“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
“I have always believed the sport of football is an
'all-in' proposition -- if a 100% competitive commitment isn't there, you won't
succeed, and success is what I love so much about our game." – Tom Brady
on his retirement.
My cmt: Brady didn’t start his rookie year. He was hurt his second year and didn’t play
much. He started for 20 years in the NFL,
played in 10 Super Bowls and won 7. Unbelievable!
ADP EMPLOYMENT CHANGE (ADP via prNewswire)
“Private sector employment decreased by 301,000 jobs from
December to January according to the January ADP® National Employment ReportTM..."The labor
market recovery took a step back at the start of 2022 due to the effect of the
Omicron variant and its significant, though likely temporary, impact to job
growth," said Nela Richardson, chief
economist, ADP. "The majority of industry sectors experienced job loss,
marking the most recent decline since December 2020.
Leisure and hospitality saw the largest setback after substantial gains in
fourth quarter 2021, while small businesses were hit hardest by losses, erasing
most of the job gains made in December 2021." Report
at...
EIA CRUDE INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those
in the Strategic Petroleum Reserve) decreased by 1.0 million barrels from the
previous week. At 415.1 million barrels, U.S. crude oil inventories are about
9% below the five-year average for this time of year.” Story at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website as
of 6:30 PM ET 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. I added the smoothed 10-dMA of new cases (in purple) to the
chart.
I think it is time to retire the Covid part of this blog.
I don’t think Covid is affecting the markets and numbers are sharply
falling. If something changes, I’ll
bring it back. This will be the last
Covid chart I do.
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 rose
about 0.9% to 4589.
-VIX rose about 0.6% to 22.09.
-The yield on the 10-year Treasury slipped to 1.779%.
Given that most corrections retest their prior lows, I’ll
keep the pullback stats for a while.
Pullback Data:
Days since top: 21 (Avg= 30 days for corrections <10%;
60 days for larger, non-crash pullbacks)
Drop from Top: Now 4.3%; Max intraday: 12% (Avg.= 13% for
non-crash pullbacks)
The S&P 500 is 3.3% above its 200-dMA & 0.8%
below its 50-dMA.
Retracement from bottom: 56%.
The slope of the 200-dMA is still up.
Yesterday, we got more confirmation that the pullback is
over. I didn’t notice until today that
the up-volume was 82% Monday and 79% Tuesday.
I’ll call that close enough.
Back-to-back 80% up-volume days is another bullish, “correction-over”
indication. In addition, both MACD of price and MACD of Breadth turned bullish
today. I’d be hard pressed to find many bear signs now.
The S&P 500 is now only 0.8% Below its 50-dMA
I mentioned the possibility of a major top yesterday. To
be clear, there is nothing in the charts that says we will have a more
significant correction/crash later this year. My concern is that PEs are high;
inflation is high; and the FED is going to tighten. That is a worrisome list of
problems for the markets. So far there are no signs of a crash – just worries.
Here’s one chart that has to improve if this rally is
going to move significantly higher. The 100-day moving average of the % of
issues advancing on the NYSE must climb above 50% and realistically, continue
higher.
The daily sum of 20 Indicators remained +9 today (a
positive number is bullish; negatives are bearish); the 10-day smoothed sum
that smooths the daily fluctuations improved from -34 to -17 (The trend
direction is more important than the actual number for the 10-day value.) These
numbers sometimes change after I post the blog based on data that comes in
late. Most of these indicators are short-term so they tend to bounce around a
lot.
The Long Term NTSM indicator
ensemble remained BUY. VIX & New-high/New-low numbers are bullish; Price, Volume
& Sentiment are Neutral.
I am bullish. The
S&P 500 now needs to break back above its 50-dMA.
POSITIONS ADDED:
Last week: AAPL; XLE;
Monday: QLD; SPY
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 HOLD.
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 about 65% invested in stocks. This is above my “normal” fully
invested stock-allocation of 50%. I will hold this trading-position for a
while, but it will not be a long-term hold.
I trade about 15-20% of the
total portfolio using the momentum-based analysis I provide here. If I can see
a definitive bottom, I’ll add a lot more stocks to the portfolio using an
S&P 500 ETF.
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.
