“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.
HOUSING STARTS (Yahoo Fiance)
“New U.S. home construction rebounded in February to the
strongest pace since 2006, suggesting builders had greater success navigating
material and labor constraints in the month. Residential starts increased 6.8%
last month...” Story at...
https://finance.yahoo.com/news/housing-starts-u-rebound-fastest-125322806.html
JOBLESS CLAIMS (ABC News)
“Fewer Americans applied for unemployment benefits last
week as layoffs continue to fall amid a strong job market rebound. Jobless
claims fell by 15,000 to 214,000 for the week ending March 12, down from the
previous week's 229,000...” Story at...
https://abcnews.go.com/Business/wireStory/fewer-americans-file-jobless-claims-week-83501073
PHILADELPHIA FED INDEX (FxStreet)
“According to a report from the Federal
Reserve Bank of Philadelphia released on Thursday, the headline
Manufacturing Activity Index of the Manufacturing Business Outlook Survey
rose to 27.4 in March from 16.0 in February. That was
significantly better than the expected decline to 15.0.” From...
INDUSTRIAL PRODUCTION (RTT News)
“Industrial production in the U.S. increased in line with
economist estimates in the month of February, according to a report released by
the Federal Reserve on Thursday. The report showed industrial production rose
by 0.5 percent in February...” Story at...
CHARTS SAY BOTTOM ISN’T IN (CNBC)
“Legendary chartist Tom DeMark thinks key U.S. stock
market indexes could be days away from reaching a bottom, CNBC’s Jim Cramer
said Wednesday. ‘We’ll be in some more pain before we get there,” Cramer
cautioned, as he broke down analysis from DeMark and his team...’” Story at...
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 rose about 1.2% to 4411 (defying
my prediction that we wouldn’t see another 1%+ day.).
-VIX fell about 4% to 25.67.
-The yield on the 10-year Treasury dipped to 2.177%.
Pullback Data:
Days since top: 51 (Avg= 30 days top to bottom for
corrections <10%; 60 days top to bottom for larger, non-crash pullbacks)
Drop from Top: Now 8% at close. Max at close: 13% (Avg.=
13% for non-crash pullbacks)
The S&P 500 is 1.3% below its 200-dMA & 0.6%
below its 50-dMA.
TODAY’S COMMENT:
I forgot to mention it yesterday, but Wednesday was a
Statistically Significant up-day. That just means that the price-volume move
exceeded my statistical parameters. Statistics show that a
statistically-significant, up-day is followed by a down-day about 60% of the
time. So, there was good probability of
a down-day Thursday. That didn’t happen, but today (Thursday) the S&P 500
closed at its upper trend line. Given
the big move higher yesterday and the close at the trend line today, the likely
move from here is down.
We also had extremely high unchanged-volume today. Recently, high unchanged-volume has indicated
a reversal of some kind, either now, or near future. The theory is that this
shows investor confusion. My problem is that it is frequently a false signal.
At this point, if the indicator is sending a decent signal, the direction of
reversal would be down.
We still have the bearish Death Cross on the S&P
500. It would be a bullish sign if the
50-dMA would get back above the 200-dMA and kill the Death Cross. Also, the
S&P 500 is not far below the 50-dMA and a cross there would be bullish,
too.
While I have seen improvement
in indicators, new-lows still are out pacing new-highs and that’s not encouraging
for the bulls. There are plenty of other Bear-signs, too. We didn’t see high
up-volume today; the trend is still down, etc. Given the other bearish indicators,
I remain a bear until conditions improve.
For the here and now, Friday
is Options Expiration so who knows where markets will finish tomorrow.
The daily sum of 20 Indicators improved from +1 to +10 (a
positive number is bullish; negatives are bearish); the 10-day smoothed sum
that smooths the daily fluctuations improved from +27 to +32 (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, VOLUME & SENTIMENT are neutral. PRICE is bullish.
Again: 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.
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.
https://navigatethestockmarket.blogspot.com/p/a-system-for-trading-dow-30-stocks-my_8.html
THURSDAY 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.
