“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 [Supreme]
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.
DURABLE ORDERS (USNews)
“The Commerce Department reported Thursday that orders
for factory goods meant to last at least three years fell 1.3% in April after
rising 1.3% in March. Transportation orders skidded 6.7%.” Story at...
https://www.usnews.com/news/business/articles/2021-05-27/us-durable-goods-orders-drop-13-in-april
The shortage in computer chips was blamed fo r the drop
in orders.
JOBLESS CLAIMS (CNBC)
“The U.S. jobs market edged closer to its pre-pandemic
self last week as initial jobless claims totaled just 406,000 for the week
ended May 22...” Story at...
https://www.cnbc.com/2021/05/27/weekly-jobless-claims.html
GDP (Marketwatch)
“The U.S. economy expanded at an annualized 6.4% pace in
the first quarter unrevised from the prior estimate released last month, the Commerce Department said
Thursday.” Story at...
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website as
of 10pm 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 0.1% to 4201.
-VIX fell about 4% to 16.74.
-The yield on the 10-year
Treasury rose to 1.613%.
Once again, breadth (advancing
issues vs declining issues) was good today with advancers nearly double decliners.
Numbers like that usually indicate the S&P 500 will make a move higher to
catch-up to the small caps.
The daily sum of 20 Indicators
slipped from +9 to +5 (a positive number is bullish; negatives are bearish);
the 10-day smoothed sum that smooths the daily fluctuations rose from -24 to -6
(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 HOLD. Volume, Price, VIX, & Sentiment are neutral.
Only 2 topping indicators
remain bearish. They are:
-Breadth on the NYSE compared to the S&P 500 index is
bearish – the Index is too far ahead of stocks advancing on the NYSE.
-The S&P 500 is 12.3% above its 200-dMA (Sell point
is 12%.). This value was 15.9% above the 200-dMA when the 10% correction
occurred in Sep 2020.
These 2 have been negative for
a long time and investors haven’t been bothered. With the FED liquidity and the
Politicians providing stimulus checks, overbought conditions may continue.
MACD of S&P 500 price
switched to bullish; my Money Trend indicator is moving higher; short-term
new-high/new-low numbers look good; XLI-ETF (cyclical industrials) is outpacing
the S&P 500 and Utilities (XLU) are under-performing the Index – All bullish.
I am leaning more bullish.
I increased stock allocation
in the portfolio to a fully-invested, 50% in stocks, Tuesday. I am not super
bullish, but I am not bearish either so 50% is a more reasonable allocation
than being under-invested. I added the XLB-Materials ETF.
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 25 May, my
stock-allocation is about 50% 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.
