“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
“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
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website as of 5:00 PM Tuesday. 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. I added the smoothed 10-dMA of new cases (in purple) to the chart.
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 rose about 0.4% to 4631.
-VIX dipped about 2% to 16.03.
-The yield on the 10-year Treasury dipped to 1.553%.
5.8% of all issues traded on the NYSE made new, 52-week
highs when the S&P 500 made a new all-time-high today. This is below the
average for all-time highs, but it’s high enough so that it indicates decent
breadth in the advance.
The Fed meeting started today and that often creates
some angst for investors as they worry about what the FED may say. I wouldn’t
be surprised to see a down-day tomorrow.
We also note that declining shares outpaced advancing
shares and declining volume outpaced advancing volume. The S&P 500 usually
follows the majority so that is another indication of a down-day tomorrow.
There are 2 topping warnings now in effect: RSI remains
overbought; and Breadth vs. the S&P 500 is suggesting that the S&P 500
is too far ahead of the % of issues advancing on the NYSE. That’s not enough
indicators to issue a sell signal. (Of course, the S&P 500 can have a top
without a warning.)
The daily sum of 20 Indicators declined from +4 to +2 (a
positive number is bullish; negatives are bearish); the 10-day smoothed sum
that smooths the daily fluctuations declined from +8 to +4. (These numbers
sometimes change after I post the blog based on data that comes in late.) Most
of these indicators are short-term so they tend to bounce around a lot.
The Long Term NTSM indicator ensemble
slipped to HOLD. Price is bullish; Volume, Sentiment and VIX indicators are
neutral. The indicator is an eyelash from BUY.
I remain 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
TUESDAY MARKET INTERNALS (NYSE
DATA)
Market Internals remained BUY.
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.
My stock-allocation in the
portfolio is now about 65% invested in stocks; this is above my “normal” fully
invested stock-allocation of 50% stocks. Indicators are very bullish, so I am
holding a short-term position in additional Index Funds to boost returns.
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 general rule, some
suggest that the % of portfolio invested in the stock market should be one’s
age subtracted from 100. So, a
30-year-old person would have 70% of the portfolio in stocks, stock mutual
funds and/or stock ETFs. That’s ok, but
for older investors, I usually don’t recommend keeping less than 50% invested
in stocks (as a fully invested position) since most people need some growth in
the portfolio to keep up with inflation.
