“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
**MY Work-around for Blogger is to paste text using an
older version of Explorer; save the blog-post and then paste graphics using CHROME. Haven’t got a clue why it works, although I
may have more typos than before’ it’s harder to edit.**
VIX UPRISING (Northman Trader)
https://northmantrader.com/2020/09/17/vix-uprising/
MARKET BOTTOM STILL AHEAD (Heritage Capital)
“As of Thursday, Apple is down 20% from the highs and few
have noticed. I continue to believe there is a real chance that the Fab Five
Plus have put in long-term peaks versus the rest of the market. In other words,
instead of buying the dip as so many have done over the years, it’s now time to
sell the rallies and find other instruments to invest. Yes, I know. That sounds
treasonous.” Paul Schatz, President Heritage Capital. Commentary at...
https://investfortomorrow.com/blog/market-bottom-still-ahead/
STOCK MARKET AT START OF SELLOFF (MarketWatch)
“Starting right about now, the stock market will see a
significant and sustained selloff through about Oct. 10. Don’t look to gold as
a hedge. It’s riding for a fall, too, despite the widespread misbelief that it
protects you against losses in weak stock markets. The bottom line: Ghosts and
goblins come out in the market in the runup to Halloween, and we can expect the
same this year.” Commentary by Larry Williams, World Cup Trading Champion, at...
WHY I AM SUING CNN (Gatestone Institute)
“Freedom of speech is designed to promote the marketplace
of ideas. It is not a license for giant media companies to deliberately and
maliciously defame citizens, even public figures. So when CNN made a decision
to doctor a recording so as to deceive its viewers into believing that I said
exactly the opposite of what I actually said, that action was not protected by
the First Amendment. So I am suing them for a lot of money, not in order to
enrich myself, but to deter CNN and other media from maliciously misinforming
their viewers at the expense of innocent people.” – Alan Dershowitz. Commentary
at...
https://www.gatestoneinstitute.org/16520/cnn-lawsuit-dershowitz
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website at
6:30 Monday. 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. There is a
worrisome trend in the numbers: they are now trending HIGHER.
MARKET REPORT / ANALYSIS
-Monday the S&P 500 dropped about 1.1% to 3281.
-VIX rose about 8% to 27.78.
-The yield on the 10-year Treasury dipped to 0.668%.
As of today, the S&P 500 is down 8.4% from its
all-time high. This is day 12 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 3104, 5.7% lower than today’s close.
There don’t seem to be signs of support above the 200-dMA when looking at the
S&P 500 charts.
The daily sum of 20 Indicators slipped from -1 to -5 (a
positive number is bullish; negatives are bearish). The 10-day smoothed sum
that smooths the daily fluctuations declined from -47 to -49. (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 SELL.
Volume and Price Indicators are bearish. It has been SELL for the last 10 days.
I remain bearish. Volume dropped, but volume alone is not
a good indicator. There was late-day buying today, but I think the dip-buyers are reading the tea leaves incorrectly. I don't think that today was a bottom.
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
MONDAY MARKET INTERNALS (NYSE DATA)
Market Internals switched
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. The XLE has been a loser for me since I was too early. It is still
yielding over 10%, so I have to remind myself to be patient.
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.
