Tuesday, August 10, 2021

NFIB Small Business Optimism ... Productivity … Coronavirus (Covid-19) … Stock Market Analysis … ETF Trading … Dow 30 Ranking

“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

 

NFIB SMALL BUSINESS OPTIMISM (Reuters)

“Small business owners across the United States grew less confident in the economic recovery in July as labor shortages remained an issue, according to a survey released on Tuesday.” Story at...

https://www.reuters.com/article/us-usa-economy-small-business/us-small-business-optimism-drops-as-labor-shortages-persist-idUSKBN2FB0UV

 

PRODUCTIVITY (WSJ)

“The Labor Department on Tuesday reported that productivity, as measured by how much the typical worker gets done in an hour, rose at a 2.3% annual rate in the second quarter from the previous quarter, putting it 1.9% above its year-earlier level. That was a significant slowdown from the first quarter, when productivity was up 4.1% from a year earlier...” Story at...

https://www.wsj.com/articles/why-the-productivity-boom-isnt-over-11628615911

 

CORONAVIRUS (NTSM)

Here’s the latest from the COVID19 Johns Hopkins website as of 10:30 PM Tuesday. 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

-Tuesday the S&P 500 rose about 0.1% to 4437.

-VIX rose about 0.4% to 16.79.

-The yield on the 10-year Treasury slipped to 1.355%.

 

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 -34 to -28. (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

 

TUESDAY 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.  

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.