“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.
NFIB SMALL BUSINESS OPTIMISM (Reuters)
“Confidence among small businesses in the United States
improved slightly in June after declining in May, despite owners worrying about
a labor shortage and inflation... Some 56% of respondents said they had few or
no qualified applicants for open jobs in June...” Story at...
https://www.reuters.com/article/us-usa-economy-small-business-idUSKBN2EJ0WB
CPI / CORE CPI (Reuters)
“Inflation surged in June at its fastest pace in nearly
13 years amid a burst in used vehicle costs and price increases in food and
energy, the Labor Department reported Tuesday. The consumer price index
increased 5.4% from a year earlier... the core CPI rose 4.5%, the sharpest move
for that measure since September 1991...” Story at...
FEDERAL JUDGE PRESSES TRUMP LAWYERS ON ELECTION FRAUD
CLAIMS (msn.com)
“U.S. District Court Judge Linda V. Parker said she would
rule on a request to discipline the lawyers in coming weeks. But over and over
again during the more than five-hour hearing, she pointedly pressed the lawyers
involved — including Trump allies Sidney Powell and L. Lin Wood — to explain
what steps they had taken to ensure their court filings in the case filed last
year had been accurate. She appeared astonished by many of their answers. While
their suit aimed to create a broad impression that the vote in Michigan — and
specifically Detroit’s Wayne County — had been troubled, the affidavits filed
to support those claims included obvious errors, speculation and basic
misunderstandings of how elections are generally conducted in the state, Parker
said.” Story at...
Remember that the GOP report on Michigan’s
election concluded, “This Committee found no evidence of widespread or
systematic fraud in Michigan’s prosecution of the 2020 election.” - Senator
Edward McBroom – Chair; Senator Lana Theis – Majority Vice Chair; Senator Jeff
Irwin – Minority Vice Chair; Senator John Bizon.
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website as
of 8:30 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 dropped about 0.4% to 4369.
-VIX rose about 6% to 17.12.
-The yield on the 10-year Treasury rose to 1.403%.
Today was easy to figure out - Inflation rose; yields
were up; stocks were down. “Where do we go from here?” That is the tricky
question. This has been the Teflon rally – nothing sticks and bad news has not
slowed interest in stocks so far. Indicators are pointing down, but not
particularly strongly. The Pros are taking profits based on the late-day action
and that’s a bearish sign, but we never got too many strong top-indicators. I
am not making any changes to market holdings until I see more negative signs.
The daily sum of 20 Indicators remained -6 (a positive
number is bullish; negatives are bearish); the 10-day smoothed sum that smooths
the daily fluctuations slipped from -2 to -6. (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, Volume, Price & Sentiment are neutral.
There is currently only 1 top-indicator
warning of a top: (1) the index is stretched too far above its 200-dMA.
I remain 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
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 declined to 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 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.
