“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
JOBLESS CLAIMS (WSJ)
“U.S. jobless claims fell slightly to 385,000 last
week, as worker filings for new unemployment benefits settled this summer at a
level that is nearly double the pre-pandemic average" Story at...
https://www.wsj.com/articles/weekly-jobless-claims-08-05-2021-11628113581
TAXES TOO DARNED HIGH – RETARDING THE ECONOMY (McClellan
Financial Publications)
“Low taxes are a big stimulus to economic activity.
Everyone knows that. Curiously, not everyone understands that high taxes
are a giant restriction on the economy. This week’s chart helps to offer
evidence of that latter point. We have several decades of history to show
us that jacking up tax collections to too high of a portion of GDP is a big
restriction on the economy, so much so that it tends to snuff out economic
activity. 18% appears to be the magic number, since every time that total
tax receipts as a percentage of GDP has gone above that number, it has resulted
in a recession... How this is going to play out for the months ahead is
something that remains to be seen. But it is not good news for the stock
market bulls.” - Tom McClellan, Editor, The McClellan Market Report. Commentary
at...
My cmt: Perhaps, but if the Gov’t is going to spend, we
need taxes to pay for the expenditures.
Seems logical, but no one ever accused Politicians of being logical.
AUGUST HAS NOT BEEN KIND TO THE BULLS (Heritage Capital,
2 Aug)
“In January I forecast that stocks would peak by Labor
Day and then see their largest decline since at least October. Given that Labor
Day is only a month away, I am sticking by a peak this month with weakness into
September and on. However, I do not see any confirmation just yet and I do not
believe the bulls have exhausted themselves. That could be coming this month.
August is going to be a very interesting, telling and important month.” – Paul
Schatz, President Heritage Capital. Commentary at...
https://investfortomorrow.com/blog/august-has-not-been-kind-to-the-bulls/
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 rose about 0.6% to 4429.
-VIX dipped about 4% to 17.28.
-The yield on the 10-year Treasury rose to 1.224%.
The daily sum of 20 Indicators improved from -9 to -5 (a
positive number is bullish; negatives are bearish); the 10-day smoothed sum
that smooths the daily fluctuations declined from -40 to -43. (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. Volume, VIX, Price & Sentiment are neutral.
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
THURSDAY MARKET INTERNALS
(NYSE DATA)
Market Internals remained NEUTRAL 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.
