“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.
NFIB SMALL BUSINES OPTIMISM (US News)
“More than two-thirds of small businesses reported higher
average selling prices while more than a quarter say inflation is their No. 1
problem, according to the latest monthly survey from the National Federation of
Independent Business. The NFIB small business optimism index fell 1.4 points to
95.7, the second consecutive month it has been below the 48-year average of 98.”
Story at...
https://www.usnews.com/news/economy/articles/2022-03-08/small-businesses-grapple-with-inflation
UKRAINIANS FIND RELATIVES IN RUSSIA DON’T BELIEVE IT’S A
WAR (NY Times)
“As Ukrainians deal with the devastation of the Russian
attacks in their homeland, many are also encountering a confounding
and almost surreal backlash from family members in Russia, who refuse to
believe that Russian soldiers could bomb innocent people, or even that a war is
taking place at all. These relatives have essentially bought into the official
Kremlin position: that President Vladimir V.
Putin’s army is conducting a limited “special military operation”
with the honorable mission of “de-Nazifying” Ukraine.” Story at....
https://www.nytimes.com/2022/03/06/world/europe/ukraine-russia-families.html
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 fell about 0.7% to 4171.
-VIX dipped about 4% to 35.13. (The Options Crowd bucked
the trend today.)
-The yield on the 10-year Treasury rose to 1.848%.
Pullback Data:
Days since top: 44 (Avg= 30 days top to bottom for
corrections <10%; 60 days top to bottom for larger, non-crash pullbacks)
Drop from Top: Now 13% at close. Max at close: 13% (Avg.=
13% for non-crash pullbacks)
The S&P 500 is 6.6% below its 200-dMA & 7.5%
below its 50-dMA.
The slope of the 200-dMA is up, but only by a slim whisker.
(The S&P 500 isn’t there yet, but a falling 200-dMA is very bearish.)
Volume was higher Tuesday, and Tuesday, the S&P 500 made
a new-low on the highest volume of the correction so far. I can keep this
simple; no bottom yet. The explanation is the same as yesterday’s blog.
The daily sum of 20 Indicators slipped from +4 to +1 (a
positive number is bullish; negatives are bearish); the 10-day smoothed sum
that smooths the daily fluctuations improved from +27 to +35 (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 slipped to SELL. VIX & Volume are bearish; SENTIMENT & PRICE are
neutral. The Sell-signal isn’t
meaningful now. It is telling us market
conditions are poor, as if we didn’t already know. The important sell-signal was 8 days after
the start of this correction.
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
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 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.
