“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.
“You cannot beat a roulette table unless you steal money
when the dealer isn’t looking”.– Albert Einstein
CONSUMER CONFIDENCE (Conference Board)
“The Conference Board Consumer Confidence Index® increased
slightly in March, after a decrease in February. The Index now stands at 107.2
(1985=100), up from 105.7 in February... consumer confidence continues to be
supported by strong employment growth and thus has been holding up remarkably
well despite geopolitical uncertainties and expectations for inflation over the
next 12 months reaching 7.9 percent—an all-time high. However, these headwinds
are expected to persist in the short term and may potentially dampen confidence
as well as cool spending further in the months ahead.” Press release at...
https://www.conference-board.org/topics/consumer-confidence
JOLTS – JOB OPENINGS (BLS)
“The number of job openings was little changed at 11.3
million on the last business day of February, the U.S. Bureau of Labor
Statistics reported today. Hires edged up to 6.7 million while total
separations were little changed at 6.1 million. Within separations, the quits
rate was little changed at 2.9 percent and the layoffs and discharges rate was
unchanged at 0.9 percent.” Press release at...
https://www.bls.gov/news.release/pdf/jolts.pdf
As of February 2022, there are 6.3 million unemployed
persons, so there are nearly 2 jobs for each of those unemployed.
QUIT WHILE YOU’RE AHEAD (Hussman Funds)
“From the perspective of our own value-conscious,
historically-informed, full-cycle investment discipline, valuations do not
provide an environment for “intelligent investment” here, nor do market
internals provide an environment for “intelligent speculation.” Aside from very
minor tactical shifts, the main opportunity that investors have in the current
environment is the opportunity for baseless gambling...for investors who insist
on playing anyway, the last useful resort is to follow the advice of Baltasar
Gracián y Morales: “Quit while you’re ahead. All the best gamblers do.” – John
Hussman, PhD. Commentary at...
https://www.hussmanfunds.com/comment/mc220325/
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 rose about 1.2% to 4631.
-VIX fell about 4% to 18.90.
-The yield on the 10-year Treasury slipped to 2.401%.
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: 59 (Avg= 30 days top to bottom for
corrections <10%; 60 days top to bottom for larger, non-crash pullbacks)
Drop from Top: Now 3.4%. Max at close: 13%
The S&P 500 is 3.4% ABOVE its 200-dMA & 5% ABOVE
its 50-dMA. (Yes, the Death Cross is still in effect. The 50-dMA is below the 200-dMA. It looks
like the spread between the 200-dMA and the 50-dMA has reached its maximum.
From here, the spread should begin to decrease and lead to a bullish “Golden Cross”.
If it doesn’t, the stock market is in trouble.
TODAY’S COMMENT:
Not much change from yesterday...RSI (Relative Strength
Index) is nearly overbought. Bollinger Bands are close to overbought, but not
there yet. The S&P 500 has been up 8 days out of the last 10. That is close to an overbought indication
too. The Fosback Hi-Lo Logic Index (see Friday’s blog) continues to creep
towards a sell signal that Fosback said predicted a “crash”.
Currently, none of my top-indicators are warning of a
top.
The daily sum of 20 Indicators improved from +15 to +16
(a positive number is bullish; negatives are bearish); the 10-day smoothed sum
that smooths the daily fluctuations improved from +108 to +124 (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 was hold.
I remain a Bull; but I am a cautious-Bull. There is a
crash coming; 2022...2023? I don’t know, but it is probably sooner than most
expect.
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.
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.
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 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.
