“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
“The big money is not in the buying and selling. But in the
waiting.” - Charlie Munger, Vice Chairman, Berkshire Hathaway
EIA CRUDE INVENTORIES (Energy Information Administration)
“U.S. commercial crude oil inventories (excluding those
in the Strategic Petroleum Reserve) decreased by 1.6 million barrels from the
previous week. At 494.4 million barrels, U.S. crude oil inventories are about
13% above the five year average for this time of year.” Story at...
http://ir.eia.gov/wpsr/wpsrsummary.pdf
STOCK MARKET ANXIETY TO INTENSIFY (MarketWatch)
“In his newsletter, published Monday, Lancz [Alan
B. Lancz & Associates, Inc.] said that many investors have thrown
caution to the wind, highlighting the fervor for initial public offerings like Snowflake, and said significantly more investor
prudence will be required in the months ahead. “Mitigating risk has become lost
in the elation of a rising market, and yet should be a primary area of focus,
at least through December,” he wrote.” Story at...
MARKET MAY HAVE PEAKED (MarketWatch)
“Ben Kirby, portfolio manager at Thornburg Investment
Management said we may have already seen the market highs this year and it was
time for investors to “head for the multiasset hills.” “I hate to say it,
but I’m telling investors that we may have already seen the highs for the
year,” he said.” Story at...
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website at
5:45 Wednesday. Total US numbers are on the left axis; daily numbers are on the
right side of the graph with the 10-dMA of daily numbers in Green. New cases are
now trending HIGHER.
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 fell about 2.4% to 3237.
-VIX rose about 6% to 8.58.
-The yield on the 10-year Treasury remained 0.676%.
I rarely watch CNBC anymore. It just confuses me with
opinions which are often not based in the rigorous analysis that I perform. I
watched today and I did get a very interesting piece of info from Karen Fineman
on CNBC’s Fast Money show. Why didn’t
the VIX go much higher today? Her answer: Panic selling of calls kept the VIX lower
than it would have been otherwise. Grasso’s call of a S&P 500 low of 2850 was
also interesting.
The reason I wanted to mention CNBC was that several
announcers noted that today’s (Wednesday) close did not breach Monday’s low. I
can only answer, “sort of”. On a closing basis we dropped well below Monday’s
low. It only remained higher on an intra-day basis. My system is based entirely
on closing numbers and closing data.
FACTOID OF THE DAY:
What does it take to make a low on the S&P 500? A lot
of new 52-week-lows. This correction is already deeper than the small
corrections in 2019; but, as the chart below shows, new-lows are nowhere near
where they were at those 2019 bottoms. We’re not at a bottom yet.
As of today, the S&P 500 is down 9.6% from its all-time
high. This is day 14 of the correction. The average time from top to bottom for
a correction is 35-days for corrections less than 10% and 68-days for bigger
corrections. The 200-dMA is now 3106, 4.2% lower than today’s close.
The daily sum of 20 Indicators dropped from +4 to -4 (a
positive number is bullish; negatives are bearish). The 10-day smoothed sum
that smooths the daily fluctuations improved from -35 to -33. (These numbers
sometimes change after I post the blog based on data that comes in late.) Most
of these indicators are short-term and many are trend following.
The Long Term NTSM indicator ensemble remained HOLD, but
it is only a whisker from another SELL signal. The Price Indicator is bearish. Other
indicators in the ensemble are hold.
RSI is oversold today, so we may be getting closer to a
bounce. A bounce is likely to fail. We’ll
see.
I’ve been looking for market internals to improve while
the S&P 500 makes a lower low. So
far, we’ve had 6 lower-lows with declining internals. This suggests we will go
lower.
I remain bearish.
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.
*For additional background on the ETF ranking system see
NTSM Page at…
http://navigatethestockmarket.blogspot.com/p/exchange-traded-funds-etf-ranking.html
TODAY’S RANKING OF THE DOW 30 STOCKS (Ranked Daily)
Here’s the revised DOW 30 and its momentum analysis. 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…
https://navigatethestockmarket.blogspot.com/p/a-system-for-trading-dow-30-stocks-my_8.html
-Apple is down 20% in September.
WEDNESDAY MARKET INTERNALS (NYSE DATA)
Market Internals declined
to BEARISH 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 30% invested in
stocks. You may wish to have a higher or lower % invested in stocks depending
on your risk tolerance. 30% is a conservative position that I re-evaluate daily,
but it is appropriate for the correction.
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%; if this correction is deep enough, 80% would not
be out of the question.
