“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
“In my decades of investing experience, I have not seen
such mindless and uninformed speculation as I have witnessed
recently. Indeed, in nominal dollar terms...it is far in excess of the
dot.com boom.” – Doug Cass.
“The Senate ought not act rashly by changing its rules to
satisfy a strong-willed majority acting in the heat of the moment…Proponents of
the ‘nuclear option’ argue that their proposal is simply the latest iteration
of a growing trend towards majoritarianism in the Senate. God save us from that
fate, if it is true…Adopting the ‘nuclear option’ would change this fundamental
understanding and unbroken practice of what the Senate is all about. Senators
would start thinking about changing other rules when they became
“inconvenient.” …Altering Senate rules to help in one political fight or
another could become standard operating procedure, which, in my view, would be
disastrous.” - Senator Joe Biden defending the filibuster in 2005.
“The foundation for the filibuster today can be traced to
an argument by former Vice President Aaron Burr that led to a change in the
early 1800s. The minority has used versions of the rule to block or force
consensus on controversial legislation, ranging from war actions to oil
mandates. It was not created in the Jim Crow era.” – From... https://jonathanturley.org/2021/03/29/democrats-cannot-erase-the-history-or-hypocrisy-of-the-filibuster/
“After POTUS Joe Biden denounced
the rampant abuse of the filibuster last year, we did some digging. Republicans
used it once. Democrats used it 327 times.” – John
Roberts, Fox News
ADP EMPLOYMENT CHANGE (ADP)
“Private sector employment increased by 517,000 jobs from
February to March according to the March ADP® National Employment Report...“We
saw marked improvement in March’s labor market data, reporting the strongest
gain since September 2020,” said Nela Richardson, chief economist, ADP. “Job
growth in the service sector significantly outpaced its recent monthly average,
led with notable increase by the leisure and hospitality industry.” Press
release at...
CHICAGO PMI (Advisor Perspectives)
“The latest Chicago Purchasing Manager's Index, or the
Chicago Business Barometer, jumped to 66.3 in March from 59.5 in February,
which is in expansion territory and its highest since July 2018. Values above
50.0 indicate expanding manufacturing activity.” Analysis at...
EIA CRUDE INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those
in the Strategic Petroleum Reserve) decreased by 0.9 million barrels from the
previous week. At 501.8 million barrels, U.S. crude oil inventories are about
6% above the five year average for this time of year.” Press release at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf
BLAIN’S MORNING PORRIDGE – THE TAIL THAT WAGS THE DOG (Morning
Porridge)
“I was talking to a fund manager y’day who told me her
kid’s nanny has lost money on Bitcoin – bot high and sold low. As Ben Graham
might have said; “when the shoe-shine boy tells you he’s bought Ethereum and
digital NFTs, it’s time to sell.” The current market has got 1929, 1987, 2000
writ in bold blood red letters all across it.” Commentary at...
https://morningporridge.com/blog/blains-morning-porridge/the-tail-that-wags-the-dog/
INCREDIBLE SHRINKING INCOME INEQUALITY (WSJ)
“The refrain is all too familiar: Widening income
inequality is a fatal flaw in capitalism and an “existential” threat to
democracy. From 1967 to 2017, income inequality in the U.S. spiked 21.4%, and
everyone from U.S. senators to the pope says it’s an urgent problem. Yet the
data upon which claims about income inequality are based are profoundly
flawed...income inequality is lower than it was 50 years ago.” - and Mr. Gramm is a former
chairman of the Senate Banking Committee and a visiting scholar at the American
Enterprise Institute. Mr. Early served twice as assistant commissioner at the
Bureau of Labor Statistics.Commentary
at...
https://www.wsj.com/articles/incredible-shrinking-income-inequality-11616517284
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website
as of 5:45pm 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. Today’s number of new cases, 61,600, is closer to the 10-day average .
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 rose
about 0.6% to 3984.
-VIX dipped about 3% to 18.96.
-The yield on the 10-year
Treasury rose to 1.745%.
The S&P 500 made a new-high
today and the % of new-highs on the NYSE looks about average which is good. The
Index still looks like it can make 4100. Will it go higher? We’ll check the
numbers when the Index gets there. Breadth is weak with the % of issues
advancing on the NYSE now at 47.9% over the last 10-days. That is a 10-day
number so I won’t get too worried yet.
The daily sum of 20 Indicators
remained +1 (a positive number is bullish; negatives are bearish); the 10-day
smoothed sum that smooths the daily fluctuations dropped from -23 to -26 (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 BUY. Price & VIX are bullish; Volume &
Sentiment are neutral.
I remain Bullish.
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.
As of 9 March, my
stock-allocation is about 60% invested in stocks. You may wish to have a higher
or lower % invested in stocks depending on your risk tolerance. 50% is a
conservative position that I consider fully invested for most retirees.
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, and I can call a bottom, 80% would not be out of the question.
The markets have not
retested the lows on recent corrections and that left me under-invested on the
bounces. I will need to put less reliance on retests in the future.
