“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.
FACTORY ORDERS (Reuters)
"New orders for U.S.-made goods fell in February, likely
weighed down by unseasonably cold weather, though manufacturing remains strong
as the economic recovery regains steam amid an improving public health
situation and massive fiscal stimulus... The Commerce Department said on Monday
that factory orders dropped 0.8%...” Story at...
ISM NON-MANUFACTURING (ISM via PrNewswire)
"The Services PMI® registered an all-time high
of 63.7 percent, 8.4 percentage points higher than the February reading of 55.3
percent. The previous high was in October 2018,
when the Services PMI® registered 60.9 percent. The March reading
indicates the 10th straight month of growth for the services sector, which has
expanded for all but two of the last 134 months." Press release at...
MARKIT SERVICES PMI (Advisor Perspectives)
“The March US Services Purchasing Managers' Index
conducted by Markit came in at 59.7 percent, down 0.1 from the final February
estimate of 59.8... Commenting on the latest survey results, Chris Williamson,
Chief Business Economist at IHS Markit, said: "The recent surge in service
sector growth shows no sign of abating, with another impressive performance in
March rounding off a quarter in which the PMI surveys indicate that the economy
grew at an annualized rate of approximately 5%.” Commentary and analysis at...
AMERICANS WILL SPEND RECENT STIMULUS CHECK (Raymond
James)
“The cover story for 2021 has been the better
and quicker than expected economic recovery, but aggressive fiscal stimulus and
accommodative monetary policy have been two key features in
support of economic growth. Congress’ passage of a $1.9 trillion Rescue deal
with potential plans for an infrastructure package later this year, combined
with the Federal Reserve’s (Fed) reassurance that interest rates will be on
hold through 2023 have contributed to consensus 2021 GDP estimates rising from
4.0% to 5.1% since the beginning of the year...”
Commentary at...
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website as
of 8:15pm 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 rose
about 1.4% to 4078.
-VIX rose about 3% to 17.91.
-The yield on the 10-year
Treasury dipped to 1.696%.
The S&P 500 made another
new-high today and the % of new-highs on the NYSE was well above average which
is good. Breadth remained good with the % of issues advancing on the NYSE now over
54% for the last 10-days.
If the S&P 500 is going straight
up to 4100, I expect to see the Index go higher still.
Bollinger Bands were
overbought today; RSI is a long way from overbought so, for now, I’ll ignore
the Bollinger Band warning.
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. Statistically-significant, up-days almost
always coincide with tops, but not all statistically-significant, up-days occur
at tops. It doesn’t look like the Bull is over yet.
The daily sum of 20 Indicators
dipped from +8 to +7 (a positive number is bullish; negatives are bearish); the
10-day smoothed sum that smooths the daily fluctuations improved from -19 to -11
(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.
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
MONDAY 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.
