“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.
JOBLESS CLAIMS
U.S. first-time unemployment claims fell much more than
expected last week to reach the lowest level since 1968...Initial jobless claims, week ended April
2: 166,000 vs. 200,000 expected...” Story at...
https://finance.yahoo.com/news/weekly-jobless-claims-week-ended-april-2-2022-174901498.html
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 rose about 0.4% to 4500.
-VIX slipped about 2% to 21.55.
-The yield on the 10-year Treasury was 2.615%.
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: 66 (Avg= 60 days top to bottom for
>10% non-crash pullbacks)
Drop from Top: Now 6.2%. Max at close: 13%
The S&P 500 is 0.2% ABOVE its 200-dMA & 1.7%
ABOVE its 50-dMA.
TODAY’S COMMENT:
The S&P 500 faded near the close, but it was nice to
see the Index close above its 200-dMA. Yesterday’s close was also a positive
sign after testing and bouncing up from the 1 December low.
Today, there was high unchanged volume. Many believe that
this indicator suggests investor confusion at market turning points. Recent
history shows this indicator has indicated a reversal of some kind, either now,
or near future. My problem is that it is frequently a false signal. At this
point if the indicator is sending a decent signal, the direction of reversal
would be up.
As I’ve noted several times, and again Thursday, there
have only been 46 up-days in the last 100 sessions. That usually happens near bottoms so that is
a bullish sign that suggests that the likely general direction will be up from
here, though not straight up.
Today, the daily sum of 20 Indicators declined from -5 to
-7 (a positive number is bullish; negatives are bearish); the 10-day smoothed
sum that smooths the daily fluctuations declined from +64 to 46 (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 remained HOLD: PRICE is Bullish; VOLUME, VIX & SENTIMENT are hold.
Until proven otherwise, I am a cautious Bull in the
near-term.
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
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.
