“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.
“I never imagined that I would see the day that the
Chairman of the House Judiciary Committee would step forward to call for raw
court packing. It is a sign of our current political environment where rage
overwhelms reason.” - Professor Jonathan Turley, honorary Doctorate of Law from
John Marshall Law School for his contributions to civil liberties and the
public interest.
JOBLESS CLAIMS (CNBC)
“The U.S. employment picture improved sharply last week,
with first-time claims for unemployment insurance dipping below 500,000 for the
first time since the pandemic crisis. Initial claims totaled 498,000 for the
week ended May 1...” Story at...
https://www.cnbc.com/2021/05/06/weekly-jobless-claims.html
PRODUCTIVITY (Reuters)
“U.S. worker productivity rebounded in the first quarter,
depressing labor costs growth, but the data has been severely distorted by the
COVID-19 pandemic...The Labor Department said on Thursday that nonfarm
productivity, which measures hourly output per worker, increased at a 5.4%
annualized rate last quarter.” Story at...
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website as
of 5:00pm 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 0.8% to 4202 2202.
-VIX slipped about 4% to 18.39.
-The yield on the 10-year
Treasury dipped to 1.568%.
Today, we had very high,
unchanged-volume. In theory this in an
indication that investors are confused and it can signal a reversal, in this
case down. I’ve tried to develop an indicator based on this without much
success. Sometimes it’s true; sometimes
not.
The daily sum of 20 Indicators
declined from +1 to -1 (a positive number is bullish; negatives are bearish);
the 10-day smoothed sum that smooths the daily fluctuations improved from +33
to +36 (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.
Today was a statistically
significant up-day. That just means that the price-volume move exceeded my
statistical parameters. Data shows that a statistically-significant, up-day is
followed by a down-day about 60% of the time.
The Long Term NTSM indicator
ensemble remained BUY. Price & VIX are bullish; Volume & Sentiment are
neutral. This indicator can be slow to turn.
Pullback? I still think one is coming, but the indicators
show a mostly neutral playing field. Indicators aren’t very strong in any
direction. It would seem likely that until indicators change, or we see more consistently
negative price-action, the slow melt-up will continue.
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 declined to 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 19 April, my
stock-allocation is about 40% invested in stocks. I hadn’t intended to drop
this low, but I took profits in both Boeing and Intel due to their dropping out
of the top 3 in momentum. I’ll move back in when conditions appear more
favorable.
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.
