“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.
DO OIL SPIKES GUARANTEE A RECESSION? – NO. (Ciovacco
Capital)
The S&P 500 gained (on average) 11.3% in years the
Oil price spiked (on average) 86%.
Chart from...
https://www.youtube.com/watch?v=WQY37sg8ZPw
NO, GREEDY CORPORATIONS ARE NOT CAUSING INFLATION (RIA)
“Greedy corporations are not causing inflation. Such is
despite the claims of many of those on the political left that failed to
understand the very basics of economic supply and demand...
‘One simply has to reason through the claim to uncover the
absurdity. If corporations can willy-nilly raise prices and enjoy “excessive”
profits, why don’t they do it all the time? Did corporations suddenly get
greedy in 2021? And why did the Federal Reserve spend a decade fretting about
inflation being ‘too low’ as it struggled to hit its 2% target? Was there not
enough corporate greed before coronavirus?” – Michael Maharrey, ShiffGold.com...
‘...It [inflation] is always and everywhere a result of too
much money, of a more rapid increase of money, than of output. Moreover, in the
modern era, the important next step is to recognize that today the governments
control the quantity of money so that, as a result, inflation in the United
States is made in Washington and nowhere else...’ – Milton Friedman, Nobel
Prize Winner in Economics.
Commentary at...
https://realinvestmentadvice.com/no-greedy-corporations-arent-causing-inflation/
My cmt: Unfortunately, now we not only have too much
money floating around, courtesy of the FED and Congress’ $2-trillion “Stimulus”
after lock-downs ended, we have too few workers (the “Great Resignation”) and
supply-chain issues – A Trifecta inflation disaster.
MARKET REPORT / ANALYSIS
-Monday the S&P 500 fell about 3% to 4201.
-VIX rose about 14% to 36.45.
-The yield on the 10-year Treasury slipped to 1.784%.
Pullback Data:
Days since top: 43 (Avg= 30 days top to bottom for
corrections <10%; 60 days top to bottom for larger, non-crash pullbacks)
Drop from Top: Now 12.4% at close. Max at close: 12.4%
(Avg.= 13% for non-crash pullbacks)
The S&P 500 is 5.9% below its 200-dMA & 7.1%
below its 50-dMA.
The slope of the 200-dMA is up, but only by a whisker. (The
S&P 500 isn’t there yet, but a falling 200-dMA is very bearish.)
Monday the S&P 500 made a new-low on the highest
volume of the correction so far. That previous high-volume for the correction
was on 24 January, a full month before the Index made its first bottom.
Today was a statistically significant down-day. That just
means that the price-volume move exceeded my statistical parameters. Statistics
show that a statistically-significant, down-day is followed by an up-day about
60% of the time. Could today be the
final bottom of the correction?
Sure, but todays’ move did not trigger my panic indicator
that can sometimes indicate a bottom.
More to the point, the high-volume is a sign of more panic-selling.
Higher volumes are a sign of more fear.
We want to see less fear (or at least an exhaustion of selling) to make
a bottom and that would be signaled by lower volume at a new-low. If today was
a washout of sellers, a retest of the low would probably occur on much less
volume giving us a chance to make a bottom. I should note, though, today’s
volume is about the same as we have seen before and the correction did not end then.
Monday was another Distribution Day, but there still have
been only 3 since the last Follow-Thru Day and that is not enough to give us a
signal. Distribution Days signal institutional selling.
The daily sum of 20 Indicators slipped from +5 to +4 (a
positive number is bullish; negatives are bearish); the 10-day smoothed sum
that smooths the daily fluctuations improved from +19 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. Long-term indicators improved too.
The Long Term NTSM indicator
ensemble remained HOLD, but leaning bearish. VIX & Volume are bearish;
Sentiment is Neutral; PRICE is bullish and the New-High/New-Low
change-in-spread indicator is bullish based on the 25 Feb swing in
new-high/new-low data.
We got the re-test today, but it was not a successful
test; volumes and internals suggest that this is not the bottom. The good news
is that it could happen soon. We could have a retest Tuesday on lower volume
that would signal a bottom. That’s not a prediction – it’s just a possibility.
All we can do is watch the market action.
I am reminded that markets rarely bottom on a Friday. They
typically give participants over the weekend to brood about their losses and
then they show up the next Monday in “sell mode” leading to Turning Tuesday. We’ll
see...
...But 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.
*For additional background on the ETF ranking system see NTSM Page at…
http://navigatethestockmarket.blogspot.com/p/exchange-traded-funds-etf-ranking.html
TRADING POSITIONS: I re-established
a position in the XLE ETF last Tuesday.
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.
For more details, see NTSM Page at…
https://navigatethestockmarket.blogspot.com/p/a-system-for-trading-dow-30-stocks-my_8.html
MONDAY 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 40% 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.
