“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.
LEADING ECONOMIC INDICATORS (Conference Board)
“The Conference Board Leading Economic
Index® (LEI)for the U.S. increased by 0.9 percent in July to 116.0 (2016 =
100), following a 0.5 percent increase in June and a 1.2 percent increase in
May. “The U.S. LEI registered another large gain in July, with all components
contributing positively,” said Ataman Ozyildirim, Senior Director of Economic
Research at The Conference Board. “The Leading Index’s overall upward trend,
which started with the end of the pandemic-induced recession in April 2020, is
consistent with strong economic growth in the second half of the year. While
the Delta variant and/or rising inflation fears could create headwinds for the
US economy in the near term, we expect real GDP growth for 2021 to reach 6.0
percent year-over-year, before easing to a still robust 4.0 percent growth rate
for 2022.” Press release at...
https://conference-board.org/data/bcicountry.cfm?cid=1
JOBLESS CLAIMS (Yahoo Finance)
“Initial unemployment claims fell further last week to the
lowest level since March 2020, bringing the level of weekly new filings closer
to pre-virus levels... Initial unemployment claims, week ended August 14: 348,000
vs. 364,000 expected...” Story at...
https://finance.yahoo.com/news/weekly-jobless-claims-week-ended-august-14-2021-181609988.html
PHILADELPHIA FED INDEX (Advisor Perspectives)
“The latest Manufacturing Index came in at 19.4, down 2.5
from last month's 21.9...Since this is a diffusion index, negative readings
indicate contraction, positive ones indicate expansion...‘Most future indexes
moderated this month but continue to indicate that the firms expect growth over
the next six months.’” Commentary at...
MARKET NOT RUNNING ON ALL CYLINDERS (Heritage Capital)
“...Now, just because I keep writing about all these
warnings doesn’t mean Armageddon is upon us. It is entirely possible that the
stock market can explode higher from here and correct many, most or all of the
warnings. I don’t think that’s the likely scenario, but it is a possible... I
will continue to buy weakness and sell strength as best I can until proven
otherwise.” Commentary at...
https://investfortomorrow.com/blog/market-not-running-on-all-cylinders/
EDUCATION DEPT CANCELS STUDENT DEBT - THE GIVEAWAYS
CONTINUE (CNBC)
“The U.S. Department of Education announced on Thursday it will cancel $5.8 billion in
student debt for more than 320,000 borrowers [on average, 18,000 per person]....The
Education Department under the Biden administration has also canceled the
student debt for thousands of students who attended for-profit schools...“You
don’t need Congress,” Sen. Majority Leader Chuck Schumer, D-N.Y., has said.
“All you need is the flick of a pen.” Story at...
My cmt: I spent 35-years in government managing programs.
To spend even 1 dollar, it takes 2 acts of Congress: (1) An authorizing bill;
(2) an appropriations bill. How the Education Department can cancel Billions of
dollars in Debt is beyond me.
CYBER EXPERT PROVES LINDELL WRONG – DEMANDS $5 MILLION
REWARD (msn.com)
“Lindell [Mike Lindell, My Pillow, CEO] has long claimed to be in possession of a large set of network data from
the 2020 election, saved as packet captures, or .pcap files. He's even
claimed that it contained every vote cast last November. Not so, says
Alderson [Bill Alderson, Republican & longtime cybersecurity expert]. It
took roughly 45 minutes for him to see that the data given to him and the
dozens of other experts in attendance was bunk — not only did it fail to prove
anything about the accuracy of the 2020 election, but the files weren't
even in the right format. "P-CAPs adhere to an international
standard," Alderson said.” Story at...
My cmt: Lindell claims his team hacked the data from the
Chinese. Maybe they did. Maybe, this
entire episode is a Chinese set-up and Lindell is the foil. That makes more sense than the possibility that
bad actors faked millions of votes to steal the election from Trump.
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website as
of 7:30 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 01% to 4406.
-VIX rose about 0.5% to 21.67.
-The yield on the 10-year Treasury slipped to 1.246%.
It doesn’t take another Hindenburg Omen to know that
conditions are ripe for a pullback. Today would have created another Omen, but
New-highs have dropped below the threshold. For an Omen to be triggered, both
new-highs and new-lows must be elevated.
Still, internals didn’t look good.
Thursday’s key NYSE market internal data follows: Only 20% of volume was up-volume; only 29% of issues were advancing; 118 issues made new 52-week lows vs. only 47 issues that made new,52-week highs. Utilities outpaced the S&P 500 while the XLI underperformed the Index. Both are bearish signs.
VIX continued its climb and is still giving a bear
signal.
The 50-dMA of stocks advancing on the NYSE was only 48.5%
today. Simply stated, this means that more than half of the issues on the NYSE
have been down over the last 2-1/2 months. Today is the third day in a row that
the 50-dMA has been below 50% advancing issues. For me that is a definition of
a pullback.
The daily sum of 20 Indicators declined from -12 to -13
(a positive number is bullish; negatives are bearish); the 10-day smoothed sum
that smooths the daily fluctuations slipped from -40 to -48. (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, but the VIX indicator continued its bear indication. VIX is one
of my better indicators and a negative VIX indication is not a good sign.
Price, Volume & Sentiment are neutral; VIX is bearish.
So, we have a lot of bear
indications. To me it looks like we’re going to have a pullback of some kind,
probably less than 10% down. I’ll be
looking for a reversal though; Mr. Market doesn’t always agree with indicators,
no matter who owns them.
I sold my XLK position this
morning. I’ll pick up a new momentum
play as soon as indicators improve enough to convince me that markets are
headed up.
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 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.
My stock-allocation is about 45%
invested in stocks. I am bearish and 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.
