“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.
GDP – THIRD ESTIMATE (APNews)
“The U.S. economy grew at an annual rate of 4.3% in the
final three months of 2020, slightly faster than previously estimated, as
recovery expectations for 2021 rise along with vaccinations and the provision
of nearly $2 trillion in additional government support.” Story at...
https://apnews.com/article/joe-biden-business-economy-dabc335017b972b306a05638b9f9f4e6
JOBLESS CLAIMS (YahooFinance)
“U.S. states saw a bigger than expected drop in
initial unemployment claims filings last week as claims fell to
a fresh pandemic-era low... Initial jobless claims, week ended March 20: 684,000
vs. 730,000 expected...” Story at...
BANK STOCKS COULD JUMP 45% (Business Insider)
“Bank stocks could jump as much as 45% on various
macroeconomic factors, from a steepening yield curve to attractive relative
valuation that supports the sector's outperformance, according to Morgan
Stanley.” Story at...
My cmt: Goldman Sachs (GS) has been a leader in momentum
in the NTSM analysis of the Dow 30 for some time. I like dividends, so I added JP Morgan (JPM)
instead of Goldman, but either would be a good choice. XLF is in the top three
of ETFs for momentum so that is also a good pick if you believe the article.
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website as
of 6:30pm Thursday. 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
-Thursday the S&P 500 rose
about 0.5% to 3910.
-VIX dropped about 7% to 19.81.
-The yield on the 10-year
Treasury rose to 1.638%.
Is the pullback over? I don’t
know, there weren’t any signs that I saw that would give the answer to the
question. There are a lot of bear-signs in the short-term, but the Long-term
NTSM indicator returned to a BUY signal. Perhaps, that is validating our belief
that the pullback will be relatively small, if it has not already ended. I say “perhaps”
because indicators are not always correct.
Maybe tomorrow we’ll see some more
bullishness that would make me more confident that the pullback is over.
The daily sum of 20 Indicators
improved from -7 to -6 (a positive number is bullish; negatives are bearish);
the 10-day smoothed sum that smooths the daily fluctuations dropped from +23 to
+6 (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 improved to BUY. Price and VIX are bullish; Volume &
Sentiment are neutral.
S&P 500 dropped to within
0.5% of its 50-dMA. Maybe that was enough. I don’t know – most of the
short-term indicators remain bearish. It looks like the Options Boys think the
pullback is over. We’ll see.
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
THURSDAY MARKET INTERNALS
(NYSE DATA)
Market Internals remained NEGATIVE 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.
