“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
“In my decades of investing experience, I have not seen
such mindless and uninformed speculation as I have witnessed recently. Indeed,
in nominal dollar terms...it is far in excess of the dot.com boom.” – Doug
Cass.
“I never imagined that I would see the day that the Chairman
of the House Judiciary Committee would step forward to call for raw court
packing. It is a sign of our current political environment where rage
overwhelms reason.” - Professor Jonathan Turley, honorary Doctorate of Law from
John Marshall Law School for his contributions to civil liberties and the
public interest.
GDP (CNBC)
“Economic activity boomed to start 2021, as widespread
vaccinations and more fuel from government spending helped get the U.S. closer
to where it was before the Covid-19 pandemic struck, the Commerce Department
reported Thursday. Gross domestic product, the sum of all goods and services
produced in the economy, jumped 6.4% for the first three months of the year on
an annualized basis.” Story at...
My cmt: Hmmmm...but we still need another 2-trillion to
jump start this economy?
JOBLESS CLAIMS (AP News)
“The number of Americans applying for unemployment
benefits dropped by 13,000 last week to 553,000, the lowest level since the
pandemic hit last March and another sign the economy is recovering from the
coronavirus recession...They have fallen sharply over the past year but remain
well above the 230,000 weekly figure typical before the pandemic struck the
economy...” Story at...
FED DAY – I’M NOT CELEBRATING (Heritage Capital, 28 April)
“...if I sat in Jay Powell’s seat, I would already have
begun to slightly pull back. The markets absolutely do not need the level of
support they are getting from the Fed. And let’s face it, the economy has been
roaring since Q3 2020. This year should print the strongest GDP growth in
decades. Everyone seems happy. But at what future cost? Inflation has been a
theme of mine since Q3 2020 and that genie is out of the bottle.” – Paul
Schatz, President heritage Capital. Commentary at...
https://investfortomorrow.com/blog/fed-day-is-here-and-i-am-not-celebrating/
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website as
of 7:15pm Thursday. US total case 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
-Thursday the S&P 500 rose
about 0.7% to 4211, another new high.
-VIX rose about 2% to 17.61,
as it appears the Options Crowd has some concerns.
-The yield on the 10-year
Treasury slipped to 1.643%.
I wrote yesterday, “In the last 9 trading-days, the
S&P 500 has improved by 0.25% in choppy trading, i.e., it has nearly
stalled.” Forget that! Today we broke
higher decisively. We will have a pullback, but it looks like the market will
go higher before we see the weakness. Right now, there aren’t that many Top
Indicators that are warning.
Still, Utilities are outpacing the S&P 500 and that
is a sign that investors are worried and playing some defense.
The daily sum of 20 Indicators
improved from +5 to +7 (a positive number is bullish; negatives are bearish);
the 10-day smoothed sum that smooths the daily fluctuations improved from +17
to +21 (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 BUY. Price & VIX are bullish; Volume & Sentiment are neutral.
This indicator can be slow to turn.
I have been saying, “We are getting close to a pullback
of some kind.” Looks like it’s postponed.
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
THURSDAY MARKET INTERNALS
(NYSE DATA)
Market Internals remained BULLISH 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.
As of 19 April, my
stock-allocation is about 40% invested in stocks. I hadn’t intended to drop
this low, but I took profits in both Boeing and Intel due to their dropping out
of the top 3 in momentum.
You may wish to have a higher
or lower % invested in stocks depending on your risk tolerance. 50% is a
conservative position that I consider fully invested for most retirees. 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 a correction is deep enough, and I can call a bottom, 80% would not be out
of the question.
The markets have not
retested the lows on recent corrections and that left me under-invested on the
bounces. I will need to put less reliance on retests in the future.
