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“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
“Far
more money has been lost by investors in preparing for corrections, or
anticipating corrections, than has been lost in the corrections themselves.” -
Peter Lynch, former manager of Fidelity’s Magellan® fund.
"One thing that we've heard is that a lot of the
tariff impact to date has actually not shown up in the numbers yet. There's
been a lot of front-running, building inventories and all those sorts of
things. And we are hearing from an increasing number of businesses that those
strategies ... are starting to run their course...If these pre-tariff
strategies have run their course, we're about to see some changes in prices,
and then we're going to learn how consumers are going to respond to that."
– Raphael Bostic, Atlanta Fed Chair at the Atlanta Fed conference in Florida.
“Billionaire investor Ray Dalio on Thursday
sounded another alarm on soaring U.S. debt and deficits, saying it should make
investors fearful of the government bond market. ‘I think we should be afraid
of the bond market,’ Dalio said at an event for the Paley Media Council in
New York. ‘It's like ... I'm a doctor, and I'm looking at the patient, and I've
said, you're having this accumulation, and I can tell you that this is very,
very serious, and I can't tell you the exact time. I would say that if we're really
looking over the next three years, to give or take a year or two, that we're in
that type of a critical, critical situation.’" Story at...
Ray
Dalio says to fear the bond market as deficit becomes critical
“Randy Flowers, senior portfolio manager at Intelligent
Wealth Solutions, believes bond yields could keep a lid on stocks for the
foreseeable future. It’s one reason he expects the U.S. market to remain
rangebound in 2025. “I think bond investors are back in control of the market,
at least in the short term right now. When that happens, that’s usually bad
news for everybody involved, including equity markets,” Flowers said. “We’ll
see if it continues.” Story at...
This
chart shows why investors should be worried about the latest bond-market
selloff
HOME SALES (Nat’l Assoc of realtors)
“Existing-home sales slid 0.5% in April to a seasonally
adjusted annual rate of 4.00 million. Sales retreated 2.0% from one year ago.”
Story at...
https://www.nar.realtor/newsroom/existing-home-sales-edged-lower-by-0-5-in-april
MARKET REPORT / ANALYSIS
-Friday the S&P 500 declined about 0.7% to 5803.
-VIX rose about 10% to 22.29.
-The yield on the 10-year Treasury declined to 4.509%
(compared to about this time prior market day).
MY TRADING POSITIONS:
None
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
Today, of the 50-Indicators
I track, 7 gave Bear-signs and 13 were Bullish. The rest are neutral. (It is
normal to have a lot of neutral indicators since many of the indicators are top
or bottom indicators that will signal only at extremes.)
TODAY’S COMMENT
The daily, bull-bear spread of 50-indicators improved, to
a slightly bullish +6 (6 more Bull indicators than Bear indicators) I consider +5
to -5 the neutral zone. The 10-dMA of the spread remained down – a bearish sign.
A couple of important bear-signs follow: Utilities are
outperforming the S&P 500; the Smart Money Indicator (based on late-day
action) is bearish; The 10-dMA of Issues advancing on the NYSE (breadth) is now
below 50% indicating that less than half of the issues on the NYSE have been up
over the last 2-weeks.
Repeating yesterday’s comment:
A drop to the lower trend line would put the S&P 500
somewhere around 5600. If this decline continues - and I don’t know if it will
– a significant break below that 5600 zone would signal a likely retest of the
April lows. That has been one of the reasons I am being very conservative now.
A return to the April lows has always been a possibility. Still, given the
strong signals we got during the rally up from the low (Zweig Breadth Thrust;
90% up-volume day; broken downtrend in the charts), a drop to the April lows
probably has a less than 50% chance.
If Trump keeps up his antics, who knows? The Politicians
could still pull a bear market out of the hat.
BOTTOM LINE
I am neutral, but worried. Let’s see where the indicators
go.
ETF - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily) ETF ranking
follows:
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
DOW STOCKS - TODAY’S MOMENTUM RANKING
OF THE DOW 30 STOCKS (Ranked Daily)
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 FRIDAY MARKET INTERNALS (NYSE
DATA)
My basket of Market Internals slipped to SELL. (My basket of Market
Internals is a decent trend-following analysis that is most useful when it
diverges from the Index.)
My current invested position
is about 40% stocks, including stock mutual funds and ETFs. 50% invested in
stocks is a normal, conservative position. (75% is my max stock allocation when
I am confident that markets will continue higher; 30% in stocks is my Bear
market position.)
I trade about 15-20% of the total portfolio using the
momentum-based analysis I provide here. When I see bullish signs, I add a lot more
stocks to the portfolio, usually by using an S&P 500 ETF as I did back in
October 2022 and 2023.
