“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
“Socialism is the philosophy of failure, the creed of
ignorance, and the gospel of envy.” - Winston Churchill
EIA CRUDE INVENTORIES (OilPrice.com)
“Crude oil prices inched higher on Wednesday morning
after the Energy Information Administration reported an
inventory build of 500,000 barrels for the week to February 21.” Story at…
NEW HOME SALES (MarketWatch)
“Sales of newly-constructed homes in the U.S. soared 7.9%
on a monthly basis in January to a seasonally-adjusted annual rate of
764,000, the
government reported Wednesday.
That figure represents the highest pace of new home sales
since July 2007…” Story at…
CRITICAL THINKING HAS NEVER BEEN MORE IMPORTANT (LIBERTY
BLITZKRIEG)
“By ensuring “the resistance” to Trump revolved around
some invented intelligence agency narrative, the power structure was able to
prevent large numbers of people from talking about anything real or significant
for four years straight. Although it didn’t remove Trump from office, it
successfully reduced hitherto thoughtful people into emotionally broken mental
midgets.
This is the reason the exact same tactic was just
unrolled against Bernie Sanders, with Jeff Bezos’ Washington Post reporting the day before the Nevada caucuses that Russia
is also supposedly helping Sanders. It’s ridiculous, but you have to understand
the strategy here. If Sanders can’t be prevented from winning the nomination,
the establishment needs a plan B, and that plan appears to be Russiagate all
over again. These people aren’t very creative.” Michael Krieger, Editor of
Liberty Blitzkrieg.
My cmt: Saunders is so far out of the mainstream that I
expect the media to go all out to stop him. It will be interesting. Do the
media types appreciate that Socialism has not been kind to reporters in the
past?
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 dropped about 0.4% to 3116.
-VIX dipped about 1% to 27.56.
-The yield on the 10-year Treasury fell to 1.319.
Bollinger Bands and RSI are both still giving oversold
buy-signals. Today was the fifth down-day in a row. We saw back-to-back,
down-days of 3% and 3.4% on Monday and Tuesday. In Oct 2018, the market bounced
up after 2 similar back-to-back drops.
That bounce lasted about 4 days before selling picked up again. We should
see a bounce Thursday, but the pullback is not likely to be over. (I thought
the same thing yesterday; but we were down again.)
Overall, the daily sum of 20 Indicators remained a
bearish -12 (a positive number is bullish; negatives are bearish). The 10-day
smoothed sum that negates the daily fluctuations declined from -31 to -45.
(These numbers sometimes change after I post the blog based on data that comes
in late.) Most of these indicators are short-term.
As of today, the Index is 8% off of its recent high. The
“average” correction has been 12% since 2009. In the past 15 years or so,
corrections greater than 10% have lasted 68 days top to bottom; those less than
10% have lasted 35 days. We’re at day 5.
Some support levels follow:
4 December low: 3093
Current S&P 500 200-day Moving Average: 3046
8 October low: 2893
A buying opportunity is pretty far off (time-wise), based on prior
lengths of pullbacks, but the S&P 500 may be closer to a bottom than the
top.
TOP / BOTTOM INDICATOR SCALE OF 1 TO 10 (Zero is a
neutral reading.)
Today’s Reading: +2
Most Recent Day with a value other than Zero: +2 on 26
February. (Bollinger Bands and RSI were bullish.)
(1) +10 Max Bullish / -10 Max Bearish)
(2) -4 or below is a Sell sign. +4 or higher is a Buy
Sign.
MOMENTUM ANALYSIS:
CAUTION: Momentum is not a good tool during market
declines.
TODAY’S RANKING OF
15 ETFs (Ranked Daily)
*For additional background on the ETF ranking system see
NTSM Page at…
TODAY’S 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…
WEDNESDAY MARKET INTERNALS (NYSE DATA)
Market Internals
remained NEGATIVE on the market.
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. In 2014, using these internals alone would
have made a 9% return vs. 13% for the S&P 500 (in on Positive, out on
Negative – no shorting).
Using the Short-term indicator in 2018 in SPY would have
made a 5% gain instead of a 6% loss for buy-and-hold. The methodology was Buy
on a POSITIVE indication and Sell on a NEGATIVE indication and stay out until
the next POSITIVE indication. The back-test included 13-buys and 13-sells, or a
trade every 2-weeks on average.
My current stock allocation is about 45% invested in
stocks as of 27 January (down from 60%). This is a conservative position
appropriate for a retiree based on an overstretched S&P 500. You may wish
to have a higher or lower % invested in stocks depending on your risk
tolerance.
INTERMEDIATE / LONG-TERM INDICATOR
Wednesday, the VOLUME, VIX, PRICE and PANIC Indicators
gave bear signals; The SENTIMENT Indicator was neutral. The Long-Term Indicator remained SELL. If you
wish to reduce equity exposure, sell on a bounce upward. Perhaps a bounce will
start tomorrow. There is a risk is that
stocks continue to fall in a waterfall slide downward. If that happens, it may be best to ride it
out. If the averages are to be believed, we may not be too far from a bottom.
