“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.
JOBLESS CLAIMS (YahooFinance)
“New weekly jobless claims fell to the lowest level since March 2020,
closing back in on pre-pandemic levels as the rate of new joblessness slowed further... Initial jobless claims,
week ended July 10: 360,000 vs. 350,000 expected and a
revised 386,000 during prior week...” Story at...
https://finance.yahoo.com/news/weekly-jobless-claims-week-ended-july-10-2021-173250411.html
PHILADELPHIA FED INDEX (Reuters)
“Factory activity in the U.S. mid-Atlantic region slowed
sharply for the third consecutive month to its lowest growth since December
after hitting its highest pace in nearly half a century earlier this
spring...The Philadelphia Federal Reserve Bank said its business activity index
fell to 21.9 from 30.7 in June.” Story at...
Manufacturing slowed, but is still expanding since the
reading is greater than zero.
EMPIRE STATE MANUFACTURING (Advisor Perspectives)
“Business activity grew at a record-setting pace in New
York State, according to firms responding to the July 2021 Empire State
Manufacturing Survey. The headline general business conditions index shot up
twenty-six points to 43.0.” Analysis and charts at...
INDUSTRIAL PRODUCTION (mdm)
“Industrial production increased 0.4% in June after
moving up 0.7% in May, according to the Industrial Production and Capacity
Utilization Report, which was released Thursday by the Federal Reserve...”
Story at...
https://www.mdm.com/news/research/economic-trends/industrial-production-up-0-4-in-june/
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website as
of 8:30 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 dipped about 0.3% to 4360.
-VIX rose about 4% to 17.01.
-The yield on the 10-year Treasury was 1.307%.
The daily sum of 20 Indicators improved from -10 to -7 (a
positive number is bullish; negatives are bearish); the 10-day smoothed sum
that smooths the daily fluctuations slipped from -18 to -29. (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
remained HOLD. VIX is Bullish; Volume, Price & Sentiment are neutral. It was
nice to see the VIX indicator turn positive today. VIX is one of the better
long-term indicators.
There is currently only 1
top-indicator warning of a top: (1) the index is stretched too far above its
200-dMA.
I took profits in XLE today. Traders
must think that the oil producers are going to reach an agreement. I suppose it could bounce, but I am just
following the momentum.
We still don’t have a strong
warning from indicators, but I am expecting some weakness. The main clues are
that Breadth (the 10-dMA of % of issues advancing on the NYSE) keeps falling
and my basket of internals remains negative.
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
THURSDAY 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 15 July, my
stock-allocation is about 45% invested in stocks since I took profits in XLE
due to its falling momentum. I’ll probably wait to see what the market is doing
before I put those funds back to work. 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.
