“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
PRODUCER PRICE INDEX (FOXnews)
“Producer prices
accelerated at the fastest annual pace on record in July as
supply chain disruptions and materials shortages continued to put upward
pressure on costs. The producer price index for final demand increased at a
7.8% pace for the 12 months ended July, according to the Labor Department.”
Story at...
https://www.foxbusiness.com/markets/producer-price-index-july-2021
JOBLESS CLAIMS (YahooFinance)
“New weekly jobless claims took another step lower last
week, with the labor market's recovery still making headway despite the
lingering threat of the Delta variant... Initial unemployment claims, week ended August 7: 375,000
vs. 375,000 expected...” Story at...
https://finance.yahoo.com/news/weekly-jobless-claims-week-ended-august-7-2021-183650493.html
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website as
of 6:30 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 0.3% to 4461.
-VIX dropped about 3% to 15.59.
-The yield on the 10-year Treasury rose to 1.362%.
The S&P 500 made another new, all-time high today. 4.9%
of all issues traded on the NYSE made new, 52-week highs today. This is below
average, but not low enough to send a bear signal.
One stat I don’t like right now is that the 40-dMA of new
52-week highs is declining. That’s a
good trend indicator and since we see some significant divergence (compared to
the S&P 500), it suggests (but doesn’t guarantee) some downside ahead for
the S&P 500.
The daily sum of 20 Indicators dropped from -1 to -4 (a
positive number is bullish; negatives are bearish); the 10-day smoothed sum
that smooths the daily fluctuations slipped from -25 to -26. (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
I need to sell AXP. It has not
perfrmed well and si not among the top 3 in momentum.
THURSDAY MARKET INTERNALS
(NYSE DATA)
Market Internals declined, but 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.
