"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
WEEKLY INVESTMENT STRATEGY (Raymond James)
“This week [ending 29 Aug], the S&P 500 hit all-time
highs. Despite negative earnings growth, a record breaking 82% of companies
beat 2Q earnings estimates and helped lift the equity market. Momentum and an
earnings recovery is likely to support additional records into 2021, especially
as the potential for record S&P 500 earnings (>$161.25 needed) in 2021
grows.” Commentary at…
CNN – YOU GOTTA LOVE EM
CNN – Communist Nonsense Network
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website
at 5:55 Monday. Total US numbers are on the left axis; daily numbers are on the
right side of the graph with the 10-dMA of daily numbers in Green.
MARKET REPORT / ANALYSIS
For more details, see NTSM Page at…
Market Internals
remained NEUTRAL on the market.
-Monday the S&P 500 slipped about 0.2% to 3500.
-VIX rose about 15% to 26.41.
-The yield on the 10-year Treasury rose to 0.711%.
Big-time bear signals remain that suggest a pullback, but
perhaps not a full-fledged bear-market.
-The S&P 500 remained 13.8% above its 200-dMA. Values
in the 10-15% range are sell-signal.
-Once again, the narrowness of the advance is confirmed. Only
2.6% of all issues traded on the NYSE made new, 52-week highs when the S&P
500 made a new, INTRA-DAY, all-time-high, Monday. All of the recent new-highs
have shown an extremely narrow advance with minimal participation by issues
other than a few big tech names. Very bearish.
-There have been 16 up-days over the last 20 days – a very
bearish sign.
-We’ve seen 9 up-days over the last 10-days – a bearish sign.
-RSI remained overbought.
The daily sum of 20 Indicators declined from +4 to zero
(a positive number is bullish; negatives are bearish). The 10-day smoothed sum
that smooths the daily fluctuations declined from +2 to +1. (These numbers
sometimes change after I post the blog based on data that comes in late.) Most
of these indicators are short-term and many are trend following, i.e., they are
not top-indicators, so they are not as bearish as one might expect.
I remain bearish in the short and intermediate term. I
have a very small Short-position.
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.
*For additional background on the ETF ranking system see
NTSM Page at…
TODAY’S RANKING OF THE DOW 30 STOCKS (Ranked Daily)
“The Dow welcomed three new components: Honeywell (HON), Salesforce (CRM) and Amgen (AMGN).
And it said goodbye to ExxonMobil (XOM), Pfizer (PFE) and Raytheon (RTN).”
Story at…
Here’s the revised DOW 30 and its momentum analysis. We
note that Salesforce (CRM) is outpacing Apple in momentum. The top ranked stock
receives 100%. The rest are then ranked based on their momentum relative to the
leading stock.
MONDAY 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.
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 30% invested in
stocks. You may wish to have a higher or lower % invested in stocks depending
on your risk tolerance. 30% is a very conservative position that I
re-evaluate daily. The XLE has been a loser for me since I was too early. It is
still yielding over 10%, so I have to remind myself to be patient.
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.
