“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
“Far
more money has been lost by investors in preparing for corrections, or anticipating
corrections, than has been lost in the corrections themselves.” -
Peter Lynch, former manager of Fidelity’s Magellan® fund.
“The trouble with trade wars is that once they begin they
can quickly escalate and get out of control. All the more so when politicians
are nearing an election campaign, as Canada now is. Or when Mr. Trump behaves
as if his manhood is implicated because a foreign nation won’t take his nasty
border taxes lying down. We said from the beginning that this North American
trade war is the dumbest in history, and we were being kind.” – WSJ Editorial
Board.
UNIV OF MICHIGAN SENTIMENT (Univ of Michigan)
“Consumer sentiment slid another 11% this month, with declines seen consistently across all groups by age, education, income, wealth, political affiliations, and geographic regions. Sentiment has now fallen for three consecutive months and is currently down 22% from December 2024. While current economic conditions were little changed, expectations for the future deteriorated across multiple facets of the economy, including personal finances, labor markets, inflation, business conditions, and stock markets.” Report at....
http://www.sca.isr.umich.edu/
MARKET REPORT / ANALYSIS AS OF 1PM FRIDAY
-Friday the S&P 500 rose about 2.1% to 5639.
-VIX fell about 12% to 24.66.
-The yield on the 10-year Treasury rose to 4.32%.
MY TRADING POSITIONS:
None
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
Today, of the 50-Indicators I track, 18 gave Bear-signs and 4 were Bullish. The rest are neutral. (It is normal to have a lot of neutral indicators since many of the indicators are top or bottom indicators that will signal only at extremes.)
TODAY’S COMMENT
There was a big, bull-sign today, but it remains to be seen whether it will prove correct. That’s because the signal wasn’t complete. Friday was a 90% up-volume day. 90% of all volume on the NYSE was up-volume and there was strong, price-momentum at the close, a bullish sign.
While we always like a 90% up-volume day, Lowry Research
notes that “...declines containing two or more 90% Downside Days usually
persist, on a trend basis, until investors eventually come rushing back in to
snap up what they perceive to be the bargains of the decade and, in the
process, produce a 90% Upside Day"(from Identifying Bear Market Bottoms).
We got the upside-day, but this correction has not included any prior 90% downside-days.
We haven’t seen a 90% down-volume day since December of 2024. That means that
the signal may not be a good one – sometimes it works; sometimes it doesn’t.
There are still plenty of bear signs.
Friday was a statistically significant up-day. That just
means that the price-volume move exceeded my statistical parameters. Statistics
show that a statistically-significant, up-day is followed by a down-day about
60% of the time.
The daily, bull-bear spread of 50-indicators improved, but
it’s still a Bearish -14 (14 more Bear indicators than Bull indicators).
The 10-dMA of the spread continued down – also a bearish sign.
Individual investors are finally getting worried; Sentiment
dropped to 89%-bulls. It was 95%-bulls just 3-days ago. This indicator would
give a buy signal if it dropped to 84%. (Buy and Sell signals for my sentiment
indicator a quite variable depending on statistical analysis of sentiment.)
Last week we saw some bottom signals: 90% up-volume day;
Bollinger Bands, & RSI. We may be approaching a bottom and it could have
been on Thursday. I’ll watch Monday and see if there are any better clues. I can’t call a bottom yet.
On the news front, markets follow the Michigan Consumer Sentiment
number and the poor sentiment numbers should put pressure on markets Monday. Investor
Business Daily reported that the Friday rally was because the Government
shutdown had been averted – sorry, I don’t believe that at all.
BOTTOM LINE
No bottom call yet. I am bearish with a very conservative allocation of only about 30% invested in stock holdings.
ETF - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily) ETF ranking follows:
*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)
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
FRIDAY MARKET INTERNALS (NYSE
DATA)
My basket of Market Internals remained HOLD. (My basket of Market
Internals is a decent trend-following analysis that is most useful when it
diverges from the Index.)
...My current invested
position is about 30% stocks, including stock mutual funds and ETFs – extreme
bearish. (I’ll need to recalculate the %.) 50% invested in stocks is a normal
position. (75% is my max stock allocation when I am confident that markets will
continue higher; 30% in stocks is my Bear market position.)
I trade about 15-20% of the total portfolio using the momentum-based analysis I provide here. When I see bullish signs, I add a lot more stocks to the portfolio, usually by using an S&P 500 ETF as I did back in October 2022 and 2023.
“Consumer sentiment slid another 11% this month, with declines seen consistently across all groups by age, education, income, wealth, political affiliations, and geographic regions. Sentiment has now fallen for three consecutive months and is currently down 22% from December 2024. While current economic conditions were little changed, expectations for the future deteriorated across multiple facets of the economy, including personal finances, labor markets, inflation, business conditions, and stock markets.” Report at....
http://www.sca.isr.umich.edu/
-Friday the S&P 500 rose about 2.1% to 5639.
-VIX fell about 12% to 24.66.
-The yield on the 10-year Treasury rose to 4.32%.
None
Today, of the 50-Indicators I track, 18 gave Bear-signs and 4 were Bullish. The rest are neutral. (It is normal to have a lot of neutral indicators since many of the indicators are top or bottom indicators that will signal only at extremes.)
TODAY’S COMMENT
There was a big, bull-sign today, but it remains to be seen whether it will prove correct. That’s because the signal wasn’t complete. Friday was a 90% up-volume day. 90% of all volume on the NYSE was up-volume and there was strong, price-momentum at the close, a bullish sign.
No bottom call yet. I am bearish with a very conservative allocation of only about 30% invested in stock holdings.
TODAY’S RANKING OF 15 ETFs (Ranked Daily) ETF ranking follows:
*For additional background on the ETF ranking system see NTSM Page at…
http://navigatethestockmarket.blogspot.com/p/exchange-traded-funds-etf-ranking.html
For more details, see NTSM Page at…
https://navigatethestockmarket.blogspot.com/p/a-system-for-trading-dow-30-stocks-my_8.html
I trade about 15-20% of the total portfolio using the momentum-based analysis I provide here. When I see bullish signs, I add a lot more stocks to the portfolio, usually by using an S&P 500 ETF as I did back in October 2022 and 2023.
