“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
“Faced with a combination of record speculative extremes
and deteriorating speculative conditions, investors may want to remember that
the best time to panic is before everyone else does.” – John Hussman, Phd.
FOMC RATE DECISION (Yahoo Finance)
“The Federal Reserve on Wednesday raised short-term
interest rates for the first time since 2018, as high inflation pushes the
central bank to pull back on its extraordinary pandemic-era support.
The U.S. central bank lifted its benchmark Federal Funds
Rate by 0.25%, to a target range of between 0.25% and 0.50%...Projections
released by the policy-setting Federal Open Market Committee signal the
likelihood of the Fed raising rates up to six more times this...That path is
more aggressive than the Fed’s last round of projections (from December), when
it predicted only three total rate hikes in 2022.” Story at...
https://finance.yahoo.com/news/fed-fomc-monetary-policy-decision-march-2022-131719859.html
RETAIL SALES (ABC News)
“After beginning the year in a buying mood, Americans
slowed their spending in February on gadgets, home furnishings and other
discretionary items as higher prices for food, gasoline, and shelter are taking
a bigger bite out of their wallet... Retail sales increased 0.3%...persistent
inflation is dangerous for retailers because it will mean shoppers will once
again consolidate their spending and spread it to just a few players, reversing
the trend where many retailers in the last year or so saw their sales increase.”
Story at...
https://abcnews.go.com/US/wireStory/retail-sales-03-february-amid-higher-prices-83477495
EIA CRUDE OIL INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those
in the Strategic Petroleum Reserve) increased by 4.3 million barrels from the
previous week. At 415.9 million barrels, U.S. crude oil inventories are about
12% below the five-year average for this time of year.” Report at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf
An increase in inventories suggests a drop in
demand. Here’s a piece on that
subject...
CHINA LOCKDOWNS MAY DERAIL OIL DEMAND (OilPrice.com)
“Traffic in several major cities in China has dropped
considerably since the authorities imposed this weekend new regional lockdowns
as part of the zero-COVID policy. The decline in traffic in Shanghai and
Shenzhen has market participants and analysts concerned about the potential
threat to oil demand in the world’s largest crude oil importer.” Story at...
https://oilprice.com/Energy/Crude-Oil/New-Lockdowns-In-China-Could-Derail-Oil-Demand-Growth.html
Oil was down again today.
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 jumped up about 2.2% to 4358.
-VIX fell about 11% to 26.67.
-The yield on the 10-year Treasury rose to 2.196%.
Pullback Data:
Days since top: 50 (Avg= 30 days top to bottom for
corrections <10%; 60 days top to bottom for larger, non-crash pullbacks)
Drop from Top: Now 9.1% at close. Max at close: 13%
(Avg.= 13% for non-crash pullbacks)
The S&P 500 is 2.5% below its 200-dMA & 2% below
its 50-dMA.
TODAY’S COMMENT:
I still think this is a bounce
in a downturn, so I am still a bear. The bounce could still go a little higher,
but I’d be surprised if we see another 1%+ increase in price.
Wednesday, there was very high
up-volume. If Thursday has up-volume
greater than 80%, I might turn more bullish.
For the second day, there was
weakness in energy and utilities. Both are bullish for the stock market if the
trend continues, but I think Utility weakness is more of a market
indicator. Falling Oil prices may be
indicating falling demand and that suggests worries over a slowing economy.
We still have the bearish Death Cross on the S&P
500.
The daily sum of 20 Indicators improved from zero to +1
(a positive number is bullish; negatives are bearish); the 10-day smoothed sum
that smooths the daily fluctuations declined from +34 to +27 (The trend
direction is more important than the actual number for the 10-day value.) 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 remained HOLD. VIX is bearish; VOLUME & SENTIMENT are
neutral. PRICE is bullish.
Until we see more bullish signs, I remain bearish.
BEST ETFs - 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.
UNTIL OIL PRICES START RISING
AGAIN, I WOULDN’T BE IN THE ENERGY-ETF (XLE).
http://navigatethestockmarket.blogspot.com/p/exchange-traded-funds-etf-ranking.html
BEST DOW STOCKS - TODAY’S MOMENTUM
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.
UNTIL OIL PRICES START RISING
AGAIN, I WOULDN’T BE IN CHEVRON (CVX).
https://navigatethestockmarket.blogspot.com/p/a-system-for-trading-dow-30-stocks-my_8.html
WEDNESDAY MARKET INTERNALS (NYSE
DATA)
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.
After my sale of XLE
(Energy-ETF) Tuesday, my stock-allocation in the portfolio is now about 30%
invested in stocks. This is below my “normal” fully invested stock-allocation
of 50%.
I trade about 15-20% of the
total portfolio using the momentum-based analysis I provide here. If I can see
a definitive bottom, I’ll add a lot more stocks to the portfolio using an
S&P 500 ETF.
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.
