“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 [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 PR NewsWire)
“Private sector employment increased by 978,000 jobs from
April to May according to the May ADP® National Employment Report™..."Private payrolls
showed a marked improvement from recent months and the strongest gain since the
early days of the recovery," said Nela
Richardson, chief economist, ADP. "While goods producers grew at a
steady pace, it is service providers that accounted for the lion's share of the
gains, far outpacing the monthly average in the last six months. Companies of
all sizes experienced an uptick in job growth, reflecting the improving nature
of the panemic and economy." Press release at...
JOBLESS CLAIMS (APnews)
“The number of Americans seeking unemployment benefits
fell last week for a fifth straight week to a new pandemic low, the latest
evidence that the U.S. job market is regaining its health as the economy
further reopens. The Labor Department reported Thursday that jobless claims
dropped to 385,000...” Story at...
ISM NON-MANUFACTURING INDEX (ISM vis PRnewswire)
“Economic activity in the manufacturing sector grew
in May, with the overall economy notching a 12th consecutive
month of growth, say the nation's supply executives in the latest Manufacturing
ISM® Report On Business®..."The May Manufacturing PMI® registered
61.2 percent, an increase of 0.5 percentage point from the April reading of
60.7 percent. This figure indicates expansion in the overall economy for the
12th month in a row after contraction in April 2020.”
Press release at...
EIA CRUDE OIL INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those
in the Strategic Petroleum Reserve) decreased by 5.1 million barrels from the
previous week. At 479.3 million barrels, U.S. crude oil inventories are about
3% below the five year average for this time of year.” Press release at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website as
of 6:45pmThursday. 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 slipped
about 0.4% to 4193. (The market seems to have trouble with that 4200 number.)
-VIX rose about 3% to 18.04.
-The yield on the 10-year
Treasury rose to 1.625%.
I expected the S&P 500 to jump higher to catch up to
the % of issues advancing on the NYSE. Instead, everything dropped, and the
small caps dropped more then the large
caps. So the leveling of the playing field did happen, but it was not in the
direction I expected. Still, there aren’t too many bear signs so I won’t worry too
much, yet. (I always worry some.)
The daily sum of 20 Indicators declined from +7 to +3 (a
positive number is bullish; negatives are bearish); the 10-day smoothed sum
that smooths the daily fluctuations rose from +15 to +24. (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 is Bullish; Volume, VIX, & Sentiment are
neutral.
I am bullish until we see more
bearish signs.
I increased stock allocation
in the portfolio to a fully-invested, 50% in stocks, last week. I am not super
bullish, but I am not bearish either so 50% is a more reasonable allocation
than being under-invested.
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 remained 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 25 May, my
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 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.
