“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.
Political commentary at...
BIG TECH FOLLOWING CHINESE TECH? (The Felder Report)
“The lesson that might be gleaned from China’s experience
is that a reset in valuations for US tech stocks may not be complete until the
Fed’s monetary tightening has first been completed. What’s more, it’s not just
the “P” in the PE Ratio that must be considered but also the “E.” If valuations
continue to revert to more normal levels AND earnings estimates continue to
come down (as leading
indicators suggest), then the decline in prices may have only just
begun.” Commentary at...
Could be; but first the rally!
ADIOS MAY (Heritage Capital, 1 June)
“...to be crystal clear, I do not believe the rally is
over or even close to ending. At a minimum this should be the 7-15% rally I
have written about and it should last more than a few days or weeks.” - Paul
Schatz, President Heritage Capital. Commentary at...
https://investfortomorrow.com/blog/adios-may/
[More from Paul today] “...My thoughts in the short-term
are unchanged. May 20th was a low of significance. That’s a high conviction
statement. It may or may not be the ultimate bottom from which the launch to
40,000 begins, but I remain firm that a 7-15% rally is here. We’ll take the
rest as it comes.” Commentary at...
https://investfortomorrow.com/blog/bull-market-in-bearishness/
CHARTS SUGGEST A VERY NICE SUMMER FOR STOCKS (CNBC)
“CNBC’s Jim Cramer explained technical analysis from
veteran chartist Larry Williams that suggests the market’s recent rebound could
last for the next few months...’He thinks this is not just a short-term bounce,
it’s a move that could last through the end of August,’ the 'Mad Money’ host
said.” Story at...
https://www.cnbc.com/2022/05/31/jim-cramer-charts-suggest-a-very-nice-summer-for-stocks.html
I agree with both of these guys – the rally can last to
the 200-dMA, but how far it goes is really anyone’s guess.
MARKET REPORT / ANALYSIS
-Monday the S&P 500 rose about 0.3% to 4121.
-VIX rose about 1% to 25.07.
-The yield on the 10-year Treasury rose a bit to 3.049%.
PULLBACK DATA:
-Drop from Top: 14.1% as of today. 18.7% max. (Avg.= 13%
for non-crash pullbacks)
-Days from Top to Bottom: 106-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 7.4% BELOW its 200-dMA & 2.8 %
BELOW its 50-dMA.
*I won’t call the correction over until the S&P 500
makes a new-high; however, we hope to be able to call the bottom when we see
it...and...we did call the market a trading “Buy” one day after the recent
trading-bottom on 12 May (a little early).
MY TRADING POSITIONS:
XLK*
UWM*
I’ll sell quickly if the rally appears to be failing.
XLE
DOW
TODAY’S COMMENT:
More Bull-signs keep popping up. The analysis of the number
of advancing issues on the NYSE vs. the S&P 500 shows that advancing issues
are significantly ahead of the Index. That divergence suggests continued
improvement in the S&P 500.
The 5-10-20 Timer System switched to BUY today; the
5-dEMA and 10-dEMA are both ABOVE the 20-dEMA.
My Money Trend indicator remains bullish.
Today, the daily sum of 20 Indicators improved from +12
to +13 (a positive number is bullish; negatives are bearish); the 10-day
smoothed sum that smooths the daily fluctuations improved from +112 to +126.
(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 INDICATOR: The Long
Term NTSM indicator declined to HOLD:
VOLUME is bullish; SENTIMENT,
PRICE & VIX are hold.
I am cautiously Bullish in the short-term and Bearish
longer-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.
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
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 roughly 45% invested in stocks. This is slightly 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.
