“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.
WE SHOULD HAVE AT LEAST ANOTHER 3 YEARS OF BULL MARKET (Capital
Wealth Planning)
“I really like financials here.” – Jeff Saut, Capital
Wealth Planning. Video at...
https://capitalwealthplanning.com/watch-jeff-saut-discusses-the-current-bull-market/
My cmt: I bumped into Jeff Saut in St Petersburg, FL
while on vacation. We were sitting
side-by-side at the bar at lunchtime. We
had a nice conversation, but I didn’t recognize him until he handed me his card
- very nice gentleman.
WHERE ARE ANALYSTS MOST OPTIMISTIC (FACTSET)
“At the sector level, analysts are most optimistic on the
Energy (64%), Information Technology (63%), Health Care (62%), and
Communication Services (62%) sectors, as these four sectors have the highest
percentages of Buy ratings.” Analysis at...
IT’S COMING...VOLATILITY (NorthmanTrader)
“...new highs or not, one of our favorite charts to track
is again warning of the coming end to the calm. The $VIX has again compressed
into a tightening pattern that is foreboding a coming end to the low volatility
regime...” – Sven Henrich. Commentary
and charts at...
https://northmantrader.com/2021/06/09/its-coming-3/
My cmt: This suggests a jump in the VIX and (if it
ocurrs) that is bearish for stocks.
INFLATION SOARING – BOND YIELDS FALLING (Heritage
Capital)
“My take right now is that the first wave of inflation is
over and priced in. Bond yields will trade in range with a downward bias, but
the ultimate peak is not close to being in. Bond yields will bottom in Q3 and
then rise to new highs in Q4 or Q1 of 2022 as a new wave of inflation begins to
percolate.
There has been lots of chatter about mega cap tech and
FAAMG retaking its leadership role again. While I am less negative about the
group than I have been all year, I am not ready to proclaim that investors
should go all in or even close.” – Paul Schatz,
President Heritage Capital.
Commentary at...
https://investfortomorrow.com/blog/inflation-soaring-bonds-yields-falling-hmmmmm/
AMERICA’S ENERGY GIFT TO DICTATORS (WSJ)
“...President Biden suspended oil leases in Alaska’s
Arctic National Wildlife Refuge (ANWR), even as Russia and the Organization of
the Petroleum Exporting Countries (OPEC) announced production increases. Mr.
Biden’s anti-carbon fusillade will have no effect on the climate as global
demand for fossil fuels will continue to increase for decades no matter what
the U.S. does. Meantime, Russia, China and Iran will take advantage of
America’s astonishing fossil-fuel retreat.” WSJ Editorial at...
https://www.wsj.com/articles/americas-energy-gift-to-dictators-11623279139
This was my complaint against canceling the Keystone
Pipeline; it damages the US while doing nothing for the environment.
China is the world’s largest polluter, but the Paris Agreement
gives them a pass on reducing emissions. China had to shut-down industry for 2
weeks just to clear the air enough to hold the Olympics in 2008. One wonders
why environmentalists haven’t boycotted Chinese products to pressure them into
improving greenhouse gas emissions. Enquiring minds want to know...Hhhmmmmm?
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website
as of 5:30 PM 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 rose
about 0.2% to 4255, another new-high.
-VIX rose about 5% to 16.39.
-The yield on the 10-year
Treasury rose to 1.498%.
As the chart shows, we had another ridiculous bullish close today. BTW, Friday’s chart was very similar. We can expect further antics until the FED meeting ends Wednesday
We still have only 2
top-signals; (1) The Index is too far ahead of breadth. (2) The Index is too
far ahead of its 200-dMA. These are concerning, but not enough to call a top.
Both Bollinger Bands and RSI are close to overbought (a top indicator), but
they are not there yet.
The daily sum of 20 Indicators remained +6 (a positive
number is bullish; negatives are bearish); the 10-day smoothed sum that smooths
the daily fluctuations rose from +63 to +65. (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. Price is Bullish; Volume, VIX, & Sentiment are
neutral.
I am bullish until we see more
bearish 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
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 25 May, my
stock-allocation is about 50% invested in stocks. I am not super bullish, but I
am not bearish either so 50% is a reasonable allocation for me.
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.
