“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.
HERITAGE CAPITAL COMMENTARY (Heritage Capital)
“As has been my theme since late April, stocks remain
mired in a trading range which is not the worst thing in the world after such a
meteoric rise. Index leadership has been schizophrenic and more challenging to
trade...I did lighten up on our energy services position after the big move as
it was our largest sector position. Part of that money went to buying more
banks with a new pilot position in healthcare.” Paul Schatz, President,
Heritage Capital. Commentary at...
https://investfortomorrow.com/blog/may-employment-report-is-unusually-important/
My cmt:
-I’m hanging on to my position on the XLE-Energy ETF.
Momentum still looks good and the dividend is 4%. Year to date the XLE is
outperforming the S&P 500 by more
than 3x.
-I am holding the XLF-Financials ETF and Goldman Sachs
(GS) to play financials. Year to date Goldman Sachs is outperforming the
S&P 500 by nearly 4x.
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website as
of 5:15 PM 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 slipped
about 0.1% to 4227.
-VIX was unchanged at 16.42.
-The yield on the 10-year
Treasury rose to 1.573%.
Repeating a comment from
Friday: The chart does not look great to me. It has not progressed much in the
last 3-weeks and a statistically significant up-day near the top is always a
concern. Still, the indicators are mostly bullish so I’ll remain a cautious
bull.
3 top-signals remain; (1) The
Index is too far ahead of breadth. (2) The Index is too far ahead of its
200-dMA. (3) Money trend is too far ahead of the S&P 500. These are
concerning, but not enough to call a top.
The daily sum of 20 Indicators improved from +7 to +10 (a
positive number is bullish; negatives are bearish); the 10-day smoothed sum
that smooths the daily fluctuations rose from +35 to +50. (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.
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 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. I am not super bullish, but I am not bearish
either so 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.
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.
