“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.
“This isn’t a bull market or a bear market. It’s a
know-nothing market. Bragging rights used to go to those investors who worked
the hardest at learning the most. Now the glory often goes to those who
know the least and don’t even care.” Jason Zweig.
JOLTS JOB OPENINGS (Reuters)
“U.S. job openings rose to a two-year high in February
while hiring picked up as strengthening domestic demand amid increased COVID-19
vaccinations and additional pandemic aid from the government boost companies’
needs for more workers...Job openings, a measure of labor demand, increased
268,000 to 7.4 million as of the last day of February.” Story at...
CALLING A MAJOR TOP: APRIL-JUNE (McClellan Financial
Publications)
“It is now officially April, and in past posts I have
noted that the leading indication message from crude has called for a stock
market top due in April 2021...Sometimes the turns come early, sometimes
late...We therefore have to turn to shorter term indicators to polish this
message to a more precise degree...a top sometime this summer is reasonable to
expect, and that would not be too far off from crude oil’s message for a top
ideally due in April.” Commentary at...
SIGNIFICANT STOCK MARKET CONSOLIDATION (Yahoo Finance)
"Very near term, we expect equities to continue to
be well supported by the acceleration in macro growth, and see buying by
systematic strategies and buybacks driving a grind higher. But we expect a
significant consolidation (-6% to -10%) as growth peaks over the next three
months," Chadha wrote in a new research note on Tuesday.” Story at...
INVESTORS REMAIN EXUBERANT (RIA)
“We remain “bullish” on the markets currently as
momentum is still in play. However, it is likely that by mid-summer we will see
a decent correction as the “peak” in the economic and earnings data
becomes visible.” Commentary at...
https://realinvestmentadvice.com/technically-speaking-despite-correction-investors-are-exuberant/
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website as
of 8:00pm Tuesday. 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
-Tuesday the S&P 500 dipped
about 0.1% to 4074.
-VIX rose about 1% to 18.12.
-The yield on the 10-year
Treasury rose to 1.665%.
Bollinger Bands were again overbought
today; RSI is not, so for now, I’ll ignore the Bollinger Band warning. We do
see an issue with Top Indicators.
A number of Pros calling for a
stock market pullback in the near to mid-term (now, or out a few months). My
system is starting to warn, too. There are currently 3 Top Indicators: (1) The
S&P 500 is 14.3% above its 200-dM. The Index topped when this value hit 16%
last September; (2) Bollinger Bands (3) Smart Money (late day action is
overbought). This gives a -4 reading. -5 is the bear warning.
The daily sum of 20 Indicators
improved from +7 to +8 (a positive number is bullish; negatives are bearish);
the 10-day smoothed sum that smooths the daily fluctuations improved from -11
to +2 (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 & Volume are bullish; VIX & Sentiment
are neutral.
I remain Bullish, but I am seeing more negative signs in
top indicators, so I will pay attention and consider cutting stock allocation back
to 50% if we see more negative signs.
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 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 9 March, my
stock-allocation is about 60% 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.
