Thursday, March 11, 2021

Jobless Claims … JOLTS – Job Openings ... Inflation Since 2000 ... The Bull Market is on Shaky Ground ... Coronavirus (Covid-19) … Stock Market Analysis … ETF Trading … Dow 30 Ranking

“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

JOBLESS CLAIMS (CBSnews)

“The number of Americans applying for unemployment benefits fell last week but remains historically high. About 712,000 people filed for jobless aid in the week ended March 6, a drop of 42,000 from the previous week, the Labor Department said Thursday.” Story at...

https://www.cbsnews.com/news/unemployment-jobless-report-2021-03-11/

 

JOLTS JOB OPENINGS (Advisor Perspectives)

“The number of job openings changed little at 6.9 million on the last business day of January, the U.S. Bureau of Labor Statistics reported today. Hires were little changed at 5.3 million while total separations decreased to 5.3 million. Within separations, the quits rate and layoffs and discharges rate changed little at 2.3 percent and 1.2 percent, respectively.” Commentary and charts at...

https://www.advisorperspectives.com/dshort/updates/2021/03/11/job-openings-labor-turnover-january-2020-update-annual-revisions-made

 

INFLATION SINCE 2000 (Advisor Perspectives)

Chart and discussion at...

https://www.advisorperspectives.com/dshort/updates/2021/03/11/inflation-an-x-ray-view-of-the-components

 

THE BULL MARKET IS ON SHAKY GROUND (Real Investment Advice)

“...we continue to hold slightly higher levels of cash and continue to focus on basic risk management controls...While “bearish” concerns are often dismissed when markets are rising, it does not mean they aren’t valid. Unfortunately, by the time the “herd” is alerted to a shift in overall sentiment, the stampede for the exits will already be well underway. Is the current bull market dead? I don’t know, and trying to predict the market is quite pointless. The risk for investors is the “willful blindness of change” until it is far too late to matter. Just remember, no one thought the “bull market was dead” in 1999 and 2007 either.” – Lance Roberts. Commentary at... 

https://realinvestmentadvice.com/technically-speaking-the-bull-market-is-on-shaky-ground/

 

CORONAVIRUS (NTSM)

Here’s the latest from the COVID19 Johns Hopkins website as of 6:00pm 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

-Thursday the S&P 500 rose about 1% to 3939.

-VIX fell about 3% to 21.91.

-The yield on the 10-year Treasury rose to 1.538%.

 

Today, we completed a bounce from a 4.2% pullback to all-time highs in 5 days. Woo-woo. It looks like we may be clear to make 4100 before we hit the top trend line. Today’s advance was broad with 15.6% of stocks making all-time highs on the NYSE. This is quite different than the advance during the dot.com bubble that was very narrow at the top. The % of stocks advancing may narrow out as the market goes higher, but for now, breadth looks good.    

 

The daily sum of 20 Indicators jumped from +4 to +11 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations improved from -14 to +4 (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 Volume are bullish; Sentiment & VIX are 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. 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

 

THURSDAY MARKET INTERNALS (NYSE DATA)

Market Internals improved to BULLISH 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.

 

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.

 

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.