“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
NEW HIGHS BUT HIGH YIELD BONDS NOT ALONG FOR THE RIDE
(Heritage Capital)
“...Junk bonds [JNK] should be stronger. Prices should be
near the old highs. This canary is usually early but it rarely misses finding
issues. If high yield bonds don’t get their act together this quarter that
could spell trouble for the stock market in 2022.
https://investfortomorrow.com/blog/new-highs-new-highs-new-highs-but-junk-not-along-for-the-ride/
A DAY LATE AND A DOLLAR SHORT (Real Investment Advice)
“An honest review of history shows the Fed is
consistently a “day late
and a dollar short” regarding monetary policy. With the market
trading at historical extremes, it is clear the Fed is about to make another
policy mistake... Don Kohn [Fed’s former vice chair for financial supervision]
explicitly noted the Fed’s mention of “notable” vulnerabilities in
the financial system. With asset values at historical highs, and record levels
of financial debt, the concerns are valid... The problem for the Fed is they
are always a “day late
and a dollar short.” Where the Fed repeats its mistake is keeping
monetary policy accommodative for too long.” Commentary at...
https://realinvestmentadvice.com/a-day-late-a-dollar-short-the-feds-coming-policy-mistake/
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website as
of 6:30 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. I added the smoothed 10-dMA of new cases (in purple) to the chart.
I noted that almost 15% of the entire US population has
had Covid. Actually, that counts only those who went to a doctor. The actual number is at least twice as high
due to mild cases and those asymptomatic. We can probably safely say that at
least one-third of the US population has had Covid.
MARKET REPORT / ANALYSIS
-Monday the S&P 500 rose about 0.5% to 4566.
-VIX dipped about 1% to 15.24.
-The yield on the 10-year Treasury was little changed at
1.635%.
6.3% of issues on the NYSE made new, 52-week highs at today’s
all-time high for the S&P 500. That’s
slightly below average, but not an issue. This is actually an improvement from
Thursday’s new all-time high and shows decent breadth at the new high.
RSI is overbought, but otherwise, there are no topping
indicators at this time. One indicator is not enough to get concerned about.
The Friday run-down of some important indicators was
well to the bull side (3-bear and 15-bull). I wouldn't bet against that stat.
The daily sum of 20 Indicators slipped from +1 to zero (a
positive number is bullish; negatives are bearish); the 10-day smoothed sum
that smooths the daily fluctuations improved from +44 to +49 (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 switched to HOLD. Volume is bullish; Sentiment, Price and VIX
indicators are neutral.
I remain 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
MONDAY MARKET INTERNALS (NYSE
DATA)
Market Internals remained NEUTRAL.
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.
My stock-allocation in the
portfolio is now about 65% invested in stocks; this is above my “normal” fully
invested stock-allocation of 50% stocks. Indicators are very bullish, so I am
holding a short-term position in additional Index Funds to boost returns.
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 general rule, some
suggest that the % of portfolio invested in the stock market should be one’s
age subtracted from 100. So, a
30-year-old person would have 70% of the portfolio in stocks, stock mutual
funds and/or stock ETFs. That’s ok, but
for older investors, I usually don’t recommend keeping less than 50% invested
in stocks (as a fully invested position) since most people need some growth in
the portfolio to keep up with inflation.
