“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.
FOMC MINUTES (CNBC)
“Federal Reserve officials talked tapering at their most
recent meeting, but few seemed in a rush to get the process going, according to
minutes released Wednesday... the prevailing mindset was that there should be
no rush and markets must be well prepared for any shifts.” Story at...
https://www.cnbc.com/2021/07/07/federal-reserve-releases-minutes-of-its-june-15-16-meeting.html
JOLTS JOB OPENINGS (Reuters)
“U.S. workers can afford to be pickier. The number
of job openings rose
to just above 9.2 million in May and there is now a position available for
every unemployed person, according to U.S. Labor Department data released on
Wednesday read
more . The vacancies-to-jobless ratio has recovered to
pre-pandemic levels...” Story at...
https://www.reuters.com/breakingviews/us-job-vacancy-numbers-are-jolt-employers-2021-07-07/
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website as
of 8:15 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.
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 rose about 0.3% to 4358.
-VIX declined about 1% to 16.20.
-The yield on the 10-year Treasury slipped to 1.311%.
Up volume has been falling
over the last several sessions. The 10-dMA of up-volume has slipped to 49%
today, indicating that less than half of the volume has been up over the last 2
weeks. This needs to turn around or we’ll
see some trouble in the markets.
The McClellan Oscillator is
negative. My analysis of breadth (Breadth MACD) is also bearish, but its
methodology is not that much different than the McClellan Oscillator. Both of
these indicators look at the issues advancing on the NYSE and compare moving
averages.
Bottom line: There are some bearish
signs, but not enough to worry yet.
The daily sum of 20 Indicators dipped from +3 to -2 (a
positive number is bullish; negatives are bearish); the 10-day smoothed sum
that smooths the daily fluctuations improved from +2 to +9. (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. Volume is bullish; Price, 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.
I’m 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
WEDNESDAY 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 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.
