“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.
DURABLE ORDERS (Fox Business)
“Orders at U.S. factories for long-lasting goods fell
more than expected in February, snapping a months-long streak of increases and
business investment as manufacturers confronted a worsening supply-chain
crisis. Bookings for all durable goods – products that are intended to
last at least three years – fell 2.2%...” Story at...
https://www.foxbusiness.com/economy/us-durable-goods-orders-february-decline
JOBLESS CLAIMS (Yahoo Finance)
“U.S. jobless claims set a more than 50-year low last
week as the red-hot labor market shows few signs of cooling in the near-term...Initial jobless claims, week ended March
19: 187,000 vs. 210,000
expected...” Story at...
https://finance.yahoo.com/news/weekly-jobless-claims-week-ended-march-19-2022-183206198.html
IHS MARKIT MANUFACTURING PMI (Fx Street)
“Activity growth in the US manufacturing sector
accelerated in March, according to the preliminary version of IHS
Markit's PMI survey.
The "flash" headline Manufacturing PMI rose to 58.5 in March from
57.3 a month earlier, and was above the expected drop to 56.3. Service sector
growth was also stronger than expected...” Story at...
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 rose about 1.4% to 4520.
-VIX rose about 8% to 23.57.
-The yield on the 10-year Treasury rose to 2.375%.
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: 56 (Avg= 30 days top to bottom for
corrections <10%; 60 days top to bottom for larger, non-crash pullbacks)
Drop from Top: Now 5.8%. Max at close: 13%
The S&P 500 is 1% ABOVE its 200-dMA & 2.3% ABOVE
its 50-dMA.
TODAY’S COMMENT:
Thursday, the S&P 500 closed above its 200-dMA and
did it rather convincingly by moving up all-day and closing at the high. The
CNBC talking heads are still conflicted with many calling for a new correction low. That may happen, but, in my opinion, not
before the S&P 500 makes a new high. Indicators appear too strong for a major
reversal down in the near term.
The daily sum of 20 Indicators slipped from +12 to +11 (a
positive number is bullish; negatives are bearish); the 10-day smoothed sum
that smooths the daily fluctuations improved from +71 to +74 (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 & are Bullish; SENTIMENT slipped
to hold. This is not surprising. It
doesn’t take long for Rydex traders to reverse their shorts and get long.
I remain 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
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.
My stock-allocation in the
portfolio is now about 60% 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.
