“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
“American troops cannot and should not be fighting in a
war and dying in a war that Afghan forces are not willing to fight for
themselves.”- President Joe Biden.
“Their soldiers fought and died in very substantial
numbers. It’s way over 60,000 dead. Roughly 27 times as many Afghans died
fighting for their country as did Americans.” – General David Petraeus, Retired.
EXISTING HOME SALES (National Association of Realtors)
“-Existing-home sales rose 2% on a seasonally adjusted
annual rate from June to July, with no sales declines showing in any regions.
-The inventory of unsold homes increased 7.3% to 1.32
million from June to July – equivalent to 2.6 months of the monthly sales pace.
-The median existing-home sales price rose at a
year-over-year pace of 17.8%.” Press release at...
https://www.nar.realtor/newsroom/existing-home-sales-climb-2-0-in-july
IHS FLASH COMPOSITE PMI (Markit Economics)
“Private sector companies across the U.S. signalled a
further strong upturn in business activity during August, however, the pace of
growth slowed to an eight-month low. Capacity pressures, material shortages and
the spread of the Delta variant reportedly weighed on the output expansion...The expansion slowed sharply again in August as the spread of the Delta
variant led to a weakening of demand growth, especially for consumer-facing
services, and further frustrated firms’ efforts to meet existing sales...Not
only have supply chain delays hit a new survey record high, but the August
survey saw increasing frustrations in relation to hiring.” Press release at...
https://www.markiteconomics.com/Public/Home/PressRelease/2ebf3c08ba874510879b6b2976cc98c4
S&P 500 HASN’T FALLEN 5% FROM A PEAK IN NEARLY 200
SESSIONS (MarketWatch)
“Friday marked the 200th session without a drawdown of 5%
or more from a recent peak, making the current stretch of levitation the
longest such since 2016, when the market went 404 sessions without falling by
at least 5% peak to trough...It is extremely rare for the market to enjoy such
a period of relative effervescence. Indeed, such lengthy stretches without a 5%
pullback or better have occurred on only eight occasions in the S&P 500
index...” Story at...
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website as
of 5:30 PM Monday. 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
-Monday the S&P 500 rose about 0.9% to 4480.
-VIX fell about 8% to 17.15.
-The yield on the 10-year Treasury slipped to 1.252%.
The S&P 500 almost made a new high today, but it
couldn’t hold it at the close and drifted down slightly below the old high of
4479.71. That’s less than a point below
the prior high 4479.53, so essentially, the Index made a double top today. Now it needs to power higher to convince us
that this weakness is over. It may happen, but bearish signs are still in
place.
Monday, there was another Hindenburg Omen. While price
has marched higher, the internals still look weak.
Today was another statistically significant up-day. That
just means that the price-volume move exceeded my statistical parameters.
Statistics show that a statistically-significant, up-day is followed by a
down-day about 60% of the time. I said yesterday’s action could have been a
dead-cat-bounce. I didn’t see anything today that would prove or disprove that
comment.
Looking at the Friday rundown of some important
indicators, only 2 bearish signs switched to bull signs Monday:
(1) The smoothed advancing volume on the NYSE is rising.
(2) 55% of the 15-ETFs that I track have been up over the
last 10-days.
A new total run-down of some important indicators is still
quite bearish (14-bear signs vs. 4-bull signs). These indicators tend to be
both long-term and short-term, so they are somewhat different than the 20 that
I report on daily.
The daily sum of 20 Indicators improved from -10 to -8 (a
positive number is bullish; negatives are bearish); the 10-day smoothed sum
that smooths the daily fluctuations slipped from -56 to -63. (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. The VIX indicator improved. Price, Volume, VIX &
Sentiment indicators are neutral.
It still looks like we’re
going to have a pullback of some kind. In the recent past, the S&P 500 has
not broken thru its 50-dMA. The S&P 500 is 2.8% above its 50-dMA. I’m a
little more bearish, but I think the drop will probably less than 10% down. As
always, there are no guarantees (the market could always just power higher) –
Mr. Market doesn’t read my blog.
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 improved 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 45%
invested in stocks. I am bearish and watching the markets and indicators
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.
