“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
IHS MARKET MANUFACTURING PMI (Trading Economics)
“The IHS Markit US Manufacturing PMI was revised slightly
higher to 58.6 in February of 2021 from a preliminary of 58.5 and compared to
59.2 in January. The reading pointed to a marked upturn in the health of the US
manufacturing sector.” Story at...
https://tradingeconomics.com/united-states/manufacturing-pmi
ISM MANUFACTURING PMI (ISM)
“The February Manufacturing PMI® registered 60.8
percent, an increase of 2.1 percentage points from the January reading of 58.7
percent. This figure indicates expansion in the overall economy for the ninth
month in a row after contraction in March, April, and May.” Press release at...
CONSTRUCTION SPENDING (Reuters)
“The Commerce Department said on Monday that construction
spending increased 1.7% to $1.521 trillion, the highest level since the
government started tracking the series in 2002.” Story at...
https://www.reuters.com/article/us-usa-economy-construction-idUSKBN2AT2TO
SUGAR RUSH! WHY THE ECONOMY WILL RUN HOT, THEN CRASH
(Real Investment Advice)
“The expected “sugar rush” from more stimulus is why the
economy will “run hot” then crash... Ultimately, the Federal
Reserve, and the Administration, will have to face hard choices to extricate
the economy from the current “liquidity trap.” However, history shows that
political leadership never makes hard choices until those choices get forced
upon them. Most telling is the current economists’ inability, who maintain our
monetary and fiscal policies, to realize the problem of trying
to “cure a debt problem with more debt.” – Lance Roberts, Chief Portfolio
Strategist/Economist for RIA Advisors. Commentary at...
https://realinvestmentadvice.com/sugar-rush-why-the-economy-will-run-hot-then-crash/
My cmt: We are headed for a crash. Will it be this fall? Will
it be next year? Either are possible. For now, I think we will see further
advances. Like the dot.com crash of 2000, the party will be over when the FED becomes
more negative.
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website
as of 6:00pm Monday. 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
-Monday the S&P 500 fell
about 2.4% to 3902.
-VIX dropped about 16% to 23.35.
-The yield on the 10-year
Treasury rose to 1.426%.
Today was a Strong up-day that verified our suspicion that
Friday was the end of the pullback. Friday looked a lot like 29 January, the
last time the Index dipped to the 50-dMA. The markets bounced strongly higher
then. We got the same action today as the markets bounced up from the 50-dMA. Today,
83% of the volume was up-volume; 80% of the stocks on the NYSE were up; the
spread in new-highs vs new-lows was +193 (It was -8 Friday.); VIX dropped 16%. That
looks like a good confirmation to me.
The daily sum of 20 Indicators improved from -8 to -4 (a
positive number is bullish; negatives are bearish); the 10-day smoothed sum
that smooths the daily fluctuations dipped from -36 to -43 (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 HOLD. Sentiment, Volume & VIX are neutral; & Price is bullish.
Today was a statistically significant up-day. That just means that the price-volume move exceeded my statistical parameters. Statistics show that a statistically-significant, up-day is followed by a down-day about 60% of the time.;
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 dropped to NEGATIVE ON the market. (The indicator is based
on moving averages; we’ll need to see if this indicator improves soon. For now,
I am ignoring it.)
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 50% 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 a retiree.
The markets have not
retested the lows on recent corrections. 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.
