“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
"This imaginary person out there - Mr. Market - he's
kind of a drunken psycho. Some days he gets very enthused, some days he gets
very depressed. And when he gets really enthused, you sell to him and if he
gets depressed you buy from him. There's no moral taint attached to that."
- Warren
Buffett
“The big money is not in the buying and selling. But in the
waiting.” - Charlie Munger, Vice Chairman, Berkshire Hathaway
CHICAGO PMI (Advisor Perspectives)
“The Chicago Business Barometer, produced with MNI, rose
to 36.6 in June with business activity picking up as Covid-19 related shutdowns
eased somewhat. Across Q2, business sentiment slipped 11.8 points to 34.8,
hitting the lowest level since Q1 2009.” Commentary and analysis at…
CONSUMER CONFIDENCE (Reuters)
“U.S. consumer confidence rebounded in June as businesses
reopened, strengthening views that the economic downturn was likely over,
though rising COVID-19 infections threaten to derail the budding recovery.”
Story at…
APOCALYPSE NEVER (Environmental Progress.org)
“On behalf of environmentalists everywhere, I would like
to formally apologize for the climate scare we created over the last 30 years.
Climate change is happening. It’s just not the end of the world. It’s not even
our most serious environmental problem.
Here are some facts few people know:
-Humans are not causing a “sixth mass extinction”
-The Amazon is not “the lungs of the world”
-Climate change is not making natural disasters worse
-Fires have declined 25% around the world since 2003
-The amount of land we use for meat — humankind’s biggest
use of land — has declined by an area nearly as large as Alaska
-The build-up of wood fuel and more houses near forests,
not climate change, explain why there are more, and more dangerous, fires in
Australia and California
-Carbon emissions are declining in most rich nations and
have been declining in Britain, Germany, and France since the mid-1970s
-Netherlands became rich not poor while adapting to life
below sea level
-We produce 25% more food than we need and food surpluses
will continue to rise as the world gets hotter
-Habitat loss and the direct killing of wild animals are
bigger threats to species than climate change
-Wood fuel is far worse for people and wildlife than fossil
fuels
-Preventing future pandemics requires more not less
“industrial” agriculture
I know that the above facts will sound like “climate
denialism” to many people. But that just shows the power of climate alarmism…
until last year, I mostly avoided speaking out against the climate scare.
Partly that’s because I was embarrassed. After all, I am as guilty of alarmism
as any other environmentalist. For years, I referred to climate change as an “existential”
threat to human civilization, and called it a “crisis.”
But mostly I was scared. I remained quiet about the
climate disinformation campaign because I was afraid of losing friends and
funding.” Michael Shellenberger. Commentary at…
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website
as of 9:00 PM Tuesday. Over the last week, new cases have been growing faster
than they were in April. There were about 41,000 new cases today, about 2000
more than yesterday. The steepening curve
is the graphic indication that new-cases are growing at a dramatically faster
rate than we have seen at any time in the US.
While we may not completely shut-down again, it seems
likely to suppress the economic recovery.
MARKET REPORT / ANALYSIS
The daily sum of 20 Indicators declined from -1 to
-3 (a positive number is bullish; negatives are bearish). The 10-day smoothed
sum that smooths the daily fluctuations declined from -38 to -46 (These
numbers sometimes change after I post the blog based on data that comes in
late.) Most of these indicators are short-term.
*For additional background on the ETF ranking system see
NTSM Page at…
-Tuesday the S&P 500 rose about 1.5% to 3100.
-VIX dipped about 4% to 30.43.
(VIX is now lower than the day-by-day comparison to the 2009 recovery after the
March 2009 bottom. This tends to support the argument that we have seen the
final bottom of this correction.)
-The yield on the 10-year Treasury rose to 0.668%.
Over the last 2 weeks, only 46% of stocks on the NYSE
have advanced. With back-to-back days up around 1.5%, I would have expected
higher numbers. The chart below suggests a possible down-trend shown by the Blue
down-sloping lines. If the Index can
break above the blue, upper, down-sloping line it would be a signal that we are
not in a downtrend. The Index is still below the lower trend line shown in red
and that is cause for alarm to the Bulls.
My Long-term indicator remained HOLD today; the
Short-Term Indicator remained Neutral. Since Indicators are not yet giving a
short-term Buy-signal, I am still under-invested. I’ll increase stock holdings if we see some
additional improvement in signals, especially the MACD & Money Trend
indicators.
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.
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…
TUESDAY MARKET INTERNALS (NYSE DATA)
Market Internals remained
NEUTRAL 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 40% invested in
stocks. You may wish to have a higher or lower % invested in stocks depending
on your risk tolerance. 40% is a conservative position that I re-evaluate
daily.
As a retiree, 50% in the stock market is about fully
invested for me – it is a cautious and conservative number. If I feel very
confident, I might go to 60%; had we seen a successful retest of the bottom,
80% would not have been out of the question.
