“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.
FACTORY ORDERS (WTVB)
“New orders for U.S.-made goods fell in February, likely
because of persistent shortages of materials and a shift in spending back to
services, but manufacturing remains supported by low inventories at
businesses... factory orders fell 0.5% in February.” Story at...
PUT/CALL RANGE SHIFT (McClellan Financial Publications)
My cmt: We never know for sure, but I think this is
similar what my numbers showed. The 27 January bottom was important from a
technical view. On McClellan’s chart that is the extreme high put/call ratio.
The market trended down another 3.5% from there before reversing upward. I
don’t think the numbers, put/call or otherwise, always call the exact bottom. Another
bottom is coming and it will be really bad, but I expect new-highs before then.
There are now too many bullish signs for a return to the prior lows anytime
soon. That could always change, so we’ll
stay tuned.
MARKET REPORT / ANALYSIS
-Monday the S&P 500 rose about 0.8% to 4583.
-VIX slipped about 5% to 18.57.
-The yield on the 10-year Treasury rose to 2.405%.
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:
Days since top: 63 (Avg= 60 days top to bottom for >10%
non-crash pullbacks)
Drop from Top: Now 4.5%. Max at close: 13%
The S&P 500 is 2.1% ABOVE its 200-dMA & 3.8%
ABOVE its 50-dMA.
TODAY’S COMMENT:
I had a typo in Friday’s summary of indicators. There was a Bull sign that I missed: MACD of
the percentage of issues advancing on the NYSE (breadth) made a bullish
crossover 21 March.
There was another Bull sign that I rarely see on Friday and
I should add that one, too. One of the simplest indicators is to count how many
up-days in a given time frame. Too many is bearish; too few is bullish. Friday
there were only 46 up-days in the last 100-sessions. The last time I saw a number
that low was at the end of the December 2018 correction, around the bottom.
This indicator doesn’t guarantee that the markets won’t keep going down, but
it’s another long-term oversold indicator that suggests the future move
is more likely to be up than down.
That would make the final totals for Friday: 14
Bull-signs and 6 Bear-signs. That’s a good, even more bullish, outcome than
previously reported.
Today, the daily sum of 20 Indicators declined from +5 to
+2 (a positive number is bullish; negatives are bearish); the 10-day smoothed
sum that smooths the daily fluctuations declined from +112 to +98 (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
remained BUY: PRICE, VOLUME & VIX are Bullish; SENTIMENT is hold.
I remain a Bull in the near-term. Later in the year we need to pay attention.
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.
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.
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 60% invested in stocks. This is above 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.
