“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
“People always ask me what is going on in the markets. It
is simple. Greatest Speculative Bubble of All Time in All Things. By two orders
of magnitude.” – Michael “Big Short” Burry.
“I never imagined that I would see the day that the
Chairman of the House Judiciary Committee would step forward to call for raw [Supreme]
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.
ADP EMPLOYMENT CHANGE (ADP via prnewswire)
“Private sector employment increased by 692,000 jobs from May to June according to the June ADP® National Employment Report™...The report, which is derived from ADP's actual payroll data, measures the change in total nonfarm private employment each month on a seasonally-adjusted basis... "The labor market recovery remains robust, with June closing out a strong second quarter of jobs growth," said Nela Richardson, chief economist, ADP. "While payrolls are still nearly 7 million short of pre-COVID-19 levels, job gains have totaled about 3 million since the beginning of 2021. Service providers, the hardest hit sector, continue to do the heavy lifting, with leisure and hospitality posting the strongest gain as businesses begin to reopen to full capacity across the country." Press release at...
CHICAGO PMI (Sharecast.com)
“Economic activity in the Chicago area unexpectedly deteriorated in June, according to data released on Wednesday. The MNI Chicago business barometer fell to 66.1 from 75.2 in May...” Story at...
https://www.sharecast.com/news/international-economic/chicago-pmi-falls-in-june--8022326.html
EIA CRUDE INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those
in the Strategic Petroleum Reserve) decreased by 6.7 million barrels from the
previous week. At 452.3 million barrels, U.S. crude oil inventories are about
6% below the five year average for this time of year.” Press release at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf
This report is bullish for oil.
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website as
of 7:00 PM 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. Numbers
are trending somewhat higher. Let’s hope that doesn’t continue.
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500
rose about 0.1% to 4298.
-VIX slipped about 1% to 15.83.
-The yield on the 10-year
Treasury slipped to 1.469%.
OK...XLE and Boeing were up
today - Good. We saw a nice bullish close as the S&P 500 made a new
all-time high. 6.1% of issues on the NYSE made new-highs today and that’s about
average when the Index makes a new-high.
That’s good too.
The daily sum of 20 Indicators improved from zero to +4
(a positive number is bullish; negatives are bearish); the 10-day smoothed sum
that smooths the daily fluctuations improved from -40 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.
The Long Term NTSM indicator
ensemble remained HOLD. Price, Volume, VIX & Sentiment are neutral.
There is currently only 1
top-indicator warning of a top; the Index is stretched too far ahead of its
200-dMA, but just barely.
There have been 4 up-days in a row so we are due for a down-day tomorrow. 7 out of the last 10 days have been up-days while 12 out of the last 20 have been up. That’s elevated, but not bearish yet.
Overall, signs look more bullish so that is good news.
I remain cautiously 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
GS is still in the top 3 so I
still own it. American Express and Nike look good too.
WEDNESDAY MARKET INTERNALS
(NYSE DATA)
Market Internals finally turned BULLISH on the market. It’s been 3 weeks since they were bullish
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 25 May, my
stock-allocation is about 50% invested in stocks. I am not super bullish and I
am watching the markets closely. For now, 50% is a reasonable allocation for
me.
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.
