I SWITCHED TO THE OLD BLOGGER SYSTEM FOR THE PAST FEW
WEEKS. NOW THAT OPTION IS GONE. I NEED
TO FIND SOME WORK-AROUNDS OR A NEW BLOG HOST. THIS “IMPROVEMENT” IS A MESS! IF THE BLOG LOOKS BAD (EXTRA SPACES; DIFFERENT
FONTS; UNSIZED GRAPHICS) ALL I CAN SAY IS, I’M WORKING ON IT.
IT HAS TAKEN NUMEROUS EDITS TO FIX PROBLEMS AND THAT
MAKES FIXES LOOK LIKE NEW POSTS TO FOLLOWERS...SORRY ABOUT THAT.
“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
LEADING ECONOMIC INDICATORS (Conference Board)
“The Conference Board Leading Economic Index® (LEI)
for the U.S. increased 1.2 percent in August to 106.5 (2016 = 100), following a
2.0 percent increase in July and a 3.1 percent increase in June. “While
the US LEI increased again in August, the slowing pace of improvement suggests
that this summer’s economic rebound may be losing steam heading into the final
stretch of 2020,” said Ataman Ozyildirim, Senior Director of Economic Research
at The Conference Board. “Despite the improvement, the LEI remains in recession
territory, still 4.7 percent below its February level. Weakening in new orders
for capital goods, residential construction, consumers’ outlook, and financial
conditions point to increasing downside risks to the economic recovery. Looking
ahead to 2021, the LEI suggests that the US economy will start the new year
under substantially weakened economic conditions.” Press release at...
https://www.conference-board.org/data/bcicountry.cfm?cid=1
UNIV OF MICHIGAN SENTIMENT (Reuters)
“U.S. consumer sentiment improved in early September,
according to a survey on Friday, which also showed the upcoming November
presidential election was starting to have an impact on expectations about
future economic prospects. The University of Michigan said its consumer
sentiment index rose to 78.9 in the first half of this month...” Story at...
WILL THE BEARS JOIN THE PARTY? (Heritage Capital)
“As you know, I have been a bit worried about stocks in
the short-term. The market is not behaving well. The Fab Five Plus mega tech stocks
look worse and it looks like there is more downside ahead unless the bulls
immediately make me wrong and rally 3-5%. Tech looks like it has at least
another 4-6% on the downside, however, the longer tech go hold on without
breaching last week’s lows, the less the decline should be.” – Paul
Schatz, President heritage Capital.
Commentary at...
https://investfortomorrow.com/blog/fed-day-will-bears-join-the-party/
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website
at 6:10 Friday. 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. There is a
worrisome trend in the numbers: they are now trending HIGHER.
MARKET REPORT / ANALYSIS
-Friday the S&P 500 dropped about 1.1% to 3319.
-VIX dropped about 1% to 25.83. (I can’t really exlain
why the VIX fell aling with the S&P 500. I imagine it is an anomaly related
to Options Expiration.)
-The yield on the 10-year Treasury rose to 0.701%.
We saw Very high volume today on the NYSE since Options
expire tomorrow. We also had another Distribution Day.
“A Distribution day” is a term related
to distribution stock in the sense that heavy institutional selling
of shares is taking place. A distribution day, technically speaking,
occurs when major market indexes fall 0.2% or more on volume that is higher
than the previous trading day.” From Investopedia at…
More than 5 Distribution Days in 3 weeks is considered a
sell-signal. Today was the 6th.
Apple is down 16% since 26 August.
Here’s the Friday run-down of some important indicators.
These tend to be both long-term and short-term so they are somewhat different
than the 20 that I report on daily.
BULL SIGNS
-MACD of stocks advancing on the NYSE (breadth) made a bullish
crossover 16 Sept. (I have a love hate relationship with this indicator – not sure
if I believe it now.)
-The 50-dMA and the
100-dMA of the % of stocks advancing on the NYSE (Breadth) are above 50%.
-Cyclical Industrials (XLI-ETF) are outperforming the
S&P 500.
-The smoothed advancing volume on the NYSE is moving
higher.
-The S&P 500 is still outperforming the Utilities ETF
(XLU).
NEUTRAL
-Statistically, the S&P 500 gave a panic-signal, 3 September.
A panic signal usually suggests more to come.
(This signal remains in effect for 7-trading days.)
-Overbought/Oversold Index, a measure of advance-decline
data is neutral.
-Non-crash Sentiment indicator remains neutral.
-The Fosback High-Low Logic Index is neutral.
-There have been 8 up-days over the last 20 days. Neutral
-We’ve seen 4 up-days over the last 10-days. Neutral
-Bollinger Bands – close to bearish, but still neutral.
-Breadth on the NYSE vs the S&P 500 index is neutral.
-The S&P 500 is 7% above its 200-dMA. When Sentiment
is considered, the signal is also neutral.
-RSI is close to an oversold reading, but is still
neutral.
-VIX.
-My Money Trend indicator.
-50% of the 15-ETFs that I track have been up over the last
10-days – neutral.
BEAR SIGNS
-The 5-10-20 Timer System is sell; for now the 5-dEMA and
the 10-dEMA are below the 20-dEMA.
-MACD of S&P 500 price made a bearish crossover 4
September.
-The 10-dMA of stocks
advancing on the NYSE (Breadth) is below 50%.
-The size of up-moves has been considerably smaller than
the size of down-moves over the last month.
-The Smart Money (late-day action) is bearish. This
indicator is based on the Smart Money Indicator (a variant of the indicator
developed by Don Hayes).
-Long-term new-high/new-low data.
-Short-term new-high/new-low data.
-Only 2.3% of all issues traded on the NYSE made new,
52-week highs when the S&P 500 made a new all-time-highs last week. Recent
new-highs have shown an extremely narrow advance. (This stays in the negative
column until we make a new high.)
On Friday, 21 February, 2 days after the top of the
Coronavirus pullback, there were 10 bear-signs and 1 bull-sign. Now there are 8
bear-signs and 5 bull-signs. Last week, there were 11 bear-signs and 4 bull-signs.
As of today, the S&P 500 is down 7.3% from its
all-time high. This is day 11 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.
Friday, the S&P 500 dropped below its 50-dMA and closed
0.7% below it. That’s a bearish sign
since many have been bullish only because the 50-day held. No more; they have
to admit a bigger drop is likely. The 200-dMA is now 3104, 7% lower than today’s
close.
The daily sum of 20 Indicators improved from -4 to -1 (a positive
number is bullish; negatives are bearish). The 10-day smoothed sum that smooths
the daily fluctuations improved from -49 to -47. (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 remained SELL.
Volume and Price Indicators are bearish. It has been SELL for the last 9 days.
I remain bearish. I saw no signs that today was a bottom.
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
FRIDAY 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.
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. 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.
