"This imaginary person out there - Mr. Market - he's
kind of a drunken psycho. Some days he gets very enthused, some days he gets
very depressed. And when he gets really enthused, you sell to him and if he
gets depressed you buy from him. There's no moral taint attached to that."
- Warren
Buffett
“The big money is not in the buying and selling. But in the
waiting.” - Charlie Munger, Vice Chairman, Berkshire Hathaway
JOLTS JOB OPENINGS (MarketWatch)
“Job openings rose 518,000 to 5.9 million in June,
according to the Labor Department on Monday…The number
of layoffs and firings rose 522,000 to 4.8 million in June. Hiring eased to 6.7
million from a record 7.2 million in May.” Story at…
PAUL SCHATZ COMMENTARY EXCERPT (Heritage Capital, LLC)
“The bulls have run hard this week [ending 7 August] although
the window of opportunity for a decline has not closed yet. There are all kinds
of cracks in the market’s foundation. So far, each and every time the market
has just run over them. And before someone asks, the answer remains yes. I am
still very concerned about the outperformance in the NASDAQ 100 and those 5
stocks in particular versus the rest of the market… the New York Stock Exchange
Advance/Decline Line…indicates a low likelihood of a large decline. I said
low, but not impossible…” Commentary at…
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website
at 5:10 Monday. I’ve plotted the daily numbers on the right side of the graph
with a 10-dMA of daily numbers in Green. Looks like we’ve peaked; is a second
wave coming? Who knows?
-Monday the S&P 500 rose about 0.3% to 3360.
-VIX dipped about 1% to 22.13.
-The yield on the 10-year Treasury rose to 0.583%.
Not much change – the bulls continue to buy.
We’ve only seen 2
down days in the last 2 weeks of trading.
That’s a bearish sign. Another up-day Tuesday would send a sell signal
for this indicator.
The S&P 500 is now 9.9% above its 200-dMA. Values in
the 10-15% range are sell-signal. While this could be a major top, it could
presage just a 3-5% pullback. The Index was 11.5% above its 200-day when the
Coronavirus crash began. It was 8.6% above its 200-day before the 6% retreat in
July of 2019.
The daily sum of 20 Indicators slipped from +13 to
+12 (a positive number is bullish; negatives are bearish). The 10-day smoothed
sum that smooths the daily fluctuations improved from +3 to +18. (These
numbers sometimes change after I post the blog based on data that comes in
late.) Most of these indicators are short-term.
I am tempted to Buy-the-Dip (when it gets here); but with
more than 16-million people out of work, one wonders whether the S&P 500 is
fairly priced based on what is still a very weak economy.
Looks like some sort of pullback is getting closer. Big
or small? I don’t know.
MOMENTUM ANALYSIS:
TODAY’S RANKING OF
15 ETFs (Ranked Daily)
The top ranked ETF receives 100%. The rest are then
ranked based on their momentum relative to the leading ETF.
TODAY’S RANKING OF THE DOW 30 STOCKS (Ranked Daily)
The top ranked stock receives 100%. The rest are then
ranked based on their momentum relative to the leading stock.
For more details, see NTSM Page at…
MONDAY MARKET INTERNALS (NYSE DATA)
Market Internals remained
BULLISH on the market.
Market Internals are a decent trend-following analysis of
current market action, but should not be used alone for short term trading.
They are usually right, but they are often late. They are most useful when they diverge from
the Index.
Using the Short-term indicator in 2018 in SPY would have
made a 5% gain instead of a 6% loss for buy-and-hold. The methodology was Buy
on a POSITIVE indication and Sell on a NEGATIVE indication and stay out until
the next POSITIVE indication. The back-test included 13-buys and 13-sells, or a
trade every 2-weeks on average.
My current stock allocation is about 40% invested in
stocks. You may wish to have a higher or lower % invested in stocks depending
on your risk tolerance. 40% is a conservative position that I re-evaluate
daily. It is not far below my fully invested position which would be between
50-60%.
As a retiree, 50% in the stock market is about fully
invested for me – it is a cautious and conservative number. If I feel very
confident, I might go to 60%; had we seen a successful retest of the bottom,
80% would not have been out of the question.
