“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.
WEAK JOBS REPORT SHOWS NEED FOR MORE MASSIVE JOBS AND
FAMILIES BILLS (CNBC)
“President Joe Biden said Friday that April’s lower than
expected job growth reveals that the U.S. economy is still struggling to
recover from the Covid pandemic, and that his massive infrastructure and family
support bills are needed now more than ever.” Story at...
My cmt: Not really. There are plenty of jobs; workers
don’t seem to want them. The last Job Openings report (JOLTS) showed there were
7.4 million job-openings. The problem has been reported frequently – if you pay
people more to stay home (thru “enhanced” Federal unemployment benefits),
rather than for work, they’ll stay home. We get a new JOLTS report tomorrow, so
it will be interesting.
LIZ CHANEY CONFRONTS A HOUSE OF COWARDS (WSJ)
“Members of the House Republican Conference should
breathe deep, cool down, and think twice. There will be great cost to the party
if it removes the only woman in the House leadership and the only one pushing
back against Mr. Trump. Ousting her for saying the obvious puts the party on
the side of a lie. That’s never a healthy place to be in the long term.” Peggy
Noonan. Opinion at...
https://www.wsj.com/articles/liz-cheney-confronts-a-house-of-cowards-11620342680
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website as
of 5:30pm Monday. 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
-Monday the S&P 500 fell
about 1% to 4188.
-VIX jumped about 18% to 19.66.
-The yield on the 10-year
Treasury rose to 1.604%.
Today’s chart was an ugly one. I couldn’t
find any news that drove it down. Nasdaq
was weak all day so it’s possible that the other indices simply followed the Nas
down. The Indices don’t like too much divergence.
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 Thursday. This is the type of back-and-forth movement often
seen at tops. Today was the 5th statistically-significant day in the
last 3 weeks. That suggests trouble ahead.
The daily sum of 20 Indicators
declined from +2 to -3 (a positive number is bullish; negatives are bearish);
the 10-day smoothed sum that smooths the daily fluctuations dropped from +29 to
+20 (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 declined to HOLD. Price, Volume, VIX & Sentiment are neutral. This
indicator can be slow to turn.
Pullback? Is it here? The indicators dropped, but they aren’t
very negative. We may have to wait a day or two to see what’s going on.
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
MONDAY 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 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. I’ll move back in when conditions appear more favorable.
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.
