“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.
PPI (UPI)
“Sparked by rises in food and energy costs, the producer
price index increased to a seasonally adjusted 1.4% in March and unadjusted
11.2% over the past 12 months, both the largest increases since the index was
calculated in 2010.” Story at...
https://www.upi.com/Top_News/US/2022/04/13/producer-prices-index-PPI-March/9561649859341/
EIA CRUDE INVENTORIES (EIA)
"U.S. commercial crude oil inventories (excluding those in
the Strategic Petroleum Reserve) increased by 9.4 million barrels from the
previous week. At 421.8 million barrels, U.S. crude oil inventories are about
13% below the five-year average for this time of year.” Report at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf
MARKET REPORT / ANALYSIS
Wednesday the S&P 500 rose about 1.1% to 4447.
-VIX slipped about 10% to 21.82.
-The yield on the 10-year Treasury dipped to 2.700%.
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:
If the correction has not ended:
Days since top: 70 (Avg= 60 days top to bottom for
>10% non-crash pullbacks)
Drop from Top: Now 7.3%. Max at close: 13%
The S&P 500 is 1.1% BELOW its 200-dMA & 0.5% ABOVE
its 50-dMA.
*We can’t call the end of the correction until the
S&P 50 makes a new high.
TODAY’S COMMENT:
The S&P 500 has been trying for the past several says
to move higher – indicated by the indices that were higher in the morning, only
to fade later in the day. Wednesday, buyers
moved in and the markets rose all day.
I can’t say whether the move will be a day or two or if
it will have more staying power. So far,
this dip looks like normal profit taking after big gains from the correction bottom.
The S&P 500 hasn’t broken its 50-dMA by much, and today, the Index moved back
above its 50-day.
There was strong up-volume today. If that continues tomorrow, that would be a
bullish sign, too. That would to get me back into the stock market in a more
meaningful way. There were plenty of bear signs out there, but back-to-back, high
up-volume would trump them in the short-term.
Today, the daily sum of 20 Indicators improved from -6 to
-5 (a positive number is bullish; negatives are bearish); the 10-day smoothed
sum that smooths the daily fluctuations declined from -16 to -26 (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 20 indicators are short-term so they tend to bounce
around a lot.
The Long Term NTSM indicator
ensemble is mixed, but remained HOLD: PRICE & VIX are Bullish; VOLUME is
bearish; SENTIMENT is hold.
I am leaning bearish, but maybe not a full-blown Bear yet.
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
WEDNESDAY 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 45% 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.
