“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
OFF TOPIC: As an old Folkie, I was very sorry to see this news. Nancy
Griffith passed away.
https://www.theguardian.com/music/2021/aug/13/nancy-griffith-grammy-winning-folk-artist-dies-at-68
I always loved her music and especially her recording of
“From a Distance”. It was recorded
before Bette Midler’s hit record. My
favorite version was on her live “One Fair Summer Evening” recording. It’s less
produced and more profound. Given today’s troubles, maybe we should all take
this song to heart.
https://www.youtube.com/watch?v=KCzORgC1NpM
RECORD REVENUE FOR S&P 500 COMPANIES (FACTSET)
“As
of today, [Friday, 13 Aug] 91% of the companies in the S&P 500 have
reported actual revenue numbers for the second quarter. Of these companies, 87%
reported actual revenues above the mean revenue estimate and 13% reported
actual revenues below the mean revenue estimate...The second quarter will mark
the highest percentage of S&P 500 companies reporting revenues above
estimates for a quarter since FactSet began tracking this metric in 2008.”
Commentary/analysis at...
WHERE THERE’S FIRE THERE’S SMOKE (Felder report – 11
August)
“As has been widely reported, stock market breadth has
been showing signs of deterioration again recently. Specifically, a total of 10
Hindenburg Omens have triggered on the Nasdaq over the past six months, a level
that has regularly warned of significant stock market turbulence ahead. Of
course, this is only a single indicator and, as such, has limited value in the
context of a complex system like the stock market. But due to the success of
its track record in forecasting equity weakness, investors ought to consider just
how much general market risk they’re comfortable taking on at present.” Story at...
https://thefelderreport.com/2021/08/11/where-theres-fire-theres-smoke/
My cmt: I don’t track Hindenburg Omens on the NASDAQ, but
I do calculate them for the S&P 500. There have been only 3 Hindenburg
Omens in 2021 on the S&P 500 and none are in effect now.
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website as
of 5:30 PM Monday. 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
-Monday the S&P 500 rose about 0.3% to 4480.
-VIX rose about 4% to 16.12.
-The yield on the 10-year Treasury dropped to 1.276%.
4.4% of all issues traded on the NYSE made new, 52-week
highs when the S&P 500 made a new all-time-high today, 16 August. This % of
new-highs is below average, but not low enough to send a bear signal. I
continue to watch this stat.
After 5 straight, up-days we are due for a down-day. I’ll
be very surprised if Tuesday is positive.
Volume picked up today and was only about 10% below the
monthly average. That’s good since a huge drop off in volume, like Friday’s, is
worrisome.
The daily sum of 20 Indicators improved from -4 to -2 (a
positive number is bullish; negatives are bearish); the 10-day smoothed sum
that smooths the daily fluctuations slipped from -29 to -32. (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 improved
to BUY. Price and VIX are bullish; Volume & Sentiment are neutral. At this
point, the signal won’t change my %-invested, since I am already fully invested.
This indicator is designed to give a Buy-indication after a bottom. Since we are at another all-time, high on the S&P 500,
the long-term indicator Buy-signal is not all that useful. It does show that conditions
are currently bullish, but as noted above, we are expecting a down-day tomorrow.
Utilities are now outpacing
the S&P 500 over the last 2 months.
That’s a bearish sign. I don’t see enough other bear-signs to panic, yet,
but it’s a concern.
I still 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
MONDAY 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.
