“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.
"This is one of the big problems with wokeness. That
what you say doesn't have to make sense or jibe with the facts, and a challenge
itself is equated with racism...Saying white power and privilege is at all
all-time high is just ridiculous. Higher than a century ago with the Tulsa race
massacre? Higher than the years when the KKK rode unchecked and Jim Crow went unchallenged?
Higher than the 1960s when the Supremes and Willie Mays could not stay in the
same hotel as the white people they were working with?...Having a warped view
of reality leads to policies that are warped.” – Bill Maher.
EXISTING HOME SALES (Reuters)
“U.S. home sales fell for a fourth straight month in May
as record high prices amid low inventory frustrated potential buyers, a trend
that could persist for while, with builders unable to deliver more houses
because of expensive lumber. Existing home sales dropped 0.9% to a seasonally
adjusted annual rate of 5.80 million units last month...” Story at...
STAGE SET FOR VOLATILITY (RIA)
“Well, not only did the highs not stick, but the 50-dma
failed during Friday’s sell-off. The market closing at its lows suggests we
could see some more selling early next week. The ‘good news,’ if you want
to call it that, is the ‘sell signal’ is moving quickly through its cycle. Such suggests that
selling pressure may remain limited and may resolve itself by the end of June...
On Friday, the weekly ‘sell
signal’ triggered suggests a period of correction/consolidation is probable.”” Commentary at...
https://realinvestmentadvice.com/technically-speaking-cot-report-shows-stage-set-for-volatility/
MORGAN STANLEY REVEALS THE ONLY METRIC THAT DETERMINES
WHAT THE MARKET WILL DO NEXT (ZeroHedge)
“In our view, the data has been so strong, it would be
naive not to think the Fed wasn't moving closer to tapering over the past
several months. In fact, the idea that the Fed hasn't been thinking and/or talking
about it seems absurd. Surely the market understands this, making the events of
the past week not so much of a surprise. It's all part of the mid cycle
transition that has been ongoing for months and fits with the choppier price
action and unstable market leadership we have been witnessing... Wilson writes
that contrary to the FOMC shock, monetary tightening actually began months ago if one is
looking at the right metric...In a world where all of the major developed
market central banks are stuck at the zero bound, or lower, the primary metric that
determines if monetary policy is getting more or less accommodative is Money
Supply Growth.” Commentary at...
ASIANS IN THE U.S. LEAST LIKELY TO GET CORONAVIRUS
INFECTION (scmp.com)
“Data on Covid-19 infections and mortality in New York
City broken down by ethnicity suggests Asians have the lowest infection and
mortality rates of any group. Similar figures from Los Angeles found Asians had
the lowest infection rate among all groups.” Story at...
Chart from...
https://www.apmresearchlab.org/covid/deaths-by-race
I did some analysis on this subject last March. See...
http://navigatethestockmarket.blogspot.com/2021/03/jobless-claims-philadelphia-fed-index.html
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website as
of 5:15 PM Tuesday. 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
-Tuesday the S&P 500 rose
about 0.5% to 4246.
-VIX dropped about 7% to 16.57.
-The yield on the 10-year
Treasury dipped to 1.467%.
Again today, we had very high,
unchanged-volume. In theory this in an
indication that investors are confused and it can signal a reversal. Sometimes
it’s true; sometimes not.
The daily sum of 20 Indicators remained -9 (a positive
number is bullish; negatives are bearish); the 10-day smoothed sum that smooths
the daily fluctuations dropped from +7 to -12. (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, VIX, Price & Sentiment are neutral.
I suggested earlier that the
50-dMA would be the bottom or near the bottom for this pullback. As of today’s
close, the Index is 1.4% above its 50-dMA. So far so good...
83% of volume was up Monday
and I would like to have seen another strong up-volume day Tuesday. As it
turned out, only 53% of volume was up today, so we didn’t get the bullish sign.
Still, I can’t complain about an up-day.
I am bullish, but I’d be
careful about getting too bullish. I see a lot more Pros calling for a 10-20%
correction and breadth (% stocks advancing on the NYSE) is still below 50% on a
10-day basis.
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
TUESDAY MARKET INTERNALS (NYSE
DATA)
Market Internals remained BEARISH 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.
