Lean Methodology in Health Care Quality Improvement

Lean production (Lean) is a type of quality improvement methodology which has been implemented in many industries. Its principles and practices also have been applied to health care organizations with success. This has been accomplished with refinement for the nuances of health care. Lean is a process management philosophy which has its roots in manufacturing and technology. It was developed as part of the Toyota Production System for the process assembly of automobiles (Toyota Motor Corporation, 2009). The Toyota System is comprehensive and spans a large number of methods and practices. It was initially influenced by the work of W. Edwards Deming and Henry Ford and was also inspired by innovation in the American grocery store industry of the 1950s (Keller, 2006). This is reflected in the Just-in-Time philosophy of productivity improvement, which emphasizes producing quality products efficiently through the complete elimination of waste, inconsistencies, and unreasonable requirements (Toyota Motor Corporation, 2009). Though the Lean methodology was initially developed as part of an overall system focusing on the production of automobiles, its principles also have been adapted for health care. As certain case studies indicate, Lean thinking and tools have been successfully applied to specific health care settings. The scope and value of Lean production within this field will be explored in this paper.Significance:ValueA significant component of Lean is the concept of value: the theoretical concept of value, the measurement of value, and the tangible processes behind delivering value. Lean is unique in that it accounts for the reduction of waste in order to achieve both real and potential value. Recovering this value can present itself in the form of saved costs or other tangibles. Lean thinking dictates that the expenditure of resources for any purpose other than delivering value to the customer is considered to be wasteful. The reduced expenditure of time, money, and resources is thought to bring additional bottom-line benefit to the customer. The customer-centric focus of Lean thinking is especially relevant to health care. Broader levels of patient/customer satisfaction are constantly being sought. This mode of thinking has been brought on by increased competition among organizations and the need to differentiate services. It is recognized that providing complete customer satisfaction can be vastly beneficial to health care organizations. Customer satisfaction can be an equally important measure of an organization’s performance as the delivery of quality health outcomes. This is a factor which is exemplified in Noriaki Kano’s model. Lean thinking dictates that processes and methods must be efficiently optimized with the needs of customers in mind in order for organizations to be fully effective.Problem Addressed: WasteLean focuses on the maximization of process velocity through the reduction of waste. It provides tools for analyzing process flow and delay times at each activity in a process. The focal point is the separation of “value-added” from “non-value-added” work. This is complemented by tools which aide in the identification and elimination of root causes of non-valued activities. The primary problem addressed by Lean is waste, which can affect value in a number of ways. It may result in lower quality products, higher costs, less favorable customer experiences, excessive time or effort expended to complete goals, or fewer resources available for innovation which could provide potential value at a future date. Waste can be found in people, processes, tangibles, and other areas. Eliminating waste through the lens of Lean production can help to achieve the goals of health care organizations. There are eight generally identifiable centers of waste: overproduction, waiting (time on hand), unnecessary transport or conveyance, over-processing or incorrect processing, excess inventory, unnecessary human movement, defects, and unused employee creativity (United States Army, 2009). There are variations on these categories of waste depending on the setting or industry. For the purpose of health care Caldwell (2005) slightly refines these measures into seven categories of waste. These consist of “in-quality/out-of-quality staffing or overcapacity, overcorrection, over processing, excess inventory, waiting, motion of patients or staff, and material and information movement (Caldwell, 2005, p. 46).” Regardless of the differences in terminologies used, there are common centers of waste in health care which can be targeted for elimination. These can be identified through Lean processes which focus on root cause analysis.Process: Root Cause AnalysisA crucial process in Lean is the identification of waste through root cause analysis. Root cause analysis in Lean involves a method called 5-Whys (Toyota Manufacturing Kentucky, 2003). This method rapidly identifies root causes and aides in determining the relationship between multiple root causes. It can be learned quickly and does not require statistical analysis. This method is especially effective for an implementation team in the initial stages of problem exploration. The application of this strategy involves asking a series of why-related questions to drill down into a problem area. Asking progressive questions about a perceived difficulty forces team members to think critically about the actual sources of waste and inefficiency. It is suggested that at least five questions (5-Whys) are posed to arrive at the root cause, though a root cause may be discovered in more or less inquires.The following is an example of a 5-Whys exercise used in a hypothetical hospital setting:(Q1) Why are patients being diverted to neighboring hospitals?(A1) Because wait times for our hospital are exceeding industry norms.(Q2) Why are our wait times exceeding industry norms?(A2) Because patient volume is exceeding capacity.(Q3) Why is patient volume exceeding capacity?(A3) Because not enough hospital beds are available.(Q4) Why are not enough hospital beds available?(A4) Because hospital patients are not being discharged efficiently.(Q5) Why are hospital patients not being discharged efficiently?(A5) Because ER staff is not following best practices for proper discharge.In this example, waste in the throughput process comes from incorrect processing. Once hospital management determines the root cause they can implement further training, ensure compliance with existing standards, or eliminate other barriers. In this case the hospital might consider implementing a training program to ensure that ER staff is following best practices for patient discharge. The hospital might also conduct additional 5-Whys analyses to uncover other problem areas. Once root causes of waste are uncovered, the elimination of waste or other related action plans can be executed.Sources of wasteSources of waste vary greatly by industry. The majority of waste encountered by health care organizations occurs in flow and throughput. As a result, Lean implementations in this field are primarily focused on the elimination of waste in staffing and staff/patient processes. Unlike manufacturing industries most health care organizations have very little inventory. Thus, some of the Lean concepts related to inventory control are less applicable to health care. Health care organizations typically spend a larger percentage of operating expenses on overhead and labor costs. This can account for 50 percent of the operating costs while inventory is in the range of 2 percent (Caldwell, 2005). Understanding waste in throughput entails a comprehension of the relationships between process variables and costs. Costs are not causes of waste but are indicators of interrelationships between processes. While the ultimate goal of most Lean implementations is to recover costs as tangible benefits, eliminating costs without fully understanding processes is problematic. Looking at the types of cost recovery is essential to determining an action plan.Solution: Cost RecoveryThe ultimate goal of most Lean implementations is to attain a tangible benefit, often in the form of a cost recovery. However, not all process improvement opportunities will result in immediate returns. The actual realization of a benefit depends on the nature of the improvement as well as the additional steps that management takes to achieve it. Caldwell (2005) cites three types of cost recovery through the elimination of waste: Type 1, Type 2, and Type 3. In a Type 1 situation the process throughput improvement will yield a direct cost recovery. For example, a process improvement that reduces length of patient stay would recover costs in the form of reduced resources expended. In a Type 2 situation, the process improvement saves time but does not result in cost recovery without additional hours worked per unit of service. A provider may spend less time per patient because of reduced length of stay but scheduling will need to be adjusted in order to capitalize on the benefit to workflow. Lastly, Type 3 yields savings in the form of immediate optimization of capacity. In this situation a process improvement in an emergency room, for example, may allow a provider to see more patients in the same staffed time without additional action taken by management. This is similar to a Type 2 recovery but with no changes to scheduling. This can occur if the provider is willing to see more patients per unit of time and sufficient patient volume exists to achieve capacity. Maximum velocity is achieved without additional action needed to be carried out by management. These examples show that throughput improvement may not achieve an immediate benefit without other factors. It also brings to light the fact that throughput improvement may yield different benefits such as recovered costs, time saved, or increased revenues. Regardless of the actual benefit achieved and the way that it is realized, the ultimate outcome must increase bottom-line value and satisfaction to customers in some way.Examples of Lean implementation in HealthcareThe study of actual Lean implementations in health care is essential to understanding their application. One example of a successful implementation is outlined by Fairbanks (2007) at a medical center in Vermont. This implementation dramatically improved overall throughput processes within the organization. An implementation team was assembled and delved into all steps of the processes they were analyzing in order to determine the sources of waste. They utilized various Lean steps and methodologies to conduct root-cause analyses and prioritize process improvements. The team measured time involved, identified activities, and made rapid improvements through the elimination of non value-added activities. A large part of their improvements involved the elimination of redundancy. The topic of redundancy shows the importance of analyzing all processes, even those which are perceived to contribute to customer value. Even though a particular function may provide value in an organization it is possible that a redundant function may exist which can be eliminated. In another case example Lean methodology was used to streamline the physical space and inventory areas of a Denver-area hospital (Gabow, Albert, Kaufman, Wilson, & Eisert, 2008). The implementation team utilized the 5-S approach to organize physical work spaces within the hospital. 5-S is a Lean improvement which incorporates visualization management to organize objects and supplies. The five Ss stand for sort, set in order, shine, standardize, and sustain. These steps involve tasks ranging from simple clean-up and organization to the implementation of detailed visual controls. In a 5-S environment there is “a place for everything and everything in its place, when you need it (Lean Innovations, 2003).” The Denver hospital used this approach in a series of projects focusing on individual offices, nursing stations, entire laboratories, and financial services departments. These spaces were reorganized to achieve optimal work flow and good space management. The successful outcomes included reclaimed physical work space, improved lab turnaround time, reduced time in locating equipment, and better processes which could improve patient care (Gabow et al, 2008). The 5-s method is an excellent first step in implementing Lean programs in a health care organization. Improvement of physical work space can positively affect mindset and mental perception of work. Another case example of a successful 5-S implementation involves a rural health clinic in Georgia. Lean techniques were used in this organization to resolve problems with bottlenecks, turnaround times, customer satisfaction, and overworked nurses (Cross, 2009). 5-S is one of many Lean tools which can provide immediate benefit.ConclusionLean is a multifaceted approach to quality improvement which has tangible benefits to health care organizations. There are aspects which focus on reducing non value-added work and waste to achieve value in various ways. Successfully implementing Lean in health care depends on the setting involved and the motivation of management and teams. Health care encompasses a wide range of organizations and each has unique characteristics which must be considered in light of Lean processes. Important considerations in implementing lean in any environment can be reduced to a few key points: Understanding the concept of value Understanding waste and its sources Learning how to determine and analyze root causes Prioritizing multiple root causes Devising methods to eliminate waste Determining ways to recover costs or achieve benefits Analyzing effectiveness and repeating steps if necessary In addition, it is important to note that eliminating waste through a Lean process may not immediately result in tangible benefit. Management must thoroughly analyze action plans and make adjustments based on actual outcomes. Additional steps may need to be taken following initial process improvements. This is especially relevant in health care where process throughput improvement and staffing are areas which are commonly targeted. These areas may involve more challenges when trying to extract benefit. Freeing time for providers cannot always be capitalized upon without other capacity and throughput improvements. Scheduling or work flow functions may need to be overhauled in order for providers to increase overall process velocity and maximize value per unit for time. It is also crucial to realize that humans are not machines. Theoretical methods of quality improvement in Lean may not always be feasible to achieve at maximum levels. The Lean methodology developed by Toyota is very cognizant of respect for people. It is reflective of a collective culture and a holistic concept rather than a series of parts or steps. This is a fact which cannot be overlooked by management and teams when planning an implementation. People perform processes with normal human variation and improvements must be sensitive, appropriate, and sustainable.

How Did Health Care Costs Get So High?

First, let’s get a little historical perspective on American health care. To do that, let’s turn to the American civil war era. In that war, dated tactics and the carnage inflicted by modern weapons of the era combined to cause terrible results. Most of the deaths on both sides of that war were not the result of actual combat but to what happened after a battlefield wound was inflicted. To begin with, evacuation of the wounded moved at a snail’s pace in most instances causing severe delays in treatment of the wounded. Secondly, most wounds were subjected to wound related surgeries and amputations and this often resulted in massive infection. So you might survive a battle wound only to die at the hands of medical care providers whose good intentioned interventions were often quite lethal. High death tolls can also be ascribed to everyday sicknesses and diseases in a time when no antibiotics existed. In total something like 600,000 deaths occurred from all causes, over 2% of the U.S. population at the time!Let’s skip to the first half of the 20th century for some additional perspective and to bring us up to more modern times. After the civil war there were steady improvements in American medicine in both the understanding and treatment of certain diseases, new surgical techniques and in physician education and training. But for the most part the best that doctors could offer their patients was a “wait and see” approach. Medicine could handle bone fractures and perform risky surgeries and the like (now increasingly practiced in sterile surgical environments) but medicines were not yet available to handle serious illnesses. The majority of deaths remained the result of untreatable conditions such as tuberculosis, pneumonia, scarlet fever and measles and/or related complications. Doctors were increasingly aware of heart and vascular conditions, and cancer but they had almost nothing with which to treat these conditions.This very basic understanding of American medical history helps us to understand that until quite recently (around the 1950′s) we had virtually no technologies with which to treat serious or even minor ailments. Nothing to treat you with means that visits to the doctor if at all were relegated to emergencies so in that scenario costs were obviously minuscule. A second factor that has become a key driver of today’s health care costs is that medical treatments that were provided were paid for out-of-pocket. There was no health insurance and certainly not health insurance paid by someone else like an employer. Costs were the responsibility of the individual and perhaps a few charities that among other things supported charity hospitals for the poor and destitute.What does health care insurance have to do with health care costs? Its impact on health care costs is enormous. When health insurance for individuals and families emerged as a means for corporations to escape wage freezes and to attract and retain employees after World War II, almost overnight there was a great pool of money available for health care. Money, as a result of the availability of billions of dollars from health insurance pools, encouraged an innovative America to increase medical research efforts. As more and more Americans became insured not only through private, employer sponsored health insurance but through increased government funding that created Medicare, Medicaid and expanded veteran health care benefits, finding a cure for almost anything has become very lucrative. This is also the primary reason for the vast array of treatments we have available today. I do not wish to convey that this is a bad thing. Think of the tens of millions of lives that have been saved, extended and made more productive as a result. But with a funding source grown to its current magnitude (hundreds of billions of dollars annually) upward pressure on health care costs are inevitable. Doctor’s offer and most of us demand and get access to the latest available health care technology, pharmaceuticals and surgical interventions. So there is more health care to spend our money on and until very recently most of us were insured and the costs were largely covered by a third-party (government, employers). This is the “perfect storm” for higher and higher health care costs and by and large, the storm is intensifying.At this point, let’s turn to a key question. Is the current trajectory of U.S. health care spending sustainable? Can America maintain its world competitiveness when 16%, heading for 20% of our gross national product is being spent on health care? What are the other industrialized countries spending on health care and is it even close to these numbers? Add politics and an election year and the whole issue gets badly muddled and misrepresented.I believe that we need a revolutionary change in the way we think about health care, its availability, its costs and who pays for it. And if you think I am about to say we should arbitrarily and drastically reduce spending on health care you would be wrong. Here it is fellow citizens – health care spending needs to be preserved and protected for those who need it. And to free up these dollars those of us who don’t need it or can delay it or avoid it need to act. First, we need to convince our politicians that this country needs sustained public education with regard to the value of preventive health strategies. This should be a top priority and it has worked to reduce the number of U.S. smokers for example. If prevention were to take hold, it is reasonable to assume that those needing health care for the myriad of life style engendered chronic diseases would decrease dramatically. Millions of Americans are experiencing these diseases far earlier than in decades past and much of this is due to poor life style choices. This change alone would free up plenty of money to handle the health care costs of those in dire need of treatment, whether due to an acute emergency or chronic condition.Let’s go deeper on the first issue. Most of us refuse do something about implementing basic wellness strategies into our daily lives. We don’t exercise but we offer a lot of excuses. We don’t eat right but we offer a lot of excuses. We smoke and/or drink alcohol to excess and we offer a lot of excuses as to why we can’t do anything about it. We don’t take advantage of preventive health check-ups that look at blood pressure, cholesterol readings and body weight but we offer a lot of excuses. In short we neglect these things and the result is that we succumb much earlier than necessary to chronic diseases like heart problems, diabetes and high blood pressure. We wind up accessing doctors for these and more routine matters because “health care is there” and somehow we think we have no responsibility for reducing our demand on it.It is difficult for us to listen to these truths but easy to blame the sick. Maybe they should take better care of themselves! Well, that might be true or maybe they have a genetic condition and they have become among the unfortunate through absolutely no fault of their own. But the point is that you and I can implement personalized preventive disease measures as a way of dramatically improving health care access for others while reducing its costs. It is far better to be productive by doing something we can control then shifting the blame.There are a huge number of free web sites available that can steer us to a more healthful life style. “Google” “preventive health care strategies”, look up your local hospital’s web site and you will find more than enough help to get you started. Let’s go America – we can do this!

Making Online Education Attractive

All over the world, the numbers of people in school at the different levels takes pyramidal shape. There are huge numbers at the elementary, but as they progress, the numbers decrease, leaving just a few in higher education. In the United States, some 65 million students were expected to enroll from K to K12 in the fall of 2015. In the same period, it was expected that 20.2 million would be attending Colleges and Universities. It is estimated that 25% of fresh high school students in the U.S.A are not able to graduate. For fresh students who enter colleges or universities 1 out of 3 are likely not make it to second year. This dropout out rate hinders national development, because many people do not receive the full training they need to be functional in society. National development would be hugely fostered, if more adults receive education, in order that they become functional in society.I am not saying that all adults who were not fully educated are not playing important roles in society. There are very prominent individuals in society who dropped out of school at some level. Bill Gate, Mark Zuckerberg, Oprah Winfrey, for example, at some point dropped out of school. Though this list is not exhaustive, the number of people who dropped out of school or decided not to gain higher education and yet became successful are relatively few. For the majority who dropped out or discontinued education, and could not become successful in their careers, it was because they lacked the knowledge they needed to develop their potential. If you check the history of those who in spite of dropping out or discontinuing schooling have become successful, you would find that appeared to have found their life’s purpose and so pursued those goals and, more importantly, they received some kind of education later.Education as we all know is a life-long activity. At any point in time, whether you dropped out of school or got honors at your graduation, you would need education. The school dropout who has found himself a vocation or gained employment needs education so he/she can be more productive, the dropout who has realized the need to school but has ‘grown past school going age’ and desires to school obviously needs education, managers as well as employees need further education in order to keep pace with today’s rapidly changing world and gain increased wages and status respectively. Somehow, the traditional education dependent society we have created for ourselves and considers the ‘best’, limits our quest for continuing education. For many people, formal education ended the day they dropped out or graduated from High School, College or University, even though, technology makes it possible for us to sit in our houses and still get quality education.When technology – computers and internet connectivity – replaced physical classrooms and made it possible to study by distance in real time, it appeared the issue of continuous education for everyone, including the dropout and the working class have been solved. It appeared, and still does, that now the teacher need not leave his students, apply for study-leave or leave of absence to pursue further education. It appeared the fifty-year-old woman who dropped out of school several years ago could now school from home and it appeared the father could learn what his daughter is learning at College using the same device he uses to call her. That is what it appeared. Those who dropped out of school due to issues of finance and have not since had a breakthrough would not benefit, and those who have the money would not want to put their money into a certificate employers and academicians alike would frown upon. So little appear to have changed for these two groups of people, though online Colleges and Universities abound.Two prime issues are to blame. First, online education is too expensive for the target group of learners and second, there is the perception that online Colleges and Universities do not provide holistic education like the traditional Colleges and Universities. As indicated by Ed Vosganian – founder and CEO of College Funding 123, the cost of on-campus University for undergraduate is estimated at 42,000 dollars while for the same group it cost around 21,000 dollars for online universities. By comparison we would say that it cost far less to study via online. But we need not lose sight of those who mostly enroll in online University. It is those in the middle and lower classes who opt for online universities. They include; the employee who has sacrificed pleasure for higher qualification in return for better wages, the unemployed who wants to gain employable skills, the dropout who wants to get back to school in the hope that there will be a brighter future, and the people living in the remote part of the world, especially in the developing world, who don’t even have the money to pay fees and so would have to learn and work simultaneously. To these 21,000 dollars is money so huge, it is very difficult to raise. There are people of the higher income class who enroll in online universities, but online learning is not popular among these due to low prestige and the myths associated with online education. The online institutions will tell you, they would not put anything on your certificate to show that you received a non-traditional education. This kind of advert speaks of how society values online education. Online education is considered a cheap way of getting ‘watered down’ education. Online Colleges and Universities were until recently considered diploma mills. This perception still exists, though empirical evidence tells us there is no disparity in quality of students from traditional Colleges and Universities on one hand and online Colleges and Universities on the other. The online Universities and Colleges are doing their best to make online learning prestigious and bring down study cost, but they cannot do it alone. With government intervention online learning can become prestigious and lower and middle class friendly.Government should provide a national framework for online education, subsidize accreditation, and grant scholarships and student loans for students in online Colleges and Universities. A national framework to guide the operations of all online colleges and universities should be instituted by the state, through the Department of Education or the relevant government agency. This framework, which would be descriptive and not prescriptive in nature would describe, for example, the minimum courses to be taken at a given level, and the general mode of operation of online universities and colleges without prescribing specific courses or mode of operation. Accreditation is not just laborious for online Colleges and Universities; it is also expensive. This cost is passed to students, souring up program fees. If the government decides to absorb half the cost of accreditation, though there is no guarantee the program fees will be halved, the program fee would be reduced somehow. Lastly, most of the students who opt for online colleges and universities do not receive scholarships and student loans from the state. Those who receive something do not get huge scholarships and student loans like their counterparts in traditional Colleges and Universities. Government should make scholarships and students loans available to students of online Colleges and Universities just as it does for students in traditional Colleges and Universities.The ramifications of these interventions would definitely be awesome. Providing a national framework for online education would take away the false negative perception people have about online learning. Many think online learning is easy and also the number of credits taken are far less than those taken in traditional learning settings. This thinking exists because there are some poorly designed online courses in which certificate are awarded after just a couple of assignments have been submitted. Such practices can be stopped, when a national framework is developed and operationalized. A national framework will give credibility to online learning, because a national standard for online would have to be adhered to and so no online college or university can just sell certificate. Subsidizing Accreditation will yield three results. The most obvious is that, it would reduce program fees because amount to pass to the students would be less. Subsidizing accreditation fees would encourage online Colleges and Universities to seek accreditation from accrediting bodies recognize by the Department of Education or the appropriate state agency. Even though accreditation is not compulsory in some parts of the world, like the united states, some occupation that require state licensing would not accept degree from non-accredited Colleges and University. Prospective online learners are, usually, worried about whether the can easily work with their certificates. Government intervention would remove this worry and remove the negative perception people have about online education as well. Government interventions in the form of scholarship and loans would ease the financial burden and make it possible for those who hitherto would not be able to school to do so. In sum, government intervention would go a long way to produce an enlightened society by permitting many people to receive higher education.There are many people wanting to get higher education through online Colleges and Universities so they gain knowledge and skills, or enhance their knowledge and skills but cannot do because of either the cost or the uncertainty of the acceptability of the certificate. Government intervention in the form of national framework for online universities and colleges, subsidizing accreditation cost and providing scholarships and student loans would open the door for those who want to study from home. Government intervention can give the assurance that online learning is as good as traditional college or university learning, and that their certificate would be accepted jobs that require state licensing. It would ease the pressure on facilities in traditional Colleges and Universities, produce the well-educated citizenry needed for national development and convert the current pyramidal shape into a ‘near’ cylinder.REFERENCEEd Vosganian (n.d.). The Real Price of Online College. Retrieved from http://www.affordablecollegesonline.org/financial-aid/online-college-degree-cost/.

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S&P 500 Rallies As U.S. Dollar Pulls Back Towards Weekly Lows

Key Insights
The strong pullback in the U.S. dollar provided significant support to stocks.
Treasury yields have pulled back after touching new highs, which served as an additional positive catalyst for S&P 500.
A move above 3730 will push S&P 500 towards the resistance level at 3760.
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Pfizer Rallies After Announcing A Huge Price Hike For Its COVID-19 Vaccines
S&P 500 is currently trying to settle above 3730 as traders’ appetite for risk is growing. The U.S. dollar has recently gained strong downside momentum as the BoJ intervened to stop the rally in USD/JPY. Weaker U.S. dollar is bullish for stocks as it increases profits of multinational companies and makes U.S. equities cheaper for foreign investors.

The leading oil services company Schlumberger is up by 9% after beating analyst estimates on both earnings and revenue. Schlumberger’s peers Baker Hughes and Halliburton have also enjoyed strong support today.

Vaccine makers Pfizer and Moderna gained strong upside momentum after Pfizer announced that it will raise the price of its coronavirus vaccine to $110 – $130 per shot.

Biggest losers today include Verizon and Twitter. Verizon is down by 5% despite beating analyst estimates on both earnings and revenue. Subscriber numbers missed estimates, and traders pushed the stock to multi-year lows.

Twitter stock moved towards the $50 level as the U.S. may conduct a security review of Musk’s purchase of the company.

From a big picture point of view, today’s rebound is broad, and most market segments are moving higher. Treasury yields have started to move lower after testing new highs, providing additional support to S&P 500. It looks that some traders are ready to bet that Fed will be less hawkish than previously expected.

S&P 500 Tests Resistance At 3730

S&P 500 has recently managed to get above the 20 EMA and is trying to settle above the resistance at 3730. RSI is in the moderate territory, and there is plenty of room to gain additional upside momentum in case the right catalysts emerge.

If S&P 500 manages to settle above 3730, it will head towards the next resistance level at 3760. A successful test of this level will push S&P 500 towards the next resistance at October highs at 3805. The 50 EMA is located in the nearby, so S&P 500 will likely face strong resistance above the 3800 level.

On the support side, the previous resistance at 3700 will likely serve as the first support level for S&P 500. In case S&P 500 declines below this level, it will move towards the next support level at 3675. A move below 3675 will push S&P 500 towards the support at 3640.

SPDN: An Inexpensive Way To Profit When The S&P 500 Falls

Summary
SPDN is not the largest or oldest way to short the S&P 500, but it’s a solid choice.
This ETF uses a variety of financial instruments to target a return opposite that of the S&P 500 Index.
SPDN’s 0.49% Expense Ratio is nearly half that of the larger, longer-tenured -1x Inverse S&P 500 ETF.
Details aside, the potential continuation of the equity bear market makes single-inverse ETFs an investment segment investor should be familiar with.
We rate SPDN a Strong Buy because we believe the risks of a continued bear market greatly outweigh the possibility of a quick return to a bull market.
Put a gear stick into R position, (Reverse).
Birdlkportfolio

By Rob Isbitts

Summary
The S&P 500 is in a bear market, and we don’t see a quick-fix. Many investors assume the only way to navigate a potentially long-term bear market is to hide in cash, day-trade or “just hang in there” while the bear takes their retirement nest egg.

The Direxion Daily S&P 500® Bear 1X ETF (NYSEARCA:SPDN) is one of a class of single-inverse ETFs that allow investors to profit from down moves in the stock market.

SPDN is an unleveraged, liquid, low-cost way to either try to hedge an equity portfolio, profit from a decline in the S&P 500, or both. We rate it a Strong Buy, given our concern about the intermediate-term outlook for the global equity market.

Strategy
SPDN keeps it simple. If the S&P 500 goes up by X%, it should go down by X%. The opposite is also expected.

Proprietary ETF Grades
Offense/Defense: Defense

Segment: Inverse Equity

Sub-Segment: Inverse S&P 500

Correlation (vs. S&P 500): Very High (inverse)

Expected Volatility (vs. S&P 500): Similar (but opposite)

Holding Analysis
SPDN does not rely on shorting individual stocks in the S&P 500. Instead, the managers typically use a combination of futures, swaps and other derivative instruments to create a portfolio that consistently aims to deliver the opposite of what the S&P 500 does.

Strengths
SPDN is a fairly “no-frills” way to do what many investors probably wished they could do during the first 9 months of 2022 and in past bear markets: find something that goes up when the “market” goes down. After all, bonds are not the answer they used to be, commodities like gold have, shall we say, lost their luster. And moving to cash creates the issue of making two correct timing decisions, when to get in and when to get out. SPDN and its single-inverse ETF brethren offer a liquid tool to use in a variety of ways, depending on what a particular investor wants to achieve.

Weaknesses
The weakness of any inverse ETF is that it does the opposite of what the market does, when the market goes up. So, even in bear markets when the broader market trend is down, sharp bear market rallies (or any rallies for that matter) in the S&P 500 will cause SPDN to drop as much as the market goes up.

Opportunities
While inverse ETFs have a reputation in some circles as nothing more than day-trading vehicles, our own experience with them is, pardon the pun, exactly the opposite! We encourage investors to try to better-understand single inverse ETFs like SPDN. While traders tend to gravitate to leveraged inverse ETFs (which actually are day-trading tools), we believe that in an extended bear market, SPDN and its ilk could be a game-saver for many portfolios.

Threats
SPDN and most other single inverse ETFs are vulnerable to a sustained rise in the price of the index it aims to deliver the inverse of. But that threat of loss in a rising market means that when an investor considers SPDN, they should also have a game plan for how and when they will deploy this unique portfolio weapon.

Proprietary Technical Ratings
Short-Term Rating (next 3 months): Strong Buy

Long-Term Rating (next 12 months): Buy

Conclusions
ETF Quality Opinion
SPDN does what it aims to do, and has done so for over 6 years now. For a while, it was largely-ignored, given the existence of a similar ETF that has been around much longer. But the more tenured SPDN has become, the more attractive it looks as an alternative.

ETF Investment Opinion

SPDN is rated Strong Buy because the S&P 500 continues to look as vulnerable to further decline. And, while the market bottomed in mid-June, rallied, then waffled since that time, our proprietary macro market indicators all point to much greater risk of a major decline from this level than a fast return to bull market glory. Thus, SPDN is at best a way to exploit and attack the bear, and at worst a hedge on an otherwise equity-laden portfolio.

S&P 500 Biotech Giant Vertex Leads 5 Stocks Showing Strength

Your stocks to watch for the week ahead are Cheniere Energy (LNG), S&P 500 biotech giant Vertex Pharmaceuticals (VRTX), Cardinal Health (CAH), Steel Dynamics (STLD) and Genuine Parts (GPC).

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While the market remains in correction, with analysts and investors wary of an economic downturn, these five stocks are worth adding to watchlists. S&P 500 medical giants Vertex and Cardinal Health have been holding up, as health-care related plays tend to do well in down markets.

Steel Dynamics and Genuine Parts are both coming off strong earnings as both the steel and auto parts industries report optimistic outlooks. Meanwhile, Cheniere Energy saw sales boom in the second quarter as demand in Europe for natural gas continues to grow.

Major indexes have been making rally attempts with the Dow Jones and S&P 500 testing weekly support on Friday. With market uncertainty, investors should be ready for follow-through day breakouts and keep an eye on these stocks.

Cheniere Energy, Cardinal Health and VRTX stock are all on IBD Leaderboard.

Cheniere Energy Stock
LNG shares rose 1.1% to 175.79 during Friday’s market trading. On the week, the stock advanced 3.1%, not from highs, bouncing from its 21-day and 10-week lines earlier in the week.

Cheniere Energy has been consolidating since mid-September, but needs another week to forge a proper base, with a potential 182.72 buy point formed on Aug. 10.

Houston-based Cheniere Energy was IBD Stock Of The Day on Thursday, as the largest U.S. producer of liquefied natural gas eyes strong demand in Europe.

Even though natural gas prices are plunging in the U.S. and Europe, investors still see strong LNG demand for Cheniere and others.

The U.K. government confirmed last week that it is in talks for an LNG purchase agreement with a number of companies, including Cheniere.

In the first half of 2021, less than 40% of Cheniere’s cargoes of LNG landed in Europe. That jumped to more than 70% through this year’s second quarter, even as the company ramped up new export capacity. The urgency of Europe’s natural gas shortage only intensified last month. That is when an explosion disabled the Nord Stream 1 pipeline from Russia that had once supplied 40% of the European Union’s natural gas.

In Q2, sales increased 165% to $8 billion and LNG earned $2.90 per share, up from a net loss of $1.30 per share in Q2 2021. The company will report Q3 earnings Nov. 3, with investors seeing booming profits for the next few quarters.

Cheniere Energy has a Composite Rating of 84. It has a 98 Relative Strength Rating, an exclusive IBD Stock Checkup gauge for share price movement with a 1 to 99 score. The rating shows how a stock’s performance over the last 52 weeks holds up against all the other stocks in IBD’s database. The EPS rating is 41.

Vertex Stock
VRTX stock jumped 3.4% to 300 on Friday, rebounding from a test of its 50-day moving average. Shares climbed 2.2% for the week. Vertex stock has formed a tight flat base with an official buy point of 306.05, according to MarketSmith analysis.

The stock has remained consistent over recent weeks, while the relative strength line has trended higher. The RS line tracks a stock’s performance vs. the S&P 500 index.

Vertex Q3 earnings are on due Oct. 27. Analysts see EPS edging up 1% to $3.61 per share with sales increasing 16% to $2.2 billion, according to FactSet.

The Boston-based global biotech company dominates the cystic fibrosis treatment market. Vertex also has other products in late-stage clinical development that target sickle cell disease, Type 1 diabetes and certain genetically caused kidney diseases. That includes a gene-editing partnership with Crispr Therapeutics (CRSP).

In early August, Vertex reported better-than-expected second-quarter results and raised full-year sales targets.

S&P 500 stock Vertex ranks second in the Medical-Biomed/Biotech industry group. VRTX has a 99 Composite Rating. Its Relative Strength Rating is 94 and its EPS Rating is 99.

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Cardinal Health Stock
CAH stock advanced 3.2% to 73.03 Friday, clearing a 71.22 buy point from a shallow cup-with-handle base and hitting a record high. But volume was light on the breakout. CAH stock leapt 7.3% for the week.

Cardinal Health stock’s relative strength line has also been trending up for months.

The cup-with-handle base is part of a base-on-base pattern, forming just above a cup base cleared on Aug. 11.

Cardinal Health, based in Dublin, Ohio, offers a wide assortment of health care services and medical supplies to hospitals, labs, pharmacies and long-term care facilities. The company reports that it serves around 90% of hospitals and 60,000 pharmacies in the U.S.

S&P 500 stock Cardinal Health will report Q1 2023 earnings on Nov. 4. Analysts forecast earnings falling 26% to 96 cents per share. Sales are expected to increase 10% to $48.3 billion, according to FactSet.

Cardinal Health stock ranks first in the Medical-Wholesale Drug/Supplies industry group, ahead of McKesson (MCK), which is also showing positive action. CAH stock has a 94 Composite Rating out of 99. It has a 97 Relative Strength Rating and an EPS rating of 73.

Steel Dynamics Stock
STLD shares shot up 8.5% to 92.92 on Friday and soared 19% on the week, coming off a Steel Dynamics earnings beat Wednesday night.

Shares blasted above an 88.72 consolidation buy point Friday after clearing a trendline Thursday. STLD stock is 17% above its 50-day line, definitely extended from that key average.

Steel Dynamics’ latest consolidation could be seen as part of a larger base going back six months.

Steel Dynamics topped Q3 earnings views with EPS rising 10% to $5.46 while revenue grew 11% to $5.65 billion. The steel producer’s outlook is optimistic despite weaker flat rolled steel pricing. STLD reports its order activity and backlogs remain solid.

The Fort Wayne, Indiana-based company is among the largest producers of carbon steel products in the U.S. It engages in metal recycling operations along with steel fabrication and produces myriad steel products.

How Millett Grew Steel Dynamics From A Three Employee Business

STLD stock ranks first in the Steel-Producers industry group. STLD stock has a 96 Composite Rating out of 99. It has a 90 Relative Strength Rating, an exclusive IBD Stock Checkup gauge for share-price movement that tops at 99. The rating shows how a stock’s performance over the last 52 weeks holds up against all the other stocks in IBD’s database. The EPS rating is 98.

Genuine Parts Stock
GPC stock gained 2.8% to 162.35 Friday after the company topped earnings views with its Q3 results on Thursday. For the week GPC advanced 5.1% as the stock held its 50-day line and is in a flat base.

GPC has an official 165.09 flat-base buy point after a three-week rally, according to MarketSmith analysis.

The relative strength line for Genuine Parts stock has rallied sharply to highs over the past several months.

On Thursday, the Atlanta-based auto parts company raised its full-year guidance on growth across its automotive and industrial sales.

Genuine Parts earnings per share advanced 19% to $2.23 and revenue grew 18% to $5.675 billion in Q3. GPC’s full-year guidance is now calling for EPS of $8.05-$8.15, up from $7.80-$7.95. The company now forecasts revenue growth of 15%-16%, up from the earlier 12%-14%.

During the Covid pandemic, supply chain constraints caused a major upheaval in the auto industry, sending prices for new and used cars to record levels. This has made consumers more likely to hang on to their existing vehicles for longer, driving mileage higher and boosting demand for auto replacement parts.

Fellow auto stocks O’Reilly Auto Parts (ORLY) and AutoZone (AZO) have also rallied near buy points amid the struggling market. O’Reilly reports on Oct. 26.

IBD ranks Genuine Parts first in the Retail/Wholesale-Auto Parts industry group. GPC stock has a 96 Composite Rating. Its Relative Strength Rating is 94 and it has an EPS Rating of 89.

Shoe Repairs And Several Other Things When I Was 7

Shoe Repairs And Several Other Things When I Was 7
My Dad repaired most of our shoes believe it or not, I can hardly believe it myself now. With 7 pairs of shoes always needing repairs I think he was quite clever to learn how to “Keep us in shoe Leather” to coin a phrase!

He bought several different sizes of cast iron cobbler’s “lasts”. Last, the old English “Laest” meaning footprint. Lasts were holding devices shaped like a human foot. I have no idea where he would have bought the shoe leather. Only that it was a beautiful creamy, shiny colour and the smell was lovely.

But I do remember our shoes turned upside down on and fitted into these lasts, my Dad cutting the leather around the shape of the shoe, and then hammering nails, into the leather shape. Sometimes we’d feel one or 2 of those nails poking through the insides of our shoes, but our dad always fixed it.

Hiking and Swimming Galas
Dad was a very outdoorsy type, unlike my mother, who was probably too busy indoors. She also enjoyed the peace and quiet when he took us off for the day!

Anyway, he often took us hiking in the mountains where we’d have a picnic of sandwiches and flasks of tea. And more often than not we went by steam train.

We loved poking our heads out of the window until our eyes hurt like mad from a blast of soot blowing back from the engine. But sore, bloodshot eyes never dampened our enthusiasm.

Dad was an avid swimmer and water polo player, and he used to take us to swimming galas, as they were called back then. He often took part in these galas. And again we always travelled by steam train.

Rowing Over To Ireland’s Eye
That’s what we did back then, we had to go by rowboat, the only way to get to Ireland’s eye, which is 15 minutes from mainland Howth. From there we could see Malahide, Lambay Island and Howth Head of course. These days you can take a Round Trip Cruise on a small cruise ship!

But we thoroughly enjoyed rowing and once there we couldn’t wait to climb the rocks, and have a swim. We picnicked and watched the friendly seals doing their thing and showing off.

Not to mention all kinds of birdlife including the Puffin.The Martello Tower was also interesting but a bit dangerous to attempt entering. I’m getting lost in the past as I write, and have to drag myself back to the present.

Fun Outings with The camera Club
Dad was also a very keen amateur photographer, and was a member of a camera Club. There were many Sunday photography outings and along with us came other kids of the members of the club.

And we always had great fun while the adults busied themselves taking photos of everything and anything, it seemed to us. Dad was so serious about his photography that he set up a dark room where he developed and printed his photographs.

All black and white at the time. He and his camera club entered many of their favourites in exhibitions throughout Europe. I’m quite proud to say that many cups and medals were won by Dad. They have been shared amongst all his grandchildren which I find quite special.

He liked taking portraits of us kids too, mostly when we were in a state of untidiness, usually during play. Dad always preferred the natural look of messy hair and clothes in the photos of his children.