EIA Crude Inventories ... NDX:SPX Relative Strength Ratio … Coronavirus (Covid-19) … Stock Market Analysis … ETF Trading … Dow 30 Ranking

“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.

 

EIA CRUDE INVENTORIES (EIA)

“U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 5.2 million barrels from the previous week. At 474.0 million barrels, U.S. crude oil inventories are about 4% below the five year average for this time of year. “ Press release at...

https://ir.eia.gov/wpsr/wpsrsummary.pdf

 

NDX:SPX RELATIVE STRENGTH RATIO (McClellan Financial Publications)

“...Similar readings over the past few years have represented really great buying opportunities for getting into the Nasdaq 100, not as a day to day trade, but as a long term one.  So as we get through the corrective work that is still needed in the month of June, as discussed in our most recent McClellan Market Report newsletter and Daily Edition issues, the message of these indicators is that we should look for the Nasdaq 100 stocks to lead the way higher.” Commentary/analysis at...https://www.mcoscillator.com/learning_center/weekly_chart/ndxspx_relative_strength_ratio/

 

CORONAVIRUS (NTSM)

Here’s the latest from the COVID19 Johns Hopkins website as of 6 PM Wednesday. 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

-Wednesday the S&P 500 dipped about 0.2% to 4220.

-VIX rose about 5% to 17.89.

-The yield on the 10-year Treasury dipped to 1.490%.

 

The S&P 500 made a small retreat today, but signals were little changed. We continue to see action with little trend.

 

1 top-signal remains; (1) The Index is too far ahead of breadth. Both Bollinger Bands and RSI are close to overbought (a top indicator), but they are not there yet.

 

The daily sum of 20 Indicators dipped from +10 to +8 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations rose from +62 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 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

 

WEDNESDAY 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. 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.