“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
“The big money is not in the buying and selling. But in
the waiting.” - Charlie Munger, Vice Chairman, Berkshire Hathaway
“This country was founded by the bayonet;
it survives by the ballot. Those who
falsely disparage the honesty of our elections are striking a blow at the
foundations of our nation and should be charged with sedition.” – Meade Stith
PPI (Reuters)
“U.S. producer prices increased strongly in February,
leading to the largest annual gain in nearly 2-1/2 years, but considerable
slack in the labor market could make it harder for businesses to pass on the
higher costs to consumers... In the 12 months through February, the PPI
accelerated 2.8%, the most since October 2018.” Story at...
UNIV OF MICHIGAN SENTIMENT (Sharecast.com)
“US consumer sentiment improved by more than expected at
the start of the month, led by improved expectations, the results of a very
closely-followed survey revealed. The University of Michigan's consumer
confidence index strengthened from a reading of 76.8 at the end of February to
83.0.” Story at...
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website as
of 6:00pm Friday Wednesday. US total case numbers are on the left axis; daily numbers
are on the right side of the graph with the 10-dMA of daily numbers in Green.
Ruh-roh! New cases more than doubled today, according to
the Johns Hopkins website.
MARKET REPORT / ANALYSIS
-Friday the S&P 500 rose
about 0.1% to 3943.
-VIX fell about 6% to 20.69.
-The yield on the 10-year
Treasury rose to 1.629%.
I noted yesterday that the advance
was broad with 15.6% of stocks making all-time highs on the NYSE. I should have
said “15.6% of issues” made all-time highs. I don’t have access to stock-only
data for the NYSE. That makes my numbers
higher than some, but they are still valid; breadth looks good.
Here’s Friday’s run-down of some important indicators.
These tend to be both long-term and short-term, so they are somewhat different
than the 20 that I report on daily.
BULL SIGNS
-The smoothed advancing volume on the NYSE is rising.
-The 10-dMA of issues advancing on the NYSE
(Breadth) is above 50%
-The 50-dMA % of issues advancing on the NYSE (Breadth)
is above 50%.
-The 100-dMA of the % of issues advancing on the
NYSE (Breadth) is above 50%.
-Cyclical Industrials (XLI-ETF) are outperforming the
S&P 500.
-The size of up-moves has been larger than the size of
down-moves over the last month.
-My Money Trend indicator is bullish.
-MACD of the percentage of issues advancing on the NYSE (breadth)
made a bullish crossover 10 Mar
-MACD of S&P 500 price made a bullish crossover 11 Mar.
-McClellan Oscillator is positive.
-8 Mar, the 52-week, New-high/new-low ratio improved by 3.5
standard deviations – very bullish and also rare.
-There have been 7 Statistically Significant days in the
last 15-days. This signal can be Bearish or Bullish. This time the Index has
bounced higher, so its bullish.
-Long-term new-high/new-low data is rising.
-Short-term new-high/new-low data is rising.
-The 5-10-20 Timer System is BUY; the 5-dEMA and 10-dEMA are
both above the 20-dEMA.
-Slope of the 40-dMA of New-highs is rising.
-93% of the 15-ETFs that I track have been up over the last
10-days – bullish.
-The S&P 500 is outperforming Utilities ETF (XLU).
NEUTRAL
-Bollinger Bands extended, but neutral.
-Breadth on the NYSE compared to the S&P 500 index is
neutral.
-VIX is neutral.
-The Fosback High-Low Logic Index is neutral.
-RSI.
-Non-crash Sentiment indicator remains neutral, but it is
too bullish and that means it is leaning bearish.
-The market has broadened out; 14.3% of all issues traded
on the NYSE made new, 52-week highs when the S&P 500 made a new all-time-high
today, 12 Mar. (there is no bullish signal for this indicator.)
-The Smart Money (late-day action) is mixed. This
indicator is based on the Smart Money Indicator (a variant of the indicator developed
by Don Hayes).
-We’ve seen 6 up-days over the last 10-days. Neutral.
(There have been 4 straight up-days so Monday would be expected to be down –
markets don’t go up forever.)
-There have been 9 up-days over the last 20 days. Neutral
-Statistically, the S&P 500 gave a panic-signal, 27
January. The signal has expired.
BEAR SIGNS
-Overbought/Oversold Index (Advance/Decline Ratio) is
overbought.
-Distribution warnings. There have been 7 Distribution
days in the last 25-trading days.
-The S&P 500 is 12.8% above its 200-dMA (Sell point
is 12%.); when Sentiment is considered, the signal is bearish, too.
On Friday, 21 February, 2 days after the top of the
Coronavirus pullback, there were 10 bear-signs and 1 bull-sign. Now there are 3
bear-signs and 18 bull-signs. Last week, there were 11 bear-signs and 6
bull-signs.
The daily sum of 20 Indicators
slipped from +11 to +10 (a positive number is bullish; negatives are bearish);
the 10-day smoothed sum that smooths the daily fluctuations improved from +4 to
+22 (These numbers sometimes change after I post the blog based on data that
comes in late.) Most of these indicators are short-term and many are trend
following.
The Long Term NTSM indicator ensemble
remained BUY. Price and Volume are bullish; Sentiment & VIX are
neutral.
There are not many negative
signs around. The S&P 500 remains relatively stretched above its 200-dMA. I
think that will remain stretched. Investors are focusing on the unprecedented
fiscal stimulus and the extreme FED-support keeping interest rates down.
I remain bullish.
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.
*For additional background on
the ETF ranking system see NTSM Page at…
http://navigatethestockmarket.blogspot.com/p/exchange-traded-funds-etf-ranking.html
TODAY’S 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.
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)
Market Internals remained BULLISH on the market. 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.
Using the Short-term indicator
in 2018 in SPY would have made a 5% gain instead of a 6% loss for buy-and-hold.
The methodology was Buy on a POSITIVE indication and Sell on a NEGATIVE
indication and stay out until the next POSITIVE indication. The back-test
included 13-buys and 13-sells, or a trade every 2-weeks on average.
As a retiree, 50% in the stock
market is about fully invested for me – it is a cautious and conservative
number. If I feel very confident, I might go to 60%; if a correction is deep
enough, and I can call a bottom, 80% would not be out of the question.
The markets have not
retested the lows on recent corrections and that left me under-invested on the
bounces. I will need to put less reliance on retests in the future.
