“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
WHY TRUMP REALLY LOST WISCONSIN (WSJ-Letters)
“As our Sen. Ron Johnson stated, ‘The only reason
Trump lost Wisconsin is 51,000 Republican voters didn’t vote for him. They
voted for other Republican candidates.’ Recounts and court rulings have
confirmed that President Biden won Wisconsin by fewer than 21,000 votes. It was
those Republicans who split their tickets, voting for GOP state and
congressional candidates, but against Mr. Trump, that caused his defeat in Wisconsin.”
WSJ Letter to editor at...
https://www.wsj.com/articles/why-trump-really-lost-wisconsin-2020-johnson-11644361776
My cmt: This is just more evidence that the election
wasn’t stolen from Trump - he pissed it away himself.
It should be clear that Trump’s antics after the election
won’t get these lost Wisconsin Republicans back. Wisconsin was one of 5 states
Trump won in 2016 that turned against him in 2020.
THIS TIME IS DIFFERENT (Real Investment Advice)
“The Fed has a tough challenge ahead of them with very
few options. While increasing interest rates may
not “initially” impact asset prices or the economy, it is a far
different story to suggest that they won’t. There have been absolutely
ZERO times in history the Federal Reserve began an interest-rate hiking
campaign that did not eventually lead to a negative outcome.” Commentary at...
https://realinvestmentadvice.com/this-time-is-different-the-feds-next-minsky-moment/
UNIV OF MICHIGAN SENTIMENT (Univ of Michigan)
“Sentiment continued its downward descent, reaching its
worst level in a decade, falling a stunning 8.2% from last month and 19.7% from
last February. The recent declines have been driven by weakening personal
financial prospects, largely due to rising inflation, less confidence in the
government's economic policies, and the least favorable long term economic
outlook in a decade. Importantly, the entire February decline was among
households with incomes of $100,000 or more; their Sentiment Index fell by
16.1% from last month, and 27.5% from last year.” Report at...
MARKET REPORT / ANALYSIS
-Friday the S&P 500 fell about 1.9% to 4419.
-VIX jumped about 14% to 27.36.
-The yield on the 10-year Treasury slipped to 1.943%.
Given that most corrections retest their prior lows, I’ll
keep the pullback stats for a while.
Pullback Data:
Days since top: 28 (Avg= 30 days for corrections <10%;
60 days for larger, non-crash pullbacks)
Drop from Top: Now 7.9%; Max closing: 9.8%; Max intraday:
12% (Avg.= 13% for non-crash pullbacks)
The S&P 500 is 0.7% BELOW its 200-dMA & 4.1%
below its 50-dMA.
Max Retracement from bottom: 56% 2 Feb.
The slope of the 200-dMA is up, but not by much.
The Friday run-down of some important indicators declined
from last week to (12-bear and 7-bull). These indicators tend to be both
long-term and short-term, so they are different than the 20 that I report on
daily. Details follow:
BULL SIGNS
-The 10-dMA % of issues advancing on the NYSE
(Breadth) is above 50%.
-MACD of the percentage of issues advancing on the NYSE
(breadth) made a bullish crossover 2 February.
-MACD of S&P 500 price made a bullish crossover, 2
February.
-Smoothed Buying Pressure minus Selling Pressure is
reversing higher.
-My Money Trend indicator is rising.
-Short-term new-high/new-low data is rising.
-59% of the 15-ETFs that I track have been up over the
last 10-days.
NEUTRAL
-There have been 5 Statistically-Significant days (big
moves in price-volume) in the last 15-days. Neutral.
-The S&P 500 is -0.7% above its 200-dMA (Bear
indicator is +12%.). This value was 15.9% above the 200-dMA when the 10%
correction occurred in Sep 2020. (Bigger bottoms are formed when the Index is
at, or below, the 200-dMA.)
-The S&P 500 has had 1 Distribution Day, Thursday,
but it takes more to send a signal.
-Bollinger Bands.
-RSI
-Overbought/Oversold Index (Advance/Decline Ratio)
-31 January, the 52-week, New-high/new-low ratio improved
by 0.5 standard deviations - Neutral
-There was a Hindenburg Omen signal on 10 January. It has been cancelled because the McClellan
Oscillator turned positive.
-The size of up-moves has been smaller than the size of
down-moves over the last month, but not enough to send a signal.
-The S&P 500 Index is OK when compared to the issues
advancing on the NYSE (Breadth).
-Non-crash Sentiment indicator is too high (94%-bulls on
a 5-day basis), but not enough to give a sell signal. (Too bullish is bearish.)
Sentiment has gone up a lot recently.
-No 90% up or down days.
-The Fosback High-Low Logic Index is neutral, but has
moved toward bear territory.
-There have been 9 up-days over the last 20 sessions.
-There have been 6 up-days over the last 10 sessions.
-The Calm-before-the-Storm/Panic Indicator.
-2.8% of all issues traded on the NYSE made new, 52-week
highs when the S&P 500 made a new all-time-high, 3 January. (There is no
bullish signal for this indicator.) This indicates that the advance is too
narrow and a correction from here is likely to be >10%. Looks like this
indicator was correct. - Expired
BEAR SIGNS
-The smoothed advancing volume on the NYSE is falling.
-The 50-dMA % of issues advancing on the NYSE (Breadth)
is below 50%.
-The 100-dMA % of issues advancing on the NYSE
(Breadth) is below 50%
-The 50-dMA % of issues advancing on the NYSE (Breadth)
has been below 50% for 43 consecutive days. (3 days in a row is my bear signal)
-VIX is rising sharply.
-Cyclical Industrials (XLI-ETF) are under-performing the
S&P 500 in the short-term.
-Slope of the 40-dMA of New-highs is down. This is one of
my favorite trend indicators.
-The Smart Money (late-day action) is bearish. (This
indicator is based on the Smart Money Indicator developed by Don Hayes).
-The 5-10-20 Timer System is SELL; the 5-dEMA and 10-dEMA
are both BELOW the 20-dEMA.
-McClellan Oscillator.
-Long-term new-high/new-low data is falling.
-The S&P 500 is under-performing the Utilities
ETF (XLU) over the last 40 sessions.
On Friday, 21 February, 2 days after the top before the
Coronavirus pullback, there were 10 bear-signs and 1 bull-sign. Now there
are 12 bear-signs and 7 bull-signs. Last week, there were 10 bear-signs and
10 bull-signs.
The daily sum of 20 Indicators declined from +5 to -3 (a
positive number is bullish; negatives are bearish); the 10-day smoothed sum
that smooths the daily fluctuations remained +43 (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 to HOLD. VIX is bearish; Volume, Price & Sentiment are
Neutral.
I happened to be considering whether to sell my Apple
position around 1:30 when it started falling.
I sold Apple as the entire market fell all afternoon. It looks like the
S&P 500 will test its prior low of 4327. The waterfall decline is usually
the low. My guess is that the low will hold (more or less) and we will see
markets move up from there. We’ll see. Russia
or China may change everything.
POSITIONS ADDED:
Wednesday, 26 January: AAPL; XLE;
Monday, 31 January: QLD; SPY
POSITIONS SOLD:
QLD, 10 February.
APPL, 11 February
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
FRIDAY MARKET INTERNALS (NYSE
DATA)
Market Internals declined to 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.
