“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
"The extent to which the president, President Trump,
for months leading up to January 6 spread the notion that the election had been
stolen or that the election was rigged was a lie and people need to understand
that. We need to make sure that we as Republicans are the party of truth that
we are being honest about what really did happen in 2020..." - Liz
Cheney, US Republican Representative, Wyoming.
“January 6 is going to leave a scar. For 220 years one of
the most beautiful things about America has been a peaceful transfer of power.
But what we saw three weeks ago was ugly, shameful mob violence to disrupt a
Constitutionally-mandated meeting of Congress to affirm that peaceful transfer
of power...It happened because the president lied to you. He lied about the
election results for 60 days. Despite losing 60 straight court challenges, many
of them handed down by Trump-appointed judges...He lied by saying the vice
president could violate his constitutional oath and declare a new winner. That
wasn't true.” - Ben Sasse, US Republican Senator, Nebraska.
This country was founded by the bayonet; it survives by
the ballot. Those who falsely disparage
the honesty of our elections are striking a blow at the foundations of our
nation and should be charged with sedition. – Meade Stith
FOMC MINUTES (CNBC)
“Federal Open Market Committee members at their most
recent gathering reaffirmed that the central bank will be keeping policy loose
well into the future, according to meeting minutes released Wednesday...The
statement did note that the speed of economic activity and improvements in the
labor market has “moderated in recent months.” Story at...
https://www.cnbc.com/2021/02/17/federal-reserve-releases-minutes-from-its-january-meeting.html
RETAIL SALES (CNBC)
“Consumers flocked to spend their stimulus checks in
January, sending retail sales for the month up 5.3% in a blockbuster start to
2021, according to a government report Wednesday.” Story at...
https://www.cnbc.com/2021/02/17/us-retail-sales-january-2021.html
PRODUCER PRICE INDEX (Advisor Perspectives)
“This morning's release of the January Producer Price
Index (PPI) for Final Demand was at 1.3% month-over-month seasonally adjusted,
down from a 0.3% increase last month. It is at 1.7% year-over-year, up from
0.8% last month, on a non-seasonally adjusted basis. Core Final Demand (less
food and energy) came in at 1.2% MoM, up from the previous month and is up 2.0%
YoY NSA. Investing.com MoM
consensus forecasts were for 0.4% headline and 0.2% core.” Commentary and
charts at...
INDUSTRIAL PRODUCTION (Manufacturing.net)
“American
industry expanded for the fourth consecutive month in January, but it has yet
to return to the level of activity that preceded the pandemic. U.S. industrial
production — which includes output factories, mines and utilities — rose 0.9%
last month on top of increases of 1.3% in December, 0.9% in November and 1.1%
in October...” Story at...
https://www.manufacturing.net/automotive/news/21283715/us-industrial-production-climbs-09-in-january
HOWARD MARKS ON SPECULITIVE MANIAS (Real Investment
Advice)
“One of my favorite investing legends is Oaktree
Management’s Howard Marks. His investing wisdom and in-depth knowledge of
investor psychology and market dynamics are unparalleled. Given the “speculative mania”
we continue to watch in the market, I thought a review of some of his previous
thoughts is appropriate....”
[-Lance Roberts, Chief Portfolio Strategist/Economist
for RIA Advisors.]
“...Howard Marks: It’s the swings of psychology
that get people into the biggest trouble, especially since investors’ emotions
invariably swing in the wrong direction at the wrong time. When things are going well
people become greedy and enthusiastic, and when times are troubled, people
become fearful and reticent. That’s just the wrong thing to do. It’s
important to control fear and greed.” - Commentary and charts
at...
https://realinvestmentadvice.com/technically-speaking-howard-marks-on-speculative-manias/
GREEN NEW DEAL PUSH BACK – FALSE CLAIMS ABOUT RENEWABLE
ENERGY (AP)
“With millions of Texas residents still without power
amid frigid temperatures, conservative commentators have falsely claimed that
wind turbines and solar energy were primarily to blame.” Story at...
My cmt: The article points out that problems with gas and
nuclear plants caused twice the outages that wind-power did. Perhaps, but if
you lose 25% of your power generation, you will be in a world of hurt. It will be interesting to see what comes from
the failures. My point was simply that
you’d better have reliable energy sources available when the wind don’t blow
and the sun don’t shine...oh, and when the turbines freeze.
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website
as of 5:30pm Wednesday. US total case 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.
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500
dipped about a pt to 3931.
-VIX rose about 0.2% to 21.50.
-The yield on the 10-year Treasury
slipped to 1.274%.
The market action continues to
hint at a weakness. The markets opened lower and made progress during the day,
but didn’t manage to close in positive territory. I have no guess when a
pullback (if any) might begin, but as others have pointed out, February and
March have been bad months in the last 2 years.
The daily sum of 20 Indicators declined from +1 to -1 (a
positive number is bullish; negatives are bearish); the 10-day smoothed sum
that smooths the daily fluctuations improved from +8 to +11 (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.
There are a few bear signs
around, but the market has been ignoring these and only one is a top indicator:
The S&P 500 is 15.4% above its 200-dMA (Sell point is 12%.); when Sentiment
is considered, the signal is also bearish. (This is a Top Indicator, but the
market has been ignoring this value for quite a while.)
We still see 2 very bullish
buy signals: Both the Long-term and Short-Term Fosback Logic Indicators are saying
“Buy.” That’s because the number of New-Lows has been very small and the number
of New-Highs has been very high.
The Long Term NTSM indicator
ensemble remained HOLD. Volume is Bullish; VIX, Sentiment & Price
are neutral.
I am still conservatively positioned, but I did add the
XLE-ETF 10 Feb. I won’t rush to add more
stocks, but I may average in to get to 50%, fully invested if we can get a
pullback and identify a buy signal.
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
WEDNESDAY MARKET INTERNALS
(NYSE DATA)
Market Internals remained NEUTRAL 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.
The markets have not
retested the lows on recent corrections and that has left me under-invested on
the bounces. I will need to put less reliance on retests in the future.
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 a correction is deep
enough, 80% would not be out of the question.
