“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
“Gross Domestic Product (GDP). GDP is
simply the total amount of spending in an economy. GDP, as currently measured,
does not distinguish between “good” spending and “bad” spending. GDP does not
distinguish between consumption spending and investment spending. GDP also does
not distinguish whether spending is generated by existing wealth, by going into
debt temporarily, or by going into debt permanently. In this world, every dollar
spent on education or new means of production, is counted the same as every
dollar spent on epic bachelor parties and video games.” – Michael Lebowitz,
Real Investment Advice
GDP (fxstreet)
“The United States' Real Gross Domestic Product (GDP)
expanded at an annual rate of 6.6% in the second quarter, the US Bureau of
Economic Analysis' (BEA) second estimate showed on Thursday.” Story at...
https://www.fxstreet.com/news/us-real-gdp-expands-by-66-in-q2-vs-67-expected-202108261234
JOBLESS CLAIMS (YahooFinance)
“New weekly jobless claims hovered near their lowest
level since March 2020, underscoring the sustained improvement in the labor
market despite ongoing concerns over the Delta variant and worker shortages...At
353,000, the level of new jobless claims was up slightly from the previous
week, marking the first increase in initial claims in five weeks.” Story at...
https://finance.yahoo.com/news/weekly-jobless-claims-week-ended-august-21-2021-181512231.html
FED NEEDS TO GET GOING ON THE TAPER (CNBC)
“St. Louis Federal Reserve President James Bullard said
Thursday that the central bank should begin curbing its monthly stimulus
efforts soon and have the process wrapped up by the end of March to prevent the
U.S. economy from overheating...then we can evaluate what the situation is and
we’ll be able to see at that point whether inflation has moderated...If it
hasn’t moderated, we’re going to have to be more aggressive to contain
inflation.” Story at...
My cmt: I think this is sooner than the market has
anticipated.
LOOKS LIKE A TOPPING PATTERN (Investing.com)
“The S&P 500 index reached new record high yesterday,
but it gained just 0.15%. The market will most likely turn south again and
extend its weeks-long consolidation... We are expecting a 5% or bigger
correction from the new record high.” Sunshine Profits. Commentary at...
REAL INVESTMENT ADVICE COMMENTARY (RIA)
“Currently, the government’s interest expense is less
than 8% of total expenditures. That is the lowest percentage since at least
1947. Now contemplate the following:
-Total Federal Debt has risen 8320% since 1966.
-Federal Debt to GDP is 127%, up from 40% in 1966.
-Interest expense declined by $46 billion as Treasury debt
rose by over $7 trillion over the last year.”
-Fed magic allows for cheap funding of deficits. What
could go wrong?
...like any Ponzi scheme, it either gets bigger, or it
fails. This one will get bigger, and it will fail... we must remain prepared
for the end game, whenever it may occur.”
https://realinvestmentadvice.com/the-elephant-they-dont-want-you-to-see/
TRUMP ATTORNEYS FACE SANCTIONS FOR “ABUSE" OF THE LEGAL
SYSTEM (Business Insider)
“A US judge has ruled that the pro-Trump attorneys who
sued Michigan officials over false claims they broke state election law and
manipulated the vote will have to pay the defendants' legal fees and face
sanctions over unethical behavior...In a scathing ruling issued on Thursday, US District Judge
Linda V. Parker said Powell and Wood had engaged in a "historic and
profound abuse of the judicial process." Their claims - made against
Michigan Gov. Gretchen Whitmer, the City of Detroit, and state election
officials - were not just flimsy and unfounded, alleging a massive and
implausible conspiracy to steal the election, Parker said, but actively
harmful.” Story at...
YES, TRUMP REALLY DID LOSE MICHIGAN (WSJ)
“Donald Trump says
fraud is the only reason he lost the 2020 election. Some even think Mr. Trump
will be reinstated once the truth comes out. Anyone who finds this narrative at
all appealing should take 30 minutes to read the investigative report posted
last week by Michigan Republicans.” Editorial commentary at...
https://www.wsj.com/articles/yes-trump-really-did-lose-michigan-11625265004
Read the Michigan GOP report here...
Bottom line from the report: “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 5:30 PM Thursday. U.S. total case numbers are on the left axis; daily numbers are on the right side of the graph in Red with the 10-dMA of daily numbers in Green.
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 fell about 0.6% to 4470.
-VIX rose about 12% to 16.79.
-The yield on the 10-year Treasury rose to 1.357%.
The daily sum of 20 Indicators declined from -4 to -8 (a
positive number is bullish; negatives are bearish); the 10-day smoothed sum
that smooths the daily fluctuations slipped from -71 to -75. (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, Volume, VIX & Sentiment indicators are
neutral.
I still see plenty of Bear
signs and the weakness remains. The 50-dMA of issues advancing on the NYSE
remains below 50%. To me, the definition of a pullback is when this stat was
below 50% for 3 days in a row. It has been below 50% for 8 straight sessions.
One of my favorite trend
indicators remains down too. The 40-dMA of new 52-week highs is falling. It
will be interesting to see how the Friday rundown of indicators looks tomorrow.
If indicators improve, I’ll
bump my stock allocation back to 50%.
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 reversed to NEGATIVE 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 45%
invested in stocks, slightly below my “normal” 50% allocation. I am neutral at
this point and watching the markets and indicators 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.
