“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
“Faced with a combination of record speculative extremes
and deteriorating speculative conditions, investors may want to remember that
the best time to panic is before everyone else does.” – John Hussman, Phd.
CPI (Yahoo Finance)
“The Bureau of Labor Statistics' Consumer Price Index
(CPI) rose 7.9% in February compared to last year, marking the fastest annual
jump since 1982. This took out January's
previous 40-year high rate of 7.5%, and matched consensus economist
expectations, according to Bloomberg data.” Story at...
https://finance.yahoo.com/news/consumer-price-index-cpi-inflation-february-2022-203614415.html
JOBLESS CLAIMS (Kitco News)
“Thursday, the U.S.
Labor Department said that weekly jobless claims rose by 11,000 to 227,000...The
latest labor market data missed expectations. According to consensus forecasts,
economists were expecting to see jobless claims hold steady around 220,000.”
Story at...
https://www.kitco.com/news/2022-03-10/U-S-Weekly-jobless-claims-rise-by-11K.html
UTILITIES CONTINUE TO OUTPERFORM THE S&P 500 – BEARISH (NTSM)
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 dipped about 0.4% to 4260.
-VIX dipped about 7% to 30.23.
-The yield on the 10-year Treasury rose to 1.9945%.
Pullback Data:
Days since top: 46 (Avg= 30 days top to bottom for
corrections <10%; 60 days top to bottom for larger, non-crash pullbacks)
Drop from Top: Now 11.2% at close. Max at close: 13%
(Avg.= 13% for non-crash pullbacks)
The S&P 500 is 4.6% below its 200-dMA & 5.1%
below its 50-dMA.
The slope of the 200-dMA is up, but only by a whisker.
(The S&P 500 isn’t there yet, but a falling 200-dMA is very bearish.)
The S&P 500 is headed for a bearish “Death Cross” when
the 50-dMA will drop below the 200-dMA. That will probably occur in a week or
two.
TODAY’S COMMENT:
I took a trading position in SDS-ETF (2xShort the S&P
500) today. It looks like there is more downside to come. Even if the war in Ukraine
ends, we still have inflation; the Fed; high PE’s and according to some, falling
earnings. Further, technicals say there’s more to go in the correction, too. As
I’ve been saying, we still haven’t seen a high-volume washout yet, so the
correction is not over.
We got a little bounce in the afternoon today, but the
S&P 500 couldn’t get back to even after the weak open.
The daily sum of 20 Indicators dropped from +9 to +8 (a
positive number is bullish; negatives are bearish); the 10-day smoothed sum
that smooths the daily fluctuations improved from +49 to +61 (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. Long-term indicators improved too.
The Long Term NTSM indicator
ensemble declined back to SELL. VOLUME & VIX are bearish; SENTIMENT is neutral. PRICE is bullish. The Sell-signal isn’t
meaningful now. It is telling us market
conditions are poor, as if we didn’t already know. The important sell-signal was 8 days after
the start of this correction.
Until we see more bullish signs, I remain bearish.
BEST ETFs - 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
TRADING POSITIONS: I ‘m still
holding the XLE-ETF (Energy).
BEST DOW STOCKS - TODAY’S MOMENTUM
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
THURSDAY MARKET INTERNALS
(NYSE DATA)
My basket of Market Internals remained BUY on the big move up yesterday.
I can’t say that I’d trade this 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.
My stock-allocation in the
portfolio is now about 35% invested in stocks. This is below my “normal” fully
invested stock-allocation of 50%.
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.
