“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' (BLS) Consumer Price
Index (CPI) rose 8.5% in March compared to the same month last year, according
to the latest report released Tuesday. That marked the fastest rise since
December 1981. This followed a 7.9% annual increase in February. Heading into
the report, consensus economists were looking for an 8.4% jump for March,
according to Bloomberg data.” Story at...
https://finance.yahoo.com/news/consumer-price-index-cpi-inflation-march-2022-123202319.html
MARKET REPORT / ANALYSIS
Tuesday the S&P 500 dipped about 0.3% to 4397.
-VIX rose about 1% to 24.66.
-The yield on the 10-year Treasury rose to 2.777%.
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:
If the correction has not ended:
Days since top: 69 (Avg= 60 days top to bottom for
>10% non-crash pullbacks)
Drop from Top: Now 8.3%. Max at close: 13%
The S&P 500 is 2.1% BELOW its 200-dMA & 0.6%
BELOW its 50-dMA.
*We can’t call the end of the correction until the
S&P 50 makes a new high.
TODAY’S COMMENT:
Things were looking up in the morning, but there weren’t
enough buyers to keep the S&P in positive territory. Any bullish signs
vanished as the day wore on to a disappointing, but not surprising, close. The oversold/overbought ratio is oversold, so
that could bring a short-term bounce Wednesday or Thursday. I still don’t have
any bottom-indicators that would suggest that we have made a bottom for this
recent decline. Neither RSI nor Bollinger Bands are oversold, so we may still
have more decline ahead before we can be optimistic.
The 50-dMA of advancing issue on the NYSE is still below
50% (as it has been for 84 consecutive
sessions) and I usually consider more than 3 sessions below 50% to be a “correction-now”
sign. The 100-dMA isn’t much better and it still hasn’t broken out of its
downward channel.
Today, the daily sum of 20 Indicators improved from -7 to
-6 (a positive number is bullish; negatives are bearish); the 10-day smoothed
sum that smooths the daily fluctuations declined from +6 to -16 (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 20 indicators are short-term so they tend to bounce
around a lot.
The Long Term NTSM indicator
ensemble is mixed, but remained HOLD: PRICE & VIX are Bullish; VOLUME is
bearish; SENTIMENT is hold.
The McClellan Oscillator was
negative today and the Fosback Hi-Lo Logic Index remained sell. Markets tried to
affect a “Turning Tuesday” (a turn to the upside), but failed.
I am leaning bearish, but maybe not a full-blown Bear yet,
perhaps because the markets tried to reverse Tuesday. Maybe they’ll turn up tomorrow? If not, I guess
I’ll need to be a bear. Indicators remain very 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.
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.
https://navigatethestockmarket.blogspot.com/p/a-system-for-trading-dow-30-stocks-my_8.html
TUESDAY 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 45% 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.
