“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
“People always ask me what is going on in the markets. It
is simple. Greatest Speculative Bubble of All Time in All Things. By two orders
of magnitude.” – Michael “Big Short” Burry.
“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.
THE BULLS DID THEIR JOB (Heritage Capital)
“The stock market may need a little rest, nothing big and
perhaps barely noticeable. So many things are stretched to the upside. The Dow
Industrials have been lagging. They could play catch up at the expense of the
others. I do not think it’s the time to go all in on equities. As you know I
like to take the other side of the crowd in many cases.” – Paul Schatz, Presient Heritage Capital. Commentary at...
https://investfortomorrow.com/blog/one-week-later-the-bulls-did-their-job/
CLIMATE CHANGE AT 33
“...the most consistent feature of climate change is the
failure of predictions of catastrophe to materialize. In
1990, Martin Parry, a future
cochair of an IPCC working group, produced a report claiming that the world
could suffer mass starvation and soaring food prices within 40 years. Yet the
prevalence of undernourishment in developing countries has been
on a downward trend since the 1970s and was nearly halved, from 23.3% in 1991
to 12.9% in 2015...
...By 1988, despite the economic expansion of the 1980s,
the West’s emissions had grown by only 3.8% [since 1981], while the rest of the
world’s had grown by 27.0%. After 2002, non-Western emissions grew even faster.
In the 12 years before 2002, non-Western emissions grew by 21.2%; and in the
subsequent 12 years, by 76.8%. By 2014, with Western emissions broadly flat
over the 24-year period, Western emissions had shrunk to 26% of the total, and
the share of non-Western emissions had risen to 74%. In less than a decade and
a half, the increase in non-Western emissions outstripped the combined total of
U.S. and E.U. emissions. In terms of affecting the physics of global
warming, it doesn’t really matter what the West does any more... After 30
years, international policy is at a dead end,” he said in a little-noticed
October 2020 presentation to
the European Central Bank. “We have policies, but they have not been effective,
and they’re getting us basically nowhere.” The culprit, in Nordhaus’s view? The
free-rider problem [“developing countries China, India, etc., have refused to
cooperate and were given a pass in the Paris Agreement.]” Commentary at...
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website
as of 5:00 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 4291.
-VIX rose about 1% to 15.62.
-The yield on the 10-year
Treasury slipped to 1.478%.
Over the last 10-days only 49%
of the volume has been up-volume; 49% of issues in the NYSE have been up; the
new-high minus new-low spread was -74 today. These are bearish signs and we’ll
hope the trend reverses upward soon.
The daily sum of 20 Indicators declined from +2 to zero
(a positive number is bullish; negatives are bearish); the 10-day smoothed sum
that smooths the daily fluctuations dropped from -34 to -40. (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 was bullish; Volume, VIX & Sentiment are
neutral.
There is currently only 1
top-indicator is warning of a top; the Index is stretched too far ahead of its
200-dMA.
I am cautiously bullish.
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
Financials (XLF) have fallen
out of the top 3 ETFs in momentum. It
was the big winner today so it may be worth holding a bit longer.
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 and I
am watching the markets closely. For now, 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.
