“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
“The big money is not in the buying and selling. But in the
waiting.” - Charlie Munger, Vice Chairman, Berkshire Hathaway
EXISTING HOME SALES (CNBC)
“Sales of existing homes rose 2.4%...Sales were 10.5%
higher compared with August 2019. This is the highest sales pace since December
2006, before the Great Recession.” Story at...
BEARS IN CHARGE (Heritage Capital)
“Several folks have asked if I had any price levels to
watch for the bottom. Look at the chart below. I added those two blue,
horizontal lines to show the general range I am looking at right now on the
S&P 500. I know; that’s a wide range, but until I see more data that’s all
I have.” PaulSchatz, President, Heritage Capital.
Commentary at...
https://investfortomorrow.com/blog/sell-rosh-hashanah-buy-yom-kippur-bears-in-charge/
My cmt: The lower line is the 200-dMA.
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website at
6:30 Tuesday. 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. New cases are
now trending HIGHER.
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 rose about 1.1% to 3315.
-VIX dipped about 3% to 26.86.
-The yield on the 10-year Treasury rose to 0.676%.
Prior to today we had seen 4 straight down-days in the
S&P 500 so we were due for a positive day Tuesday.
As of today, the S&P 500 is down 7.4% from its
all-time high. This is day 13 of the correction. The average time from top to
bottom for a correction is 35-days for corrections less than 10% and 68-days
for bigger corrections. The 200-dMA is now 3105, 6.8% lower than today’s close.
The daily sum of 20 Indicators slipped from -5 to +4 (a
positive number is bullish; negatives are bearish). The 10-day smoothed sum
that smooths the daily fluctuations declined from -49 to -35. (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.
The Long Term NTSM indicator ensemble improved to HOLD. The
Price Indicator is bearish. All other indicators in the ensemble are hold.
I’ve been looking for market internals to improve while
the S&P 500 makes a lower low. So far
we’ve had 5 lower-lows with declining internals. This suggests we will go
lower.
I remain bearish.
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…
http://navigatethestockmarket.blogspot.com/p/exchange-traded-funds-etf-ranking.html
TODAY’S 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.
For more details, see NTSM Page at…
https://navigatethestockmarket.blogspot.com/p/a-system-for-trading-dow-30-stocks-my_8.html
TUESDAY MARKET INTERNALS (NYSE DATA)
Market Internals improved
to 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.
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 conservative position that I re-evaluate daily,
but it is appropriate for the correction.
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%; if this correction is deep enough, 80% would not be
out of the question.
