“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.
“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.
PERSONAL SPENDING / INCOME (fxstreet)
“Personal Income in the US rose by 0.5% MoM in
February whist Personal Spending rose by 0.2%, the latest data release
by the Bureau of
Economic Analysis and Department of Commerce showed on
Thursday. The latter thus came in in line with the expected gain of 0.5%
MoM, while the former came in lower versus the expected MoM gain of 0.5%.” Story
at...
PCE PRICES (BEA)
“The PCE
price index for February increased 6.4 percent from one
year ago, reflecting increases in both goods and services...Energy prices
increased 25.7 percent while food prices increased 8.0 percent. Excluding food
and energy, the PCE price index for February increased 5.4 percent from one
year ago.” Story at...
https://www.bea.gov/news/2022/personal-income-and-outlays-february-2022
JOBLESS CLAIMS (Yahoo Finance)
“Initial unemployment claims rose modestly after reaching
a 50-year low as employers continue to show reluctance in reducing their
workforces in the current competitive labor market...Initial jobless claims, week ended March
26: 202,000 vs. 196,000 expected...” Story at...
https://finance.yahoo.com/news/weekly-jobless-claims-week-ended-march-26-2022-192349945.html
CHICAGO PMI (MarketPulse)
“Chicago PMI came in better-than-expected at 62.9, a beat
of the 57.0 estimate and 56.3 prior reading. The Chicago PMI was a nice rebound
and provides some optimism away from all the doom and gloom from slowdowns and
runaway inflation.” Story at...
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 dropped about 1.6% to 4530.
-VIX rose about 6% to 20.56.
-The yield on the 10-year Treasury rose to 2.363%.
I think the correction is over, but not everyone agrees
so I’ll keep the pullback data for a while longer.
PULLBACK DATA:
If the correction has ended:
-Drop from Top: 13% (Avg.= 13% for non-crash pullbacks)
-Days from Top to Bottom: 48-days. (Avg= 30 days top to
bottom for corrections <10%; 60 days top to bottom for larger, non-crash
pullbacks)
Currently:
Days since top: 61 (Avg= 30 days top to bottom for
corrections <10%; 60 days top to bottom for larger, non-crash pullbacks)
Drop from Top: Now 5.5%. Max at close: 13%
The S&P 500 is 1% ABOVE its 200-dMA & 2.7% ABOVE
its 50-dMA.
TODAY’S COMMENT:
Man, that is a nasty looking close on today’s chart. Let’s hope that negativism doesn’t carry over to Friday. It is the last day of the quarter so there may be a lot of buying and selling associated with positioning for the future – so called window dressing. For that reason, today’s action may not be representative.
Today was a distribution day. Investopedia says, “’Distribution
days’ is a term related to distribution stock in the sense that heavy
institutional selling of shares is taking place. A distribution day,
technically speaking, occurs when major market indexes fall 0.2% or more on
volume that is higher than the previous trading day. A string of these days
together is called distribution days and is often associated with signs of a
market top.” Discussion at...
One Distribution Day alone doesn’t signal anything. We’d
need to see more than 5 in 5-weeks, or less, before I’d be concerned. This may
be another sign of end-of-quarter adjusting.
Today was a statistically significant down-day. That just
means that the price-volume move exceeded my statistical parameters. Statistics
show that a statistically-significant, down-day is followed by an up-day about
60% of the time. So perhaps Friday will be more bullish.
The 40-dMA of new-highs is improving. It suggests that, for now, the overall trend in the stock market is still up.
The daily sum of 20 Indicators remained +5 (a positive
number is bullish; negatives are bearish); the 10-day smoothed sum that smooths
the daily fluctuations declined from +128 to +122 (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: PRICE & VOLUME, are Bullish; VIX & SENTIMENT are
hold.
I am a Bull, but I’ll be quick to reduce stock holdings
if indicators warrant it.
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
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)
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 60% invested in stocks. This is above 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.
