“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
THE HATED RALLY (Heritage Capital)
“We now have a close line in the sand to shoot against to know something isn’t right. So we will keep an eye on the major stock market indices if they close below last week’s lowest point...I expect the S&P 500 and other indices to exceed the top blue line and make new highs for 2023 in the coming 4-8 weeks. That will require the bond market and dollar to cooperate which I think they will.
...So many people [are] scared of the stock market and scarred from 2022. They’re not seeing the forest through the trees. So many people running to CDs and cash equivalents because they now have decent yields. I don’t think that’s the right move.” - Paul Schatz, President heritage Capital. Commentary at...
https://investfortomorrow.com/blog/hating-disavowing-and-fighting-the-rally/
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 fell about 1.5% to 3986.
-VIX rose about 5% to 19.59.
-The yield on the 10-year Treasury rose to 4.003%. (Back in the late 50’s, you could get 5% interest on a savings account at the local bank.)
PULLBACK DATA:
-Drop from Top: 16.9% as of today. 25.4% max (on a closing basis).
-Trading Days since Top: 294-days.
The S&P 500 is 1.2% ABOVE its 200-dMA & 0.2% BELOW its 50-dMA.
*I won’t call the correction over until the S&P 500 makes a new-high; however, evidence suggests the bottom was in the 3600 area.
MY TRADING POSITIONS:
I am not trading as much as I used to. you may wish to use the momentum charts and/or the Monday 40-day gain charts for trading the Dow stocks and ETFs I track.
QLD – 2xNasdaq 100
SSO – 2x S&P 500
XLK – Technology ETF.
XLE – Energy Sector ETF. It hasn’t been doing much recently, but Russia is cutting production and that should help the sector. We have a good dividend in the meantime.
BA – (Boeing) I am late on this one, but we’ll see.
XLY - Consumer Discretionary ETF.
SHY – Short term bonds. 30-day yield is 4.6%. (Trailing
1-year yield is 1.3%.) I’ll hold this, but if the market retests the lows, I’ll
sell it and buy stocks.)
TODAY’S COMMENT:
The S&P 500 bounced up from its 200-dMA last week so we can feel more bullish. In addition, the 200d-MA of the S&P 500 is basically flat and has been giving more bullish indications recently. It was sloping upward the day after Valentine’s day and again in early March.
During his Senate testimony Powell said “higher for
longer.” Gee, where have I heard that before? The markets nose-dived after his comments. I’ll just have to watch the
markets to see if this has any real effect on indicators. I suspect that it may not
have too much effect in the near term, other than maybe this week. The question
remains, how long will it take for all the Fed rate hikes to overcome the
earlier mistakes by the Fed and the trillions spent by Congress? The
infra-structure money hasn’t started to work its way into the economy. Even if
you have a bridge that needs work and you have the money, plans and
specifications must be developed and the job must be bid. That can take a year. So, the recent Fed actions to slow the
economy are fighting the headwind of more money hitting the economy. I think
that’s why the markets continue higher. The
past, present and future stimulus money is pushing a possible recession farther
out.
Although Fed Chair Powell’s comments were considered
bearish, the market reaction was not all that bad. Volume was slightly below
the monthly average so despite the 1.5% loss in the S&P 500, there was no
panic. VIX was up only 5% which isn’t
much for the size of the decline. The S&P 500 Index did
drop below its 50-dMA Tuesday, but it is still above its lower trend line.
I remain bullish and heavily invested in stocks. Looking
ahead...we’ll see.
Today, the daily spread of 20 Indicators (Bulls minus
Bears) declined from +5 to +1 (a positive number is bullish; negatives are
bearish); the 10-day smoothed sum that smooths the daily fluctuations improved
from +7 to +10. (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 slipped
to HOLD: PRICE, VOLUME, VIX & SENTIMENT are neutral.
(The important BUY in this indicator was on 21 October,
7-days after the bottom. For my NTSM overall signal, I suggested that a
short-term buying opportunity occurred on 27 September (based on improved
market internals on the retest), although without market follow-thru, I was
unwilling to call a buy; however, I did close shorts and increased stock
holdings. I issued a Buy-Signal on 4 October, 6-days before the final bottom,
based on stronger market action that confirmed the market internals signal. The
NTSM sell-signal was issued 20 December, 8 sessions before the high of this
recent bear market, based on the bearish Friday rundown of indicators.)
Bottom line: I remain a BULL; but I’ll be watching
indicators.
ETF - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily)
ETF ranking follows:
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
DOW STOCKS - TODAY’S MOMENTUM RANKING
OF THE DOW 30 STOCKS (Ranked Daily)
DOW 30 momentum ranking follows:
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
TUESDAY MARKET INTERNALS (NYSE
DATA)
My basket of Market Internals remained HOLD. (Market Internals are a
decent trend-following analysis of current market action, but should not be
used alone for short term trading. They are most useful when they diverge from
the Index.)
...My current invested position
is about 75% stocks, including stock mutual funds and ETFs. I’m usually about
50% invested in stocks.
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.
“We now have a close line in the sand to shoot against to know something isn’t right. So we will keep an eye on the major stock market indices if they close below last week’s lowest point...I expect the S&P 500 and other indices to exceed the top blue line and make new highs for 2023 in the coming 4-8 weeks. That will require the bond market and dollar to cooperate which I think they will.
...So many people [are] scared of the stock market and scarred from 2022. They’re not seeing the forest through the trees. So many people running to CDs and cash equivalents because they now have decent yields. I don’t think that’s the right move.” - Paul Schatz, President heritage Capital. Commentary at...
https://investfortomorrow.com/blog/hating-disavowing-and-fighting-the-rally/
-Tuesday the S&P 500 fell about 1.5% to 3986.
-VIX rose about 5% to 19.59.
-The yield on the 10-year Treasury rose to 4.003%. (Back in the late 50’s, you could get 5% interest on a savings account at the local bank.)
-Drop from Top: 16.9% as of today. 25.4% max (on a closing basis).
-Trading Days since Top: 294-days.
The S&P 500 is 1.2% ABOVE its 200-dMA & 0.2% BELOW its 50-dMA.
*I won’t call the correction over until the S&P 500 makes a new-high; however, evidence suggests the bottom was in the 3600 area.
I am not trading as much as I used to. you may wish to use the momentum charts and/or the Monday 40-day gain charts for trading the Dow stocks and ETFs I track.
QLD – 2xNasdaq 100
SSO – 2x S&P 500
XLK – Technology ETF.
XLE – Energy Sector ETF. It hasn’t been doing much recently, but Russia is cutting production and that should help the sector. We have a good dividend in the meantime.
BA – (Boeing) I am late on this one, but we’ll see.
XLY - Consumer Discretionary ETF.
The S&P 500 bounced up from its 200-dMA last week so we can feel more bullish. In addition, the 200d-MA of the S&P 500 is basically flat and has been giving more bullish indications recently. It was sloping upward the day after Valentine’s day and again in early March.
ETF - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily)
ETF ranking follows:
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
DOW 30 momentum ranking follows:
For more details, see NTSM Page at…
https://navigatethestockmarket.blogspot.com/p/a-system-for-trading-dow-30-stocks-my_8.html
