“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.
“Scientists are noticing that in the past 25 years the
world seems to be getting more La Ninas than it used to and that is just the
opposite of what their best computer model simulations say should be happening
with human-caused climate change...Together El Nino, La Nina and the neutral
condition are called ENSO, which stands for El Nino Southern Oscillation, and
they have one of the largest natural effects on climate...” Associated Press
Article at...
https://www.voanews.com/a/weather-s-unwanted-guest-nasty-la-nina-keeps-popping-up/6593576.html
The computers can’t even predict conditions that are “one
of the largest natural effects on climate”. That’s the problem with climate
science. There is little doubt that
humans have caused a 1-degree centigrade increase in temperature over the last
100 years; the problem is that the doomsday predictions pushed by the media are
based on computer simulations that can’t accurately replicate the past let
alone predict the future.
https://michaelpramirez.com/index.html
JOBLESS CLAIMS (YahooFinance)
“The weekly unemployment claims report from the Labor
Department on Thursday, the most timely data on the economy's health, also
showed state jobless benefits rolls declining to their lowest level since 1969
in the second-half of May..."Job gains across the country are slowing, but
few workers are actually losing their jobs," said Christopher Rupkey,
chief economist at FWDBONDS in New York.” Story at...
https://finance.yahoo.com/news/u-jobless-claims-drop-layoffs-124252129.html
FACTORY ORDERS (Fox Business)
“U.S. factory orders decelerated in April, climbing less
than expected amid persistent disruptions in the global supply chain – even as
consumer demand for goods remained strong. The Commerce Department said on
Thursday that factory orders rose 0.3% in April...a big decline from March,
when factory orders rose by 1.8%.” Story at...
https://www.foxbusiness.com/economy/factory-orders-slowed-markedly-in-april-climbing-just-0-3
EIA CRUDE INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those
in the Strategic Petroleum Reserve) decreased by 5.1 million barrels from the
previous week. At 414.7 million barrels, U.S. crude oil inventories are about
15% below the five-year average for this time of year.” Story at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 rose about 1.8% to 4177.
-VIX slipped about 4% to 24.72.
-The yield on the 10-year Treasury rose a bit to 2.917%.
PULLBACK DATA:
-Drop from Top: 14.5% as of today. 18.7% max. (Avg.= 13%
for non-crash pullbacks)
-Days from Top to Bottom: 104-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 6.2% BELOW its 200-dMA & 1.9 %
BELOW its 50-dMA.
*I won’t call the correction over until the S&P 500
makes a new-high; however, we hope to be able to call the bottom when we see
it...and...we did call the market a trading “Buy” one day after the recent
trading-bottom on 12 May (a little early).
MY TRADING POSITIONS:
XLE
DOW
TODAY’S COMMENT:
The Index broke above its upper trend-line so my concerns
were unfounded. We saw more bullish signs.
There was a Breadth Thrust today. This is a technical indicator that basically
says that the number of issues advancing on the NYSE improved a lot in a hurry.
It is very bullish.
There was bad news today as Brainard said that the FED
does not expect to pause rate hikes in September. The markets went up. That’s a bullish sign, too, when markets rise
in the face of bad news.
There were three consecutive 80% up-volume days last week
and that is very bullish, too.
Given that indicators look good, I will get back in the
market Friday with UWM and SSO as trades. These are both leveraged ETFs so they
are not conservative issues and markets needs to be watched closely. It is still my general belief that we are in
a bear market rally, but there are many who say that the current weakness is
just a normal decline in the 2nd term of a President. It could be, so
I will follow the indicators – right now, except for a few outliers, they are
bullish.
Today, the daily sum of 20 Indicators improved from +7 to
+12 (a positive number is bullish; negatives are bearish); the 10-day smoothed
sum that smooths the daily fluctuations improved from +78 to +93. (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.
LONG-TERM INDICATOR: The Long
Term NTSM indicator improved to BUY Thursday:
SENTIMENT & VOLUME are
bullish; VIX and PRICE are hold. In addition, there was an extremely bullish
Breadth Thrust signal.
I am Bullish in the short-term and Bearish longer-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 roughly 35% invested in stocks. This is below my “normal”
fully invested stock-allocation of 50%. I plan to increase to about 45%-50%
Friday unless we see extreme moves in the market, either way.
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.
