“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.
RETAIL SALES (APnews)
“Newly vaccinated and armed with $1,400 stimulus checks,
Americans went on a spending spree last month, buying new clothes and going out
to eat again. Retail sales surged a seasonally adjusted 9.8%...
https://apnews.com/article/retail-sales-economy-2f20ee18d72ed056412fde0fe94f9fae
JOBLESS CLAIMS (Yahoo.com)
“New weekly jobless claims plunged to a pandemic-era low
after last week's unexpected jump, with the labor market's
choppy recovery closely following the trajectory of new COVID-19 infections...Initial jobless claims, week
ended April 10: 576,000 vs. 700,000 expected and a
revised 769,000 during the prior week...” Story at...
EMPIRE STATE MANUFACTURING (Seeking Alpha)
“Empire State Manufacturing Index surges in April. April Empire State Manufacturing Index: +26.30 vs.
+17.0 consensus and +17.4 prior.” Data from...
https://seekingalpha.com/news/3682099-empire-state-manufacturing-index-surges-in-april
PHILADELPHIA FED INDEX (fxStreet)
“The Federal
Reserve Bank of Philadelphia reported on Thursday that the
headline Manufacturing Activity Index of the Manufacturing Business Outlook Survey
improved to 50.2 in April from 44.5 in March.” Data from...
INDUSTRIAL PRODUCTION (San Diego Union-Tribune)
“American industry rebounded last month as the United
States recovered from an unusually frigid February. Industrial production —
including output at factories, mines and utilities — rose 1.4% in March...”
Story at...
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website as
of 8:15pm 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 1.1% to 4172.
-VIX slipped about 3% to 16.49.
-The yield on the 10-year
Treasury dipped to 1.575%.
Today was a statistically significant up-day. That just means
that the price-volume move exceeded my statistical parameters. Statistics show
that a statistically-significant, up-day is followed by a down-day about 60% of
the time. Statistically-significant,
up-days almost always coincide with tops, but not all
statistically-significant, up-days occur at tops. Today could be a top - there
are 4 top indicators giving a warning - but it is not quite enough to issue a
top signal.
Top Indicators that are
currently warning: (1) The Index is too far above its 200-dMA; (2) RSI is
overbought; (3) the Index is too far ahead of breadth; (4) and the Index is too
far ahead of Money Trend.
If Bollinger bands were overbought,
I’d say we were at a top. As it is, maybe, maybe not. Late day action is still
bullish, so it appears that the Pros haven’t given up on the rally yet.
Again, today, we had very high,
unchanged-volume. In theory this in an
indication that investors are confused and it can signal a reversal, in this
case down. I’ve tried to develop an indicator based on this without much
success. Sometimes it’s true; sometimes
not. It was about this high at the top on 12 Feb that preceded a small pullback
of 4%, but it has been higher since then with no dip.
The market remains relatively broad; 9.7% of all
issues traded on the NYSE made new, 52-week highs when the S&P 500 made a
new all-time high on 15 April 13 Apr. This value is above average, and suggests that a
correction, if we have one, would be less than a 10% drop.
The daily sum of 20 Indicators
improved from +2 to +3 (a positive number is bullish; negatives are bearish);
the 10-day smoothed sum that smooths the daily fluctuations rose from +66 to
+67 (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 & Volume are bullish; Sentiment is
neutral.
I remain cautiously Bullish, but I did reduce my
%-invested in stocks to 50% on Monday and I took profits in Intel (INTC) Wednesday
(of course it was up today). That cut my %-invested to about 45%. (INTC has
been weak recently even though its momentum is still comparably good.) We are
getting close to a pullback of some kind – today could have been a top...or not.
Signals are not quite there yet, but the market doesn’t always wait for my
signals.
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.
As of 12 April, my
stock-allocation is about 45% 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.
