“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.
STOCKS SET TO SOAR OVER THE NEXT 12 (Heritage Capital)
“Instead of the three
straight 1%+ rally days I discussed on Friday, we now have four
straight. That has only happened a handful of times and the implications are
very positive over the ensuing year. Let me repeat that it’s over the next 12
months, not 12 hours or 12 days. It’s powerful momentum and that provides a
good backdrop to buy weakness in the range of 4100-4300 on the S&P 500...” –
Paul Schatz, President heritage Capital. Commentary at...
https://investfortomorrow.com/why-heritage/
DRAWDOWN IN NDX STOCKS (McClellan Publications)
“...here is all you have to do to be a stock market
genius - - just know if we are in an OMG bear market, or just an ordinary
Fed-protected occasional dip, and then you can know what to do. The real
world is not that easy. Your mileage may vary. This current
condition is for sure a verifiable oversold condition. And that will
someday matter. But it is not required to matter right now, just because
we notice an oversold condition. That is the trouble with the actual
stock market - - it does not always comport itself in accordance with theory,
or our expectations.” Commentary at,,,
https://www.mcoscillator.com/learning_center/weekly_chart/drawdown_in_ndx_stocks/
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 rose about 1.1% to 4511.
-VIX fell about 3% to 22.94.
-The yield on the 10-year Treasury rose to 2.385%.
I think the correction is over, but not everyone agrees
so I’ll keep the pullback data for a while longer.
PULLBACK DATA:
If the correction has ended:
-Drop from Top: 13% (Avg.= 13% for non-crash pullbacks)
-Days from Top to Bottom: 48-days. (Avg= 30 days top to
bottom for corrections <10%; 60 days top to bottom for larger, non-crash
pullbacks)
Currently:
Days since top: 54 (Avg= 30 days top to bottom for
corrections <10%; 60 days top to bottom for larger, non-crash pullbacks)
Drop from Top: Now 5.9%. Max at close: 13%
The S&P 500 is 0.9% ABOVE its 200-dMA & 2% ABOVE its
50-dMA.
TODAY’S COMMENT:
I am reminded of a comment I read at a trader-board a
while back: The Trader said, “Every major crash has been preceded by a 10%+/-
correction.” That may be what is happening now. I think we’ll go to a new
high. The new high will form the head;
the pre-correction high would form the left shoulder. Will we then get a
bearish head-and-shoulders chart pattern top? We’ll see...
More bullish action today. The slope of the S&P 500,
200-dMA continues to steepen;
The S&P 500 remained above its 200-dMA and pulled
above its 50-dMA - more bullish signs.
The daily sum of 20 Indicators slipped from +16 to +14 (a
positive number is bullish; negatives are bearish); the 10-day smoothed sum
that smooths the daily fluctuations improved from +55 to +68 (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 BUY: PRICE, VOLUME, VIX & SENTIMENT are Bullish.
I am now a Bull.
While the correction seems to be over, the question is,
what will happen when the markets get back to the old highs? I am not
optimistic for this year as a whole.
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
TUESDAY 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.
My stock-allocation in the
portfolio is now about 55% invested in stocks. This is above 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.
