“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.
STOCKS PLUMMET AT 1PM (CNBC)
“U.S stocks fell to session lows in a swift fashion on
Thursday after a report that President Joe Biden is slated to propose capital
gains taxes for the rich. The S&P 500 erased earlier gains and fell 0.5%...Bloomberg
News reported Thursday afternoon that Biden is planning a capital gains tax
hike to as high as 43.4%. The proposed increase would nearly double the current
rate for wealthy Americans.” Story at...
https://www.cnbc.com/2021/04/21/stock-market-futures-open-to-close-news.html
JOBLESS CLAIMS (WSJ)
“Worker filings for jobless benefits declined to 547,000
last week, a new pandemic low that adds to evidence of a strengthening labor
market and overall economic recovery.” Story at...
https://www.wsj.com/articles/weekly-jobless-claims-coronavirus-04-22-2021-11619041467
EXISTING HOME SALES (ABC News)
“Sales of previously occupied U.S. homes fell for the
second consecutive month in March because there are so few on the market, and
the fierce competition for those that do exist are pushing prices to new highs.
Existing home sales fell 3.7% last month from February...” Story at...
https://abcnews.go.com/US/wireStory/shortage-cuts-sales-existing-us-homes-march-77241425
LEI (Conference Board via PR Newswire)
“The Conference Board Leading Economic
Index® (LEI) for the U.S. increased 1.3 percent in March to
111.6 (2016 = 100), following a 0.1 percent decrease in February and a 0.5
percent increase in January. ‘The U.S. LEI rose sharply in March, which more
than offset February's slightly negative revised figure," said Ataman
Ozyildirim, Senior Director of Economic Research at The Conference Board.
"The improvement in the U.S. LEI, with all ten components contributing
positively, suggests economic momentum is increasing in the near term...The
recent trend in the U.S. LEI is consistent with the economy picking up in the
coming months, and The Conference Board now projects year-over-year growth
could reach 6.0 percent in 2021.’" Press release at...
My cmt: This is further evidence we won’t see a stock
market crash now, but we are due for a reset since PEs and markets are
stretched.
INSIDERS ARE SENDING A PRETTY CLEAR SIGNAL ABOUT THE
STOCK MARKET (AND THE ECONOMY) (The Felder report)
“...when we look at the recent data (provided by InsideArbitrage.com), it’s
immediately apparent that the top executives (along with directors and 10%
shareholders) have rarely been as aggressive in selling, or disinterested in
buying, as they are today...this relative bearishness on the part of
insiders in aggregate would seem to suggest that stock prices are likely to
fall short of euphoric
expectations over the next year or so. On top of that, the
economy could begin to disappoint on a similar time frame, as well. Don’t say
they didn’t warn you.” - Jesse Felder.
SENTIMENT SPEAKS: YOU MAY NOT BELIEVE MY 2021 TARGETS
(Elliott Wave Trader)
“...please recognize that the 4070-4100SPX region is now
our new support region. As long as we remain over that support, then I foresee
this rally to continue until the 4400SPX region in a more direct fashion.
Should we break that support – which I see as the lower probability scenario at
that time – then I think we will re-test the 3950-4000 region before we see another
even stronger rally to the 4600SPX region. But, again, this is only my
alternative scenario at this point in time.” – Avi Gilbert. Commentary at...
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website as
of 5:30pm 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 dropped
about 0.9% to 4135.
-VIX rose about 7% to 18.71.
-The yield on the 10-year
Treasury dipped to 1.545%.
Today was a statistically
significant down-day. That just means that the price-volume move exceeded my
statistical parameters. Data shows that a statistically-significant, down-day
is followed by an up-day about 60% of the time. We had a statistically
significant up-day yesterday. This is the type of back-and-forth movement often
seen at tops
The daily sum of 20 Indicators
improved from -5 to -4 (a positive number is bullish; negatives are bearish);
the 10-day smoothed sum that smooths the daily fluctuations dipped from +24 to
+10 (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 slipped to HOLD. Price is bullish; Volume, Sentiment & VIX are neutral.
This indicator can be slow to turn.
I have been saying, “We are getting close to a pullback
of some kind.” I suspect that it is here.
Given that new-highs were good at the all-time new high
for the S&P 500, this pullback is likely to be less than 10%. The most
likely zone for a pullback-bottom would be around the 50-dM (3971) – 4.1% below
today’s close. (That assumes we actually do have a correction from here.) The
200-dMA is now 3625, 14.1% below today’s close, although, I don’t think we’ll
drop that far.
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 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.
I sold Boeing (BA), Monday. It
is no longer in the top 3 for momentum and has been acting poorly recently. As
of 19 April, my 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. 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.
