thursday juiced up the Nasdaq Composite ($COMPQ), the laggard of the three US broad market indexes. This price action continued into Friday, with the Nasdaq reaching a record high. Sadly, it couldn’t hold on to it, but still managed to close higher by 0.56%. The S&P 500 ($SPX) and Dow Jones ($INDU) snapped their six-week winning streak, but the Nasdaq retained its seven-week winning streak.

Technology was the top-performing sector on Friday, followed by Consumer Discretionary and Communication Services (see the StockCharts MarketCarpets screenshot below). It looked like the stock market had regained its mojo for a little while, but the week ended without giving investors much of a sense of direction. Next week could be a different story, since most mega-cap Tech stocks will report quarterly earnings.

FIGURE 1. STOCKCHARTS MARKETCARPET, OCTOBER 25, 2024. Technology regained its top spot in sector performance on Friday. Next week is a big earnings week for technology companies. Will they impress or disappoint?Image source: StockCharts.com. For educational purposes.

The US dollar and precious metals traded higher this week. The 10-year US Treasury Yield Index ($TNX) bounced off its 200-day simple moving average and closed at 4.23% (see daily chart of $TNX below).

FIGURE 2. DAILY CHART OF 10-YEAR US TREASURY YIELD INDEX ($TNX). $TNX bounced off the 200-day moving average and moved higher. The rise in yields suggests investors are uncertain about near-term market direction.Chart source: StockCharts.com. For educational purposes.

Seeing gold, the US dollar, and Treasury yields rally simultaneously is unusual and is an indication of investor uncertainty. So far, the three seem to be holding on to their uptrends. Whenever there’s a slight pullback, they recover quickly and move higher, suggesting that these assets have momentum behind them. The chart below displays the US dollar ($USD), SPDR Gold Shares ETF (GLD), and $TNX.

FIGURE 3. THE US DOLLAR, GOLD, AND YIELDS. Gold has been trending higher in 2024, whereas the US dollar and yields still display a series of lower highs and lower lows.Chart source: StockChartsACP. for educational purposes.

Even though the US dollar and 10-year yields are rising, they haven’t yet established an uptrend. Gold, on the other hand, has been on an upward trend in 2024. 

If you hold a long position in gold, ride the momentum, but know that it could dry up. It’s a good idea to start thinking about managing your position. Gold prices are looking extended, and with Treasury yields and the US dollar as high as they are, I would watch them closely for a reversal, as it could cause gold prices to fall.

Looking Forward

Next week, we will have some key economic data that could influence the Fed’s interest rate decision at their November 7 meeting. According to the CME FedWatch Tool, a 25 basis point cut probability is 95.5%. This could change as economic data comes in next week. If the data supports a strengthening US economy, investors may think the Fed will not cut rates at the next meeting. This could give rise to fear, which in turn spikes volatility.

The Cboe Volatility Index ($VIX) closed higher, but is still relatively low at 20.33. Keep an eye on it, because even a little negative news could send it higher.

Next week is chock full of market-moving events. Earnings from mega-cap Tech and other large-cap companies, plus key economic data (see the End-of-Week Wrap-Up section below), are among them. If trading volatility remains anemic next week, then you know that investors are having the election jitters. You may have to wait another week for trading volume to pick up.

In the meantime, it’s best to exercise patience and focus more on managing your portfolio holdings. If you are going to add positions, keep your sizes small to minimize your risks. The stock market is vulnerable and could make large moves in either direction.

End-of-Week Wrap-Up

  • S&P 500 closed down 0.96% for the week, at 5808.12, Dow Jones Industrial Average down 2.68% for the week at 42,114.40; Nasdaq Composite closed up 0.16% for the week at 18,690.01
  • $VIX up 12.76% for the week, closing at 20.33
  • Best performing sector for the week: Consumer Discretionary
  • Worst performing sector for the week: Materials
  • Top 5 Large Cap SCTR stocks: Applovin Corp. (APP); Carvana (CVNA); Insmed Inc. (INSM); Ubiquiti, Inc. (UI); MicroStrategy, Inc. (MSTR)

On the Radar Next Week

  • September JOLTS Report
  • Q3 GDP Growth Rate QoQ Adv
  • September PCE Price Index
  • October Jobs Report
  • October ISM Manufacturing PMI
  • Earnings from Alphabet (GOOGL), AMD, Microsoft (MSFT), Meta Platforms (META), Amazon, Inc. (AMZN), Apple Inc. (AAPL), McDonald’s Corp (MCD), Pfizer, Inc. (PFE), Chipotle Mexican Grill (CMG), D.R. Horton, Inc. (DHI), Microstrategy (MSTR), Carvana (CVNA), and many more.


Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

In this StockCharts TV video, Mary Ellen shares how the markets trade right before the elections, and also reviews the move in Tesla (TSLA) after reporting earnings. She shares examples of what to watch for if your stock is due to report earnings – and what to do if it gaps down.

This video originally premiered October 25, 2024. You can watch it on our dedicated page for Mary Ellen on StockCharts TV.

New videos from Mary Ellen premiere weekly on Fridays. You can view all previously recorded episodes at this link.

If you’re looking for stocks to invest in, be sure to check out the MEM Edge Report! This report gives you detailed information on the top sectors, industries and stocks so you can make informed investment decisions.

Two tickets for passage on what could be the first Chinese rocket ship to take tourists to space were sold Thursday, according to a livestream held by the company, as the country’s commercial space firms aim to join a small but expanding global space tourism industry.

The tickets – priced at 1,000,000 yuan (around $140,000) for a roughly 12-minute trip to the edge of space on a spacecraft set to be launched by Deep Blue Aerospace in 2027 – sold out “immediately,” according to state-linked Global Times.

Some 3 million people tuned in to the broadcast on Chinese shopping platform Taobao, which was the first time a Chinese firm has put tickets for space tourism up for public sale.

The identities of the ticket buyers were not made available.

Deep Blue Aerospace is among a vanguard of Chinese commercial space firms developing rockets to power Beijing’s ambitious plans for outer space, which include building out satellite constellations to rival American firm SpaceX’s Starlink – as China vies to become a dominant space power alongside the United States.

Work remains to be done for the company to meet its announced timeline.

Deep Blue Aerospace’s reusable Nebula-1 rocket – slated to carry the company’s CEO and five others to space for the mission in three years – is still under development.

Last month, the rocket failed to complete a high-altitude vertical recovery test flight, the company said, with footage it released showing the vehicle crashing in its final phase. A new test is slated for next month, while the company has said it will ramp up testing in 2025 and 2026 to ensure the “safety and reliability of suborbital manned travel.”

Companies working in rocket development across the world have frequently faced setbacks and delayed timelines. But on Thursday, Deep Blue Aerospace’s CEO and founder Huo Liang appeared confident that the rocket would be ready to power the 2027 flight, as he discussed the plans during the ticket sale livestream.

Huo explained how passengers can unbuckle their seat belts in space and “move around like fish” in the weightless environment, where they feel “exactly the same lying down as standing up.”

“In this experience, you can not only see how the earth is round, but also the vast universe and the blue planet where humans live,” said Huo, who founded the private company in 2016.

Deep Blue Aerospace aims to join a small group of companies globally offering what’s considered the next frontier of adventure tourism – typically expensive trips where passengers willing to spend hundreds of thousands of dollars can cross the Kármán line some 100 kilometers (62 miles) above Earth’s surface to enter space.

Amazon founder Jeff Bezos’ Blue Origin completed its first commercial human space flight with four private citizens in 2021, while Virgin Galactic, the space tourism venture founded by British billionaire Richard Branson, began offering regular trips to the edge of space last year.

Companies are also looking to expand their offerings to “space tourists.”

Last month, a four-person crew of civilians on board SpaceX’s Polaris Dawn mission made history as the first group of non-government astronauts to conduct a spacewalk.

Deep Blue Aerospace is not the only Chinese firm with a plan to send humans to space. This May, CAS Space said its “space tourism vehicle” will take its first crewed flight in 2028, with tickets priced expected to cost between 2 to 3 million yuan (around $281,000 to $421,000), according to state media.

The company is among a number of Chinese state-backed and private firms that are vying to develop reusable rocket technology, which could help make frequent missions to space more affordable and sustainable.

Access to reusable rockets could be a key development for China as it seeks to expand its launch capacity to build out satellite constellations and power its ambitious civil space program – as well as build out a space tourism industry.

Commentators on the livestream appeared to express some tongue-in-cheek skepticism about sending people to space, with some asking, “(If we go), can we get back?”

And those interested in the remaining seats will get another chance, the company’s page on Taobao said, noting that ticket sales will reopen on November 23.

This post appeared first on cnn.com

Russian soldiers have been heard raising concerns about how North Korean soldiers will be commanded and provided with ammunition and military kit, leaked intercepts obtained by the Defense Intelligence of Ukraine and released on Friday show.

The Russian soldiers talk disdainfully about the incoming North Korean soldiers, codenamed the “K Battalion,” at one point referring to them as “the f**king Chinese.”

In the same extract, a serviceman describes another who has been tasked to “meet people.”

“And he’s like standing there with his eyes out, like… f**k,” the soldier says. “He came here and says what the f**k to do with them.”

The audio was intercepted from encrypted Russian transmission channels on the night of October 23, according to Ukraine’s Defense Intelligence.

Ukraine’s analysis of the intercepts revealed that North Korean troop movements were planned for the morning of October 24, in the area of Postoyalye Dvory field camp in Russia’s Kursk region, where Ukraine launched a surprise incursion earlier this year.

The intercepts also reveal plans to have one interpreter and three senior officers for every 30 North Korean men, which the Russian soldiers are heard in the audio condemning.

“The only thing I don’t understand is that there [should be] three senior officers for 30 people. Where do we get them? We’ll have to pull them out,” one Russian serviceman says.

I’m f***ing telling you, there are 77 battalion commanders coming in tomorrow, there are commanders, deputy commanders and so on,” a serviceman says in another extract.

The interepted audio follows a Thursday announcement from Ukraine’s military intelligence service that a group of North Korean soldiers have been spotted in Russia’s Kursk region, an area that borders Ukraine and has seen ongoing military operations.

In a post on its official Telegram account, the Defense Intelligence of Ukraine said some North Korean troops, who had received training in Russia’s far east, have made their way to the western Russian region, where Ukraine has maintained a foothold since launching an incursion in August.

Ukrainian President Volodymyr Zelensky said Friday that he received a report on the deployment of North Korean military personnel from Ukraine’s commander-in-chief.

“According to intelligence, on October 27-28, Russia will deploy its first North Korean troops in combat zones. This is a clear step in Russia’s escalation that matters, unlike all the disinformation circulating in Kazan these days,” Zelensky said, criticizing the BRICS summit staged by Russian President Vladimir Putin this week in the southwestern Russian city of Kazan.

The Kremlin had initially dismissed allegations of North Korean troop deployments, but on Thursday at the BRICS summit, Putin did not deny that Pyongyang had sent soldiers to the country.

“The actual involvement of North Korea in combat should be met not with a blind eye and confused comments, but with tangible pressure on both Moscow and Pyongyang to comply with the UN Charter and to punish escalation,” Zelensky added.

This post appeared first on cnn.com

Israeli forces entered the compound of northern Gaza’s Kamal Adwan Hospital and opened fire after days of laying siege to the facility, health authorities in the enclave said.

Dr Hussam Abu Safiya, the hospital director, said in a video that Israeli tanks and bulldozers entered the hospital compound late Thursday and began firing at parts of the complex, adding that “all departments of the hospital are under direct shelling.”

“Instead of receiving aid, we are receiving tanks,” he said.

Kamal Adwan is one of three minimally operational hospitals in northern Gaza, and the closest to Israeli military activity in Beit Lahiya and the Jabalya Refugee Camp. Despite its limited capacity, it has been receiving most of the injured from the surrounding fighting.

World Health Organization (WHO) chief Tedros Adhanom Ghebreyesus said on Friday that since the raid on Kamal Adwan hospital, WHO has “lost touch with the personnel there.”

“This development is deeply disturbing given the number of patients being served and people sheltering there,” Ghebreyesus said on X. Prior to Friday’s raid, he said, WHO and its partners managed to reach Kamal Adwan “amid hostilities in the vicinity, and transferred 23 patients and 26 caregivers to Al-Shifa Hospital.”

The Israeli military said in a statement Friday that its forces are operating in the area of the Kamal Adwan Hospital “based on intelligence information regarding the presence of terrorists and terrorist infrastructure,” adding that in the weeks preceding the operation, “the IDF facilitated the evacuation of patients from the area while maintaining emergency services.”

COGAT, the Israeli agency that manages the flow of aid into the strip, said on Friday that with the help of UNICEF and WHO, several patients and their escorts were evacuated from the facility. The hospital was also given fuel, blood units and medical equipment.

But WHO’s Ghebreyesus stated on X that the hospital is housing about 200 patients, along with hundreds more seeking shelter there.

‘Shocked by the entry of bulldozers and tanks’

Shamiya said that the military had entered the hospital yard for a second time on Friday morning and had begun separating men from women.

“After that, it became impossible to communicate with anyone.”

In his video message, Safiya said he was “shocked by the entry of bulldozers and tanks into the hospital compound,” adding that tanks began firing at the upper floors, shattering windows and “creating an atmosphere of panic, terror, and fear.”

“Everyone in the hospital gathered in the stairwell; it was a very distressing scene,” he said.

One video showed Abu Safiya speaking from within the Intensive Care Unit, where patients and medical staff were huddled. He said that some severely injured people were dying. Abu Safiya said that a number of properties around the hospital had been set on fire.

Later Thursday night, a convoy of supplies from the World Health Organization reached the hospital, he said. Video showed a fuel tanker and other vehicles close to the facility.

Abu Safiya said the convoy delivered enough fuel for five days, as well as 200 units of blood and a few other supplies, but no food or water.

He said he had been in touch with Israeli officers.

“I explained the situation of the patients and the injured people in the hospital, emphasizing that their condition was extremely critical and that evacuation was necessary.”

“We have no medical assistance that can reach them, and I do not have the means to help them even if they were able to reach us. We have nothing to offer them.”

It has been 21 days since Israel ramped up its military operation in northern Gaza. Authorities in Gaza say the military has stopped aid from reaching parts of the area and displaced many of its residents. Israel says it is preventing Hamas from regrouping.

This post appeared first on cnn.com

Indian airlines have received more than 100 hoax bomb threats in a span of a few days, forcing planes to delay, reroute and make emergency landings – throwing the country’s aviation industry into costly disarray right before one of the biggest festivals of the year.

The epidemic of hoax threats has targeted both international and domestic flights, causing chaos on long-haul trips headed for places such as New York. Although one arrest was made last week, with authorities vowing to punish perpetrators potentially with jail time, the spate of threats has continued, often sent through emails and social media posts.

One airline alone, the budget company IndiGo Airlines, received nearly 30 bomb threats in four days since Sunday, according to statements by the carrier. Other Indian airlines, including Akasa Airlines, SpiceJet and Alliance Air, have also been impacted.

The highest-profile hoaxes targeted Air India last week; one flight en route to Chicago had to make an emergency landing in Canada’s northernmost city in the Arctic, while another flight headed to Singapore had to be escorted by Singaporean fighter jets, with bomb disposal squads waiting at the airport.

Since the flurry of hoaxes first started around mid-October, “we have [had] 150 to 160” threats, said Sanjay Lazar, an aviation expert and former Air India crew member.

Bomb threat hoaxes aren’t a new phenomenon in India – several airports received similar threats in April and June this year. But the sheer frequency and level of disruption in the past two weeks has been unprecedented, sending investigators scrambling to determine who is behind the threats.

Police in Mumbai said last Tuesday that they had arrested a minor suspected of posting threats against IndiGo Airlines on X, formerly Twitter. Police are also questioning a second minor, and “there are chances he played a role in this,” a spokesperson said.

But no further arrests have been made, and more threats have come in despite authorities stepping up security measures, threatening legal punishments, appeasing airlines and reassuring panicked passengers.

“Even though there are hoax threats, we can’t take the situation non-seriously,” said Civil Aviation Minister Kinjarapu Ram Mohan Naidu in a news conference on Monday. “The safety and security of people and convenient travel … is always our utmost priority.”

With less than a week until Diwali, the festival of lights – which sparks a travel boom each year as millions of Indians fly domestically and diaspora members come home from abroad – experts worry that the ongoing hoaxes could wreak travel havoc.

Millions of dollars lost

Each bomb threat causes a ripple effect of disruptions, costing both airlines and passengers huge amounts of time and money, said Lazar.

This is partly because of strict protocols set out by outdated laws, he said. Under a 1982 law last amended in 2010, “every threat has to be taken into consideration,” he said – even though the law doesn’t mention modern factors such as social media that complicate the task.

There’s also the “lengthy process” of bureaucracy and coordinating with various committees, Lazar said.

Authorities follow these steps “word for word” with every single threat, said aviation minister Naidu. “Whenever there is a bomb threat case happening, if it is through a call or if it is through social media or if it is through some other means, we have a strict protocol that we follow,” he added.

But the threats – and their aftermath – have caused massive headaches for airlines. Not only do they have to disrupt passenger plans by rerouting or making unexpected landings, but they must also cope with the hours-long process of isolating the plane, checking the aircraft from top to bottom, screening every piece of luggage, and allowing a “cooling period” for the plane afterward, expert Lazar said.

“It’s not very simple … there’s a lot of cost and time involved.”

While the airlines have not disclosed the extent of their losses, Lazar estimated each affected carrier has lost hundreds of thousands of dollars – and the cost for the industry as a whole is likely in the millions.

The losses rack up through landing charges, fuel dumping, bomb disposal squad fees, and providing services for passengers including accommodation, alternate flights and refunds.

These disruptions would be a nightmare at any time – but particularly in the run-up to Diwali, which begins on October 31. Also called Deepvali, the festival of lights is celebrated by more than a billion Hindus, Sikhs, Jains and Buddhists around the world, with families gathering to feast on food, exchange gifts and make religious offerings.

That also makes it the second-biggest travel period of the year in India, after the Christmas to New Year period, according to Lazar.

By September, flight bookings for the Diwali period had seen an 85% increase on last year – surpassing pre-pandemic levels, according to World on Holiday, an Indian organization that analyzes travel and hospitality data.

“Passengers are going to be scared but those who need to fly will fly … so what’s going to happen if this havoc is created around Diwali?” Lazar said.

He added that while he was worried about the recent string of bomb threats, he was “even more worried about what’s going to happen around Diwali and Christmas.”

Government efforts

Authorities still don’t know who is making these threats and why – though Naidu, the aviation minister, blamed the recent hoaxes on “minors and pranksters” in a post on X.

On Monday, he also admitted it’s hard to even say whether the threats are coming from inside India due to the potential use of VPNs to mask users’ locations.

Authorities are now investigating and coordinating with different government ministries, the minister added. Meanwhile, airports have increased the number of security checks and the use of CCTV cameras to monitor their area “more thoroughly.”

The civil aviation ministry is also trying to introduce legal changes as a deterrent. If passed, the amendments would put hoax perpetrators on a no-fly list and criminalize hoaxes as a “cognizable offence,” which allows police to arrest suspects without a warrant, Naidu said.

Lazar argues the proposed measures are far from enough – saying it was “stupid” to dismiss the hoaxes as “the work of a prankster” given the severity of the disruption and potential danger of a real threat.

Authorities should use the country’s technological heft to track down online users, he said, including working with international agencies and social media platforms.

Until then, “I don’t believe we’ve seen the end of this,” he said.

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A man in Northern Ireland has been sentenced to life for several crimes, including manslaughter, after using social media sites to blackmail and sexually abuse at least 70 minors in several countries.

Alexander McCartney, 26, was sentenced by a judge at Belfast Crown Court on Friday for child sexual offenses, blackmail and the manslaughter of a 12-year-old girl who took her own life in the United States in 2018 after being “catfished,” according to a statement from Northern Ireland’s Public Prosecution Service (PPS).

Catfishing – often used on social media – is when a person uses false information and images to create a fake identity online with the intention of tricking, harassing, or scamming another person.

According to authorities, McCartney pretended to be a young girl, befriended victims on social media and manipulated them into sending him nude images of themselves.

The victims were then threatened “into sending him indecent images and videos of themselves, forcing them to engage in depraved and sometimes dangerous sexual acts,” the statement said.

McCartney – who targeted around 3,500 girls from Northern Ireland, Ireland, Great Britain, the US and New Zealand – sought to “exploit that vulnerability in the most shocking ways,” acting head of the PPS Serious Crime Unit Catherine Kierans said.

“All McCartney’s victims were young, innocent children” as young as 10 years old and “struggling with identity and body image issues and had reached out for help on social media,” Kierans said.

In total, McCartney pleaded guilty to 185 charges involving 70 victims. McCartney must serve a minimum of 20 years in prison before he can be considered for parole.

“Tragically, one of his young victims, who was just 12, had taken her own life during an online chat in which he was threatening her and forcing her to engage in sexual activity,” Kierans noted. She said that the girl, an American, and McCartney never met in person.

“If we discover this activity, or it is reported to us, we remove it, lock the violating account and report it to the authorities,” the social media site said. It added that the app has “extra protections for teens to make it difficult for them to be contacted by strangers.”

The PPS is working to identify more of McCartney’s victims, according to its statement.

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