“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.
FOMC MINUTES (CNBC)
“Federal Reserve officials discussed how they want to
reduce their trillions in bond holdings at the March meeting, with a consensus
around $95 billion a month, minutes released Wednesday showed...The minutes,
though, pointed to potential rate hikes of 50 basis points at upcoming
meetings, a level consistent with market pricing for the May vote.” Story at...
https://www.cnbc.com/2022/04/06/fed-minutes-march-2022-meetings-.html
EIA CRUDE INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those
in the Strategic Petroleum Reserve) increased by 2.4 million barrels from the
previous week. At 412.4 million barrels, U.S. crude oil inventories are about
14% 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 fell about 1% to 4481.
-VIX rose about 5% to 22.10.
-The yield on the 10-year Treasury rose to 2.615%.
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: 65 (Avg= 60 days top to bottom for
>10% non-crash pullbacks)
Drop from Top: Now 6.6%. Max at close: 13%
The S&P 500 is 0.2% BELOW its 200-dMA & 1.4%
ABOVE its 50-dMA.
TODAY’S COMMENT:
Earlier today it looked like there might be some bottom-signs
beginning to show up. The S&P 500 was headed for a Statistically Significant
day (a big move down in price-volume) and the 7-day Rate-of-Change for VIX
jumped above 20. By the close, those somewhat promising signs of a possible
flush-out had vanished.
I did notice that, again, there have only been 46 up-days
in the last 100 sessions. That usually
happens near bottoms so that is a bullish sign that suggests that the likely
general direction will be up from here, though not straight up.
The S&P 500 is down about 3.3% from the recent rally
high. That is near what would be expected for a lower trend line, and the Index
has retraced about half of its recent gain off the low. Both suggest that the
S&P 500 may not fall much farther.
As I noted yesterday, overall, indicators have weakened,
but are (for the most part) not yet in “sell” mode. (Short-term internals did switch
to sell Wednesday.) One new worry is that the Index dropped below its 200-dMA.
Let’s hope it doesn’t remain there.
Today, the daily sum of 20 Indicators declined from -3 to
-5 (a positive number is bullish; negatives are bearish); the 10-day smoothed
sum that smooths the daily fluctuations declined from +81 to 64 (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 HOLD: PRICE is Bullish; VOLUME, VIX & SENTIMENT are hold.
Today was another big move
down, so maybe this will mark the end of this decline? I don’t know, we’ll see.
Until proven otherwise, I am a cautious Bull in the
near-term.
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
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
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 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.
