“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.
GDP (CNBC)
“Gross domestic product unexpectedly declined at a 1.4%
annualized pace in the first quarter, marking an abrupt reversal for an economy
coming off its best performance since 1984, the Commerce Department reported
Thursday...“This is noise; not signal. The economy is not falling into
recession,” wrote Ian Shepherdson, chief economist at Pantheon Macroeconomics.”
Story at...
https://www.cnbc.com/2022/04/28/us-q1-gdp-growth.html
As a reminder:
“Gross Domestic Product (GDP). GDP is
simply the total amount of spending in an economy. GDP, as currently measured,
does not distinguish between “good” spending and “bad” spending. GDP does not
distinguish between consumption spending and investment spending. GDP also does
not distinguish whether spending is generated by existing wealth, by going into
debt temporarily, or by going into debt permanently. In this world, every dollar
spent on education or new means of production, is counted the same as every
dollar spent on epic bachelor parties and video games.” – Michael Lebowitz,
Real Investment Advice
JOBLESS CLAIMS (Yahoo Finance)
“Weekly unemployment claims held near their lowest levels
since the 1960s, with a strong labor market and improving levels of
unemployment remaining a bright spot in the U.S. economy... Initial jobless claims, week
ended April 16: 184,000 vs. 180,000 expected...” Story
at...
https://finance.yahoo.com/news/weekly-jobless-claims-week-ended-april-16-2022-182808572.html
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 rose about 2.5% to 4288.
-VIX slipped about 5% to 29.99.
-The yield on the 10-year Treasury slipped to 2.826%.
PULLBACK DATA:
-Drop from Top: 10.6% as of today. 13% max. (Avg.= 13%
for non-crash pullbacks)
-Days from Top to Bottom: 80-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 4.6% BELOW its 200-dMA & 2.3%
BELOW its 50-dMA.
*We can’t call the end of the correction until the
S&P 500 makes a new high. Tuesday, the S&P 500 tested its prior low.
The correction has not ended.
TODAY’S COMMENT:
I mentioned yesterday (Wednesday) that the day had not
been very bullish. There were several
reasons for that conclusion: poor price action saw the Indices fall from
mid-day highs; decliners outpaced advancers; and there were only 17 new-highs
compared to 591 new-lows. Price action suggests to me that markets are trying
to bottom, but maybe I am just being overly optimistic.
Other data says that the bottom is not in yet.
One tell for a bottom is the New-lows. New-lows are often
cut in half within a day or two after a bottom.
At the Coronavirus low, new-lows were cut by 90% the day after the
bottom. Now, two days after the low,
new-lows are stubbornly high at over 500. That’s higher than they were at the
recent low, just two days ago.
If that weren’t enough, Apple reported today after hours.
They beat estimates, but cautioned about supply chain issues on their
conference call. AAPL was down 2.2% in after-hours trading.
S&P 500 futures are down as I write this. I think the
Pros in Wall Street are waiting to see what the Fed does next week and for more
clarity on other issues. Even so, I would not be surprised to see the S&P
500 challenge its 50-dMA of 4390.
Today, the daily sum of 20 Indicators remained -3 (a
positive number is bullish; negatives are bearish); the 10-day smoothed sum
that smooths the daily fluctuations improved from -15 to -13. (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 improved
to HOLD: VOLUME is bearish; PRICE, VIX & SENTIMENT 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
THURSDAY 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.
