“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.
“Without authorization by Congress of a specific loan
forgiveness program, the President does not have the authority to forgive
student loan debt. As the U.S. Supreme Court ruled in Whitman v.
American Trucking Assns., Inc., (531 USC 457, 2001), Congress does
not “hide elephants in mouseholes.” For a full explanation, see...
https://thecollegeinvestor.com/35892/is-student-loan-forgiveness-by-executive-order-legal/
FACTORY ORDERS (RTT News)
“New orders for U.S. manufactured goods spiked by more
than expected in the month of March, according to a report released by the
Commerce Department on Tuesday. The report showed factory orders surged by 2.2 percent in March following a revised 0.1
percent uptick in February.” Story at...
https://www.rttnews.com/3280728/u-s-factory-orders-surge-more-than-expected-in-march.aspx
JOLTS JOB OPENINGS (Advisor Perspectives)
“The number of job openings was at a series high of 11.5
million on the last business day of March, although little changed over the
month, the U.S. Bureau of Labor Statistics reported today. Hires, at 6.7
million, were also little changed while total separations edged up to 6.3
million. Within separations, quits edged up to a series high of 4.5 million,
while layoffs and discharges were little changed at 1.4 million.” Analysis
at...
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 rose about 0.5% to 4175.
-VIX slipped about 10% to 29.25.
-The yield on the 10-year Treasury rose to 2.963%.
PULLBACK DATA:
-Drop from Top: 12.9% as of today. 13.9% max. (Avg.= 13% for
non-crash pullbacks)
-Days from Top to Bottom: 83-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% BELOW its 200-dMA & 4.6% 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.
TODAY’S COMMENT:
FED on deck. The
FED concludes its 2-day meeting Wednesday. Unless they surprise the markets and
raise greater than 50-basis points (1/2%), I suspect the markets will go up
after the meeting. Markets are oversold and we have been watching stocks bounce
on oversold readings the next day. My
guess is that the pattern will be repeated again. One of these dips is likely
to lead to a successful test soon if this year follows the typical 3rd
term Presidential pattern.
One word of caution.
Every talking head is suggesting the markets will bounce after the Fed
mtg and make a substantial run before turning down. It’s never that easy – when
everyone thinks the market is going one way, it is likely to go the other.
I noted yesterday that, recently, whenever the Overbought/Oversold
Index (Advance-Decline Ratio) has been oversold, the S&P 500 has bounced
the next day. This indicator has called the next day move correctly 10 straight
times; today we make it 11. It remains oversold so the Advance-Decline Ratio is
calling for another up-day Wednesday. Apparently, this indicator is very good
when the VIX is elevated.
Today, the daily sum of 20 Indicators remained -2 (a
positive number is bullish; negatives are bearish); the 10-day smoothed sum
that smooths the daily fluctuations declined from -7 to -9. (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: VIX is bullish; VOLUME is bearish; PRICE & 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. No bottom yet.
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.
