“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.
CPI (CNBC)
“Inflation rose again in April, continuing a climb that
has pushed consumers to the brink and is threatening the economic expansion,
the Bureau of Labor Statistics reported Wednesday. The consumer
price index, a broad-based measure of prices for goods and services,
increased 8.3% from a year ago...” Story at...
https://www.cnbc.com/2022/05/11/cpi-april-2022.html
EIA CRUDE INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those
in the Strategic Petroleum Reserve) increased by 8.5 million barrels from the
previous week. At 424.2 million barrels, U.S. crude oil inventories are about
13% below the five year average for this time of year.” Story at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf
Below average inventories suggest higher prices to me.
Demand remains high.
THE SUPREME COURT WILL TAKE AWAY MORE RIGHTS USING DOBBS
RATIONALE – NOT LIKELY (NTSM)
I’ve been hearing a lot about how contraception,
gay-marriage, inter-racial marriage and other rights are now at risk due to the
supreme court’s DRAFT decision overturning Roe v Wade. Judge Alito’s draft
actually addressed those very questions as follows:
“Only the cases involving this...sense of the term [...the
right to make and implement important personal decisions without governmental
interference. See Whalen v. Roe, 429 U.S. 589, 599-600 (1977)] could have any
possible relevance to the abortion issue, and some of the cases in that
category involved personal decisions that were obviously very, very far afield.
See Pierce v. Society of Sisters, 268 U.S. 510 (1925) (right to send children
to religious school); Meyer v. Nebraska, 262 U.S. 390 (1937) (right to have
children receive German language instruction). ‘What remained was a handful of
cases having something to do with marriage, Loving v. Virginia, 388 U. S. 1
(1967) (right to marry a person of a different race), or procreation, Skinner
v. Oklahoma, 316 U. S. 535 (1942) (right not to be sterilized); Griswold v.
Connecticut, 381 U. S. 479 (1965) (right of married persons to obtain
contraceptives); Kisenstadt v. Baird, 405 USS. 438 (1972) (same, for unmarried
persons). But none of these decisions involved what is distinctive about
abortion: its effect on what Roe termed “potential life.” (My underlining.)
Given that the decision specifically notes why Roe is
different, it is not likely that other settled rights are at risk. It’s just
more fear mongering by the press. Apparently, the goal of the press is to
undermine the Supreme Court and our rule of law. Alito’s draft decision
concludes:
“As we have explained, ‘procuring an abortion is not a
fundamental constitutional right because such a right has no basis in the
Constitution's text or in our Nation's history...It follows that the States may
regulate abortion for legitimate reasons, and when such regulations are
challenged ‘under the Constitution, courts cannot “substitute their social and economic
beliefs for the judgment of legislative bodies. Ferguson, 372 U. S. at 729-139;
see also Dandridge v. Williams, 397 U.S. 471, 484-486 (1970); United States v.
Carolene Products Co., 304 U. S. 144, 152 (1988).”
Read the full draft decision here...
https://www.documentcloud.org/documents/21835435-scotus-initial-draft
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 fell about 1.7% to 3935.
-VIX dropped about 1% to 32.56. (The VIX Crowd thinks
this decline is getting old.)
-The yield on the 10-year Treasury slipped to 2.933%.
PULLBACK DATA:
-Drop from Top: 18% as of today. 18% max. (Avg.= 13% for
non-crash pullbacks)
-Days from Top to Bottom: 88-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 12.2% BELOW its 200-dMA & 9.5%
BELOW its 50-dMA.
*We can’t be sure that the correction is over until the
S&P 500 makes a new-high; however, we hope to be able to call the bottom
when we see it.
TODAY’S COMMENT:
It looked like yesterday might have been a low, but we
got no confirmation from the markets today.
Then, it looked like today, Wednesday, might be the short-term bottom. We
got a lower-low with improving internals, but the internals weakened into the
close so what looked like it would be a possible strong, bottom-signal didn’t
appear.
There were some bottom signals – just not enough to act
on. RSI was oversold, along with the Overbought/Oversold Index and my analysis
of late day action. The S&P 500 also dropped more than 12% below its 200-day
moving average and that, too, is a rare usually bullish sign. Unfortunately,
none of these indicators are enough to give us a bull signal for the markets.
Still, it seems to me that we are due for a bounce and we
are seeing signs that it may turn up relatively soon – but apparently not yet.
Today, the daily sum of 20 Indicators declined from +1 to
-3 (a positive number is bullish; negatives are bearish); the 10-day smoothed
sum that smooths the daily fluctuations remained -11. (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.
LONG-TERM INDCATOR: The Long
Term NTSM indicator was HOLD: VOLUME & PRICE are bearish; VIX &
SENTIMENT are hold. 45 days out of the
last 100 have been up-days; that leans bullish.
I’m back to Bearish. I’ve seen no confirmation of a low by
the markets and no actionable bottom signs in my analysis.
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
My only current trading
position is in the Energy XLE-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.
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 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.
