“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
“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.
"If I was Darth Vader and I wanted to destroy the US
economy, I would do aggressive spending in the middle of an already hot
economy...This is the biggest bubble I've seen in my career." - Stanley
Druckenmiller, billionaire investor.
“Inflation is not going to be transitory;
I’ve been pretty certain in my mind about three prior calls. This is the fourth
one.” - Mohamed El-Erian, Chief economic adviser at Allianz SE
GDP (FOX Business)
“The U.S. economy grew less
than expected in the three months through June as supply-chain disruptions and
labor shortages slowed the pace of economic activity while the country reopened
from its COVID-19 lockdowns.
Gross domestic product – the broadest measure of economic performance – grew at
a 6.5% annual rate during the second quarter...” Story at...
https://www.foxbusiness.com/economy/gross-domestic-product-q2-2021
JOBLESS CLAIMS (WSJ)
“Workers’ filings for new unemployment benefits resumed their decline last week and remain near a pandemic low as the labor market continues to recover from the pandemic, economists say. New jobless claims dropped slightly to 400,000 for the week ended July 24...” Story at...
https://www.wsj.com/articles/weekly-jobless-claims-07-29-2021-11627519239
IN 3 WEEKS, WE’LL BE THROUGH THIS (ZeroHedge)
“The US would get through the worst of the delta surge in
a matter of weeks, Dr. Gottlieb predicted. Just look at the trend in the UK,
where cases have rolled over completely. "I think in another two or
three weeks we'll be through this," Dr. Gottlieb said.
Story at...
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website
as of 5:30 PM Thursday. 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
-Thursday the S&P 500 rose about 0.4% to 4419.
-VIX fell about 3% to 17.70.
-The yield on the 10-year Treasury rose to 1.272%.
The daily sum of 20 Indicators improved from -4 to -3 (a
positive number is bullish; negatives are bearish); the 10-day smoothed sum
that smooths the daily fluctuations improved from -68 to -64. (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 Short-term, market-internals ensemble indicator
improved to BULLISH.
I noted yesterday that market internals were good and the
daily stats suggested that more new-highs were possible. Today, we had more positive
internals and my hope that internals were signaling a bullish turning-point yesterday
seems to be paying out.
The Long Term NTSM indicator
remained HOLD. Volume, VIX, Price & Sentiment are neutral.
I am bullish after Thursday’s
internals, but with caution; I still think there is a correction coming. Still,
I am reminded that the key is to trade what we see; not what we think. I see more bullish indications and that’s the
important point.
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 improved to POSITIVE 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.
My stock-allocation is about 50%
invested in stocks. I am not super bullish (or bearish) and I am watching the
markets closely.
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.
