“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 (Bloomberg)
“Orders placed with U.S. factories for durable goods rose
in March, pointing to sustained investment in business equipment that is
helping drive economic growth. Bookings for durable goods -- items meant to
last at least three years -- increased 0.8% in March after a revised 1.7%
decline a month earlier...” Story at...
NEW HOME SALES (Yahoo Finance)
“There were 763,000 new home sales nationwide in March
(SAAR), down 8.6% from February and 12.6% from March 2021, according to the
U.S. Census Bureau.” Story at...
https://finance.yahoo.com/news/march-home-sales-losing-steam-144747385.html
CONSUMER CONFIDENCE (Conference Board)
“The Conference Board Consumer Confidence Index® decreased slightly in April,
after an increase in March...purchasing intentions are down overall from recent
levels as interest rates have begun rising. Meanwhile, concerns about inflation
retreated from an all-time high in March but remained elevated. Looking ahead,
inflation and the war in Ukraine will
continue to pose downside risks to confidence and may further curb consumer
spending this year."
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 fell about 2.8% to 4175.
-VIX rose about 24% to 33.52.
-The yield on the 10-year Treasury dipped to 2.730%.
PULLBACK DATA:
-Drop from Top: 13% as of today, 26 April. (Avg.= 13% for
non-crash pullbacks)
-Days from Top to Bottom: 78-days. (Avg= 30 days top to
bottom for corrections <10%; 60 days top to bottom for larger, non-crash
pullbacks)
The S&P 500 is 7.1% BELOW its 200-dMA & 5.1%
BELOW its 50-dMA.
*We can’t call the end of the correction until the
S&P 500 makes a new high. Today, the S&P 500 tested its prior low. The
correction has not ended.
TODAY’S COMMENT:
Tuesday the S&P 500 was low enough to retest the
prior low. Volume was lower today when compared to the prior lows from April,
but volumes have been increasing this week suggesting more fear. The Index
closed at its low today, so investors were not front-running the markets. If investors thought today was the low, I’d
expect some late-day buying.
When appropriate, I often revisit comments that Jeffrey Saut
made several years ago. He said, “...we could be in one of these “selling
stampedes” that tend to last 17 – 25 sessions, with only 1.5-to three-day
pauses/throwback rallies, before they exhaust themselves on the downside.” We
could be...
Previously, I thought the S&P 500 had made a waterfall
decline early in this correction, as did Lance Roberts. Not everyone else agreed, though, and this current
steep-fall has the look of a waterfall-decline. That will be more likely
if we don’t see a bounce Wednesday or Thursday.
Bottom line: The Index will probably continue its fall. We don’t know how long that will continue, so
stay tuned.
Today, the daily sum of 20 Indicators improved from -6 to
-4 (a positive number is bullish; negatives are bearish); the 10-day smoothed
sum that smooths the daily fluctuations improved from -21 to -18. (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
remained HOLD: VOLUME is bearish; VIX, SENTIMENT & PRICE are hold.
The length of this correction could mean that it will go
much lower to match up with previous long corrections – say 20%? This isn’t a
prediction – just a worry. Only time
will tell...
I remain a Bear.
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
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 35% 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.
