“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.
EIA CRUDE INVENTORIES
U.S. commercial crude oil inventories (excluding those in
the Strategic Petroleum Reserve) increased by 0.7 million barrels from the
previous week. At 414.4 million barrels, U.S. crude oil inventories are about
16% below the five-year average for this time of year.” Report at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf
CRASH IMMINENT (TheStreet)
“If the last tweet by American hedge fund investor
Michael Burry is any indication, it looks like the stock market is headed for a
grim period. Burry, who featured in Michael Lewis' book "The Big
Short" for correctly predicting that the housing market would crash in
2005, recently tweeted, "At least I tried." Story at...
Michael
'Big Short' Burry Hints at Imminent Market Crash in Last Tweet - TheStreet
PEASE, NO OPERATION WARP SPEED FOR GREEN ENERGY (WSJ)
“Unlike the production and distribution of pills,
replacing over 3,000 fossil-fuel power plants and millions of internal-combustion
vehicles would require thousands of new factories, and cost trillions of
dollars. It also will take at least a few generations. Put simply, there is no
vaccine, moonshot or atom bomb for alternative energy. We should stop thinking
in those terms and approach energy and climate policy modestly: doing R&D
(some of it subsidized) and moving not at warp speed, but cautiously, given
that “green” energy has environmental and health impacts. Whatever we start
will have some negative consequences. We’ll need time to decide if the benefits
are large enough to continue.” - Em. Prof. Peter Z. Grossman, Butler University,
Indianapolis. Commentary at...
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 rose about 0.2% to 4184.
-VIX slipped about 6% to 31.52.
-The yield on the 10-year Treasury rose to 2.834%.
PULLBACK DATA:
-Drop from Top: 12.8% as of today. 13% max. (Avg.= 13%
for non-crash pullbacks)
-Days from Top to Bottom: 79-days. (Avg= 30 days top to
bottom for corrections <10%; 60 days top to bottom for larger, non-crash
pullbacks)
The S&P 500 is 6.9% BELOW its 200-dMA & 4.8%
BELOW its 50-dMA.
*We can’t call the end of the correction until the
S&P 500 makes a new high. Tuesday, the S&P 500 tested its prior low.
The correction has not ended.
TODAY’S COMMENT:
As I posted earlier today, I was leaning in the direction
of “correction-over” and even took a trading position in QLD. Unfortunately, today’s action in the markets
was not very bullish. I turned my QLD position into a day-trade and sold it at a small
loss.
Today, the daily sum of 20 Indicators improved from -4 to
-3 (a positive number is bullish; negatives are bearish); the 10-day smoothed
sum that smooths the daily fluctuations improved from -18 to -15. (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 turned
to SELL: VOLUME & PRICE are bearish; VIX & SENTIMENT are hold.
The length of this correction could mean that it will go
much lower to match up with previous long corrections – say 20%? This isn’t a
prediction – just a worry. Only time
will tell...
My short one-day trial as a Bull didn’t work out so I am
a Bear again!
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
WEDNESDAY 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 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.
