“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
“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
“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.
FOMC RATE DECISION (CNBC)
“The Federal
Reserve on Wednesday sharply ramped up its expectations for
economic growth but indicated that there are no interest rate hikes likely
through 2023 despite an improving outlook and a turn this year to higher
inflation.” Story at...
HOUSING STARTS / BUILDING PERMITS (CNBC)
“Housing starts decreased 6.0% to a seasonally adjusted
annual rate of 1.580 million units last month, the Commerce Department said on
Thursday... Permits for future homebuilding shot up 10.4% to a rate of 1.881
million units in January.” Story at...
EIA CRUDE INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those
in the Strategic Petroleum Reserve) increased by 2.4 million barrels from the
previous week. At 500.8 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
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website
as of 6:30pm 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 rose
about 0.3% to 3974.
-VIX fell about 3% to 19.23.
-The yield on the 10-year
Treasury rose to 1.645%.
We can see the impact of the
FED in the chart below. The FED announcement was 2PM and the Index shot-up from
there.
The daily sum of 20 Indicators
slipped from +8 to +4 (a positive number is bullish; negatives are bearish);
the 10-day smoothed sum that smooths the daily fluctuations improved from +45
to +51 (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, Volume & VIX are bullish; Sentiment, is neutral.
There are not many negative
signs around. The S&P 500 remains relatively stretched above its 200-dMA. I
think that will remain stretched and I am not concerned at this point.
Investors are focusing on the unprecedented fiscal stimulus and the extreme
FED-support keeping interest rates down.
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.
