“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
“While the verdict in Kenosha will leave many Americans
feeling angry and concerned, myself included, we must acknowledge that the jury
has spoken.” - President, Joe Biden
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website
as of 6:15 PM Friday. 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.
New cases are clearly heading higher...
MARKET REPORT / ANALYSIS
-Friday the S&P 500 slipped about 0.1% to 4698.
-VIX rose about 2% to 17.91.
-The yield on the 10-year Treasury was slipped to 1.549%.
The Friday run-down of some important indicators has
reversed sharply to the bear side (15-bear and 5-bull) since last week. These
indicators tend to be both long-term and short-term, so they are different than
the 20 that I report on daily. Details follow:
BULL SIGNS
-The 50-dMA % of issues advancing on the NYSE (Breadth)
is above 50%.
-The 100-dMA % of issues advancing on the NYSE
(Breadth) is above 50%.
-The 5-10-20 Timer System is BUY; the 5-dEMA and 10-dEMA
are both above the 20-dEMA.
-Slope of the 40-dMA of New-highs is up, but just barely.
This is one of my favorite trend indicators.
-The size of up-moves has been larger than the size of
down-moves over the last month.
NEUTRAL
-VIX is rising but not enough to give a signal.
-There have been 14 up-days over the last 20 sessions – Neutral.
-There have been 5 up-days over the last 10-sessions –
Neutral.
-Non-crash Sentiment indicator is very bearish, but not
enough to send a bullish signal.
-There have been 3 Statistically-Significant days in the
last 15-days – too low to send a signal. This can be a bull or bear.
-Bollinger Bands
-The S&P 500 is 9.9% above its 200-dMA (Bear
indicator is 12%.). This value was 15.9% above the 200-dMA when the 10%
correction occurred in Sep 2020.
-The Fosback High-Low Logic Index is neutral.
-Statistically, the S&P 500 gave a panic-signal 17
Sept. Signal has expired.
-3 November, the 52-week, New-high/new-low ratio improved
by 0.91 standard deviations, somewhat bullish, but Neutral.
-Overbought/Oversold Index (Advance/Decline Ratio) is Neutral.
-RSI was overbought (>80) for almost 3 weeks. Now, it
is high but neutral.
-The S&P 500 had a Distribution Day 10 November, but
it’s only 1 – Neutral.
-The S&P 500 is out-performing the Utilities ETF
(XLU), but the trend is falling sharply – call it neutral for now.
BEAR SIGNS
-The 10-dMA % of issues advancing on the NYSE
(Breadth) is below 50%.
-McClellan Oscillator.
-Cyclical Industrials (XLI-ETF) are under-performing the
S&P 500.
-Long-term new-high/new-lows are falling.
-Short-term new-high/new-low data is falling.
-The Calm-before-the-Storm Indicator is warning.
-MACD of the percentage of issues advancing on the NYSE
(breadth) made a bearish crossover 11 November.
-MACD of S&P 500 price made a bearish crossover, 15
November.
-My Money Trend indicator is falling.
-The smoothed advancing volume on the NYSE is falling.
-There have been Hindenburg Omen signals 17-19 November.
-Breadth on the NYSE compared to the S&P 500 index.
-The Smart Money (late-day action) is falling. (This
indicator is based on the Smart Money Indicator developed by Don Hayes).
-2.7% of all issues traded on the NYSE made new, 52-week
highs when the S&P 500 made a new all-time-high, 16 November. (There is no
bullish signal for this indicator.) This is bearish.
-45% of the 15-ETFs that I track have been up over the
last 10-days.
On Friday, 21 February, 2 days after the top of the
Coronavirus pullback, there were 10 bear-signs and 1 bull-sign. Now there
are 15 bear-signs and 5 bull-signs. Last week, there were 3 bear-signs and 13
bull-signs.
There is 1 topping indicator issuing a warning: Breadth (issues
advancing) on the NYSE vs. the S&P 500 shows bearish divergence.
The daily sum of 20 Indicators declined from -8 to -12 (a
positive number is bullish; negatives are bearish); the 10-day smoothed sum
that smooths the daily fluctuations declined from -11 to -30 (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; VIX, Volume & Sentiment are
neutral.
Still looks like markets are
in a pullback. I expect It to be relatively small, but at least one indicator
is warning that may not be the case. If investors start worrying about
inflation, markets could get rattled.
Inflation? Now the Covid data
is starting to be a worry.
I am bearish in the short-term
based on today’s indicator run-down. In the long-term, it seems unlikely that a
major crash is coming soon, but it is not impossible.
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
FRIDAY MARKET INTERNALS
(NYSE DATA)
Market Internals remained SELL.
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.
I did take profits in the
Energy ETF (XLE) and Salesforce (CRM).
This has temporarily dropped my stock allocation. I’ll be a buyer as soon as we can see an end
to the current weakness in indicators.
My stock-allocation in the
portfolio is now about 35%
invested in stocks; this is well below my “normal” fully invested stock-allocation and is probably overly conservative.
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.
