“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
“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.
"If I was Darth Vader and I wanted to destroy the US
economy, I would do aggressive spending in the middle of an already hot
economy...This is the biggest bubble I've seen in my career." - Stanley
Druckenmiller, billionaire investor.
“Inflation is not going to be transitory; I’ve been
pretty certain in my mind about three prior calls. This is the fourth one.” -
Mohamed El-Erian, Chief economic adviser at Allianz SE
CONSUMER PRICE INDEX (FOX Business)
“The Labor Department said Wednesday that consumer prices
rose 5.4% year over year in July, matching the prior month's gain as the
fastest since August 2008...Core prices, which exclude food and energy, rose
0.3% month over month and 4.3% annually.”
Story at...
https://www.foxbusiness.com/economy/consumer-price-index-july-2021
EIA CRUDE INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those
in the Strategic Petroleum Reserve) decreased by 0.4 million barrels from the
previous week. At 438.8 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
My cmt: Falling invenetories are bullish for oil and we
note that the Energy ETF (XLE) was up today and is up about 2% over the last
5-days
A TEST OF THE 200-dMA IS COMING (Real Investment Advice)
“The biggest risk for the financial markets remains the
contraction of liquidity fueling the rise in asset prices...Investors are
currently highly leveraged and over-allocated to equity risk. The low
volatility regime of markets has given rise to more extreme levels of
complacency which will fuel a “rush for the exits” when something breaks. For
investors, pay attention to 50-dma. If it is violated with conviction, a test
of the 200-dma will not be far behind.” Commentary at...
https://realinvestmentadvice.com/technically-speaking-a-test-of-the-200-dma-is-coming/
My cmt: The S&P 500 is 11.8% above its 200-dMA and 2.9%
above its 50-dMA.
CHILDREN’S HOSPITAL OVERWHELMED (msn.news)
"The numbers of cases in our hospitals in children
and our children's hospitals are completely overwhelmed," Marty told CNN's
Jim Sciutto on Friday evening. "Our pediatricians, the nursing, the staff
are exhausted, and the children are suffering. And it is absolutely devastating
... our children are very much affected. We've never seen numbers like this
before," she said...Nicklaus Children's Hospital in Miami is at 116%
occupancy for Covid-19 patients.” Story at...
My cmt: It would appear that the Delta variant is
significantly different than the original Covid19.
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website
as of 11:30 PM Wednesday. U.S. total case numbers are on the left axis; daily
numbers are on the right side of the graph in Red with the 10-dMA of daily
numbers in Green.
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 rose about 0.3% to 4448.
-VIX dropped about 4% to 16.06.
-The yield on the 10-year Treasury slipped to 1.351%.
The S&P 500 made another new, all-time high today. 5.5%
of all issues traded on the NYSE made new, 52-week highs today. This is below
average, but not low enough to send a bear signal. I’m watching, but so far,
breadth has been decent as the markets have advanced. This canary in the coal
mine is still chirping.
The daily sum of 20 Indicators remained -1 (a positive
number is bullish; negatives are bearish); the 10-day smoothed sum that smooths
the daily fluctuations improved from -28 to -25. (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
remained HOLD. Volume, VIX, Price & Sentiment are neutral.
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
WEDNESDAY MARKET INTERNALS
(NYSE DATA)
Market Internals slipped 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.
My stock-allocation is about 50%
invested in stocks. I am not super bullish (or bearish) and I am watching the
markets closely.
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.
