Jobless Claims ... Philadelphia FED Index ... Empire State Manufacturing ... Industrial Production … Coronavirus (Covid-19) … Stock Market Analysis … ETF Trading … Dow 30 Ranking

“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

 

“People always ask me what is going on in the markets. It is simple. Greatest Speculative Bubble of All Time in All Things. By two orders of magnitude.” – Michael “Big Short” Burry.

 

“I never imagined that I would see the day that the Chairman of the House Judiciary Committee would step forward to call for raw [Supreme] court packing. It is a sign of our current political environment where rage overwhelms reason.” - Professor Jonathan Turley, honorary Doctorate of Law from John Marshall Law School for his contributions to civil liberties and the public interest.

 

JOBLESS CLAIMS (YahooFinance)

“New weekly jobless claims fell to the lowest level since March 2020, closing back in on pre-pandemic levels as the rate of new joblessness slowed further... Initial jobless claims, week ended July 10: 360,000 vs. 350,000 expected and a revised 386,000 during prior week...” Story at...

https://finance.yahoo.com/news/weekly-jobless-claims-week-ended-july-10-2021-173250411.html

 

PHILADELPHIA FED INDEX (Reuters)

“Factory activity in the U.S. mid-Atlantic region slowed sharply for the third consecutive month to its lowest growth since December after hitting its highest pace in nearly half a century earlier this spring...The Philadelphia Federal Reserve Bank said its business activity index fell to 21.9 from 30.7 in June.” Story at...

https://www.reuters.com/article/usa-economy-manufacturing/philly-fed-factory-index-falls-in-july-to-lowest-since-december-idUSAQN040J00

Manufacturing slowed, but is still expanding since the reading is greater than zero.

 

EMPIRE STATE MANUFACTURING (Advisor Perspectives)

“Business activity grew at a record-setting pace in New York State, according to firms responding to the July 2021 Empire State Manufacturing Survey. The headline general business conditions index shot up twenty-six points to 43.0.” Analysis and charts at...

https://www.advisorperspectives.com/dshort/commentaries/2021/07/15/empire-state-mfg-survey-record-setting-growth-in-july

 

INDUSTRIAL PRODUCTION (mdm)

“Industrial production increased 0.4% in June after moving up 0.7% in May, according to the Industrial Production and Capacity Utilization Report, which was released Thursday by the Federal Reserve...” Story at...

https://www.mdm.com/news/research/economic-trends/industrial-production-up-0-4-in-june/

 

CORONAVIRUS (NTSM)

Here’s the latest from the COVID19 Johns Hopkins website as of 8:30 PM Thursday. 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.

MARKET REPORT / ANALYSIS

-Thursday the S&P 500 dipped about 0.3% to 4360.

-VIX rose about 4% to 17.01.

-The yield on the 10-year Treasury was 1.307%.

 

The daily sum of 20 Indicators improved from -10 to -7 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations slipped from -18 to -29. (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 remained HOLD. VIX is Bullish; Volume, Price & Sentiment are neutral. It was nice to see the VIX indicator turn positive today. VIX is one of the better long-term indicators.   

 

There is currently only 1 top-indicator warning of a top: (1) the index is stretched too far above its 200-dMA.

 

I took profits in XLE today. Traders must think that the oil producers are going to reach an agreement.  I suppose it could bounce, but I am just following the momentum.

 

We still don’t have a strong warning from indicators, but I am expecting some weakness. The main clues are that Breadth (the 10-dMA of % of issues advancing on the NYSE) keeps falling and my basket of internals remains negative.

 

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

 

THURSDAY MARKET INTERNALS (NYSE DATA)

Market Internals remained BEARISH 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 of 15 July, my stock-allocation is about 45% invested in stocks since I took profits in XLE due to its falling momentum. I’ll probably wait to see what the market is doing before I put those funds  back to work. I am not super bullish (or bearish) and I am watching the markets closely.

 

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 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.

FED Beige Book ... Producer Price Index ... EIA Crude Inventories … Coronavirus (Covid-19) … Stock Market Analysis … ETF Trading … Dow 30 Ranking

“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

 

“People always ask me what is going on in the markets. It is simple. Greatest Speculative Bubble of All Time in All Things. By two orders of magnitude.” – Michael “Big Short” Burry.

 

“I never imagined that I would see the day that the Chairman of the House Judiciary Committee would step forward to call for raw [Supreme] court packing. It is a sign of our current political environment where rage overwhelms reason.” - Professor Jonathan Turley, honorary Doctorate of Law from John Marshall Law School for his contributions to civil liberties and the public interest.

FED BEIGE BOOK (Federal Reserve)

“The U.S. economy strengthened further from late May to early July, displaying moderate to robust growth. Sectors reporting above-average growth included transportation, travel and tourism, manufacturing, and nonfinancial services. Energy markets improved slightly, and agriculture had mixed results. Supply-side disruptions became more widespread, including shortages of materials and labor, delivery delays, and low inventories of many consumer goods. Strained car inventories resulted in somewhat lower car sales despite steady demand, and home sales rose slightly despite limited supply...Three-quarters of Districts reported either slight or modest job gains and the remainder reported moderate or strong increases in employment. Healthy labor demand was broad-based but was seen as strongest for low-skilled positions. Wages increased at a moderate pace on average, and low-wage workers enjoyed above-average pay increases... Prices increased at an above-average pace, as seven Districts reported strong price growth and the rest saw moderate gains.” Press release at...

https://www.federalreserve.gov/monetarypolicy/beigebook202107.htm

 

PPI / CORE PPI (Reuters)

“U.S. producer prices accelerated in June, leading to the largest annual increase in more than 10-1/2 years, suggesting inflation could remain high as robust demand fueled by the economy's recovery from the COVID-19 pandemic strains the supply chain...inflation is likely nearing its peak. Excluding the volatile food, energy and trade services components, producer prices rose 0.5%. The so-called core PPI gained 0.7% in May.” Story at...

https://www.reuters.com/business/us-producer-prices-surge-more-than-expected-june-2021-07-14/

 

EIA CRUDE INVENTORIES (EIA)

“U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 7.9 million barrels from the previous week. At 437.6 million barrels, U.S. crude oil inventories are about 8% below the five year average for this time of year.” Press release at...

https://ir.eia.gov/wpsr/wpsrsummary.pdf

Demand remains strong.  So, why did the XLE drop 4% today? It looks like energy is being influenced by OPEC discussions regarding a production increase.  There is no agreement at this time and who knows whether they’ll ever agree.

 

LOW STRESS IN THE MARKETS (Heritage Capital)

“...the high yield bond ETF...is just a few pennies from all-time highs. That is not the behavior you typically see at the end of bull markets or even before a significant decline. If the junk bond market is sanguine and that is where we see the first sign of trouble in liquidity, it does not stand to reason that problems will pop up elsewhere first.” - Paul Schatz,  resident Heritage Capital. Commentary at...

https://investfortomorrow.com/blog/low-stress-in-markets-but-inflation-report-coming-up/

 

CORONAVIRUS (NTSM)

Here’s the latest from the COVID19 Johns Hopkins website as of 10:30 PM 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.

MARKET REPORT / ANALYSIS

-Wednesday the S&P 500 rose about 0.1% to 4374, near the prior all-time high.

-VIX fell about 5% to 16.33.

-The yield on the 10-year Treasury rose to 1.337%. (The Bond Ghouls are suggesting a decline in the economy/stock market.)

 

The market is narrowing. The 10-dMA of Breadth (% of issues advancing on the NYSE over the last 10-days) was only 48.5. The % of issues making new 52-week highs was 3.5%. That’s a low number. We’ll need to see what this stat looks like if we can make a new high on the S&P 500. For now, these stats are mildly bearish.

 

I see that the XLE (Energy ETF) has dropped out of the top 3 in momentum for the ETFs I track. It is down almost 7% over the last 40-days, most of that decline has been recent. I plan to take profits in the XLE. I can always buy it back if its momentum improves.

 

The daily sum of 20 Indicators declined from -6 to -10 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations slipped from -8 to -18. (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 remained HOLD. VIX, Volume, Price & Sentiment are neutral.

 

There is currently only 1 top-indicator warning of a top: (1) the index is stretched too far above its 200-dMA.

 

The Short-term indicator ensemble remains down and other short-term indicators are more bearish.  It looks like a pullback may be in the works. The S&P 500 is about 3.4% above its 50-dMA so that would be a reasonable guess for a slow retreat. Other than taking profits in the XLE, I don’t plan on making significant portfolio changes unless the slide in indicators continues.

We still don’t have a strong warning from indicators.  

 

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

 

WEDNESDAY MARKET INTERNALS (NYSE DATA)

Market Internals remained BEARISH 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 of 25 May, my stock-allocation is about 50% invested in stocks. I am not super bullish and I am watching the markets closely. For now, 50% is a reasonable allocation for me.

 

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 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.

NFIB Small Business Optimism ... Consumer Price Index (CPI) Core CPI … Federal Judge Presses Trump Lawyers on Election Fraud Coronavirus (Covid-19) … Stock Market Analysis … ETF Trading … Dow 30 Ranking

“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

 

“People always ask me what is going on in the markets. It is simple. Greatest Speculative Bubble of All Time in All Things. By two orders of magnitude.” – Michael “Big Short” Burry.

 

“I never imagined that I would see the day that the Chairman of the House Judiciary Committee would step forward to call for raw [Supreme] court packing. It is a sign of our current political environment where rage overwhelms reason.” - Professor Jonathan Turley, honorary Doctorate of Law from John Marshall Law School for his contributions to civil liberties and the public interest.

 

NFIB SMALL BUSINESS OPTIMISM (Reuters)

“Confidence among small businesses in the United States improved slightly in June after declining in May, despite owners worrying about a labor shortage and inflation... Some 56% of respondents said they had few or no qualified applicants for open jobs in June...” Story at...

https://www.reuters.com/article/us-usa-economy-small-business-idUSKBN2EJ0WB

 

CPI / CORE CPI (Reuters)

“Inflation surged in June at its fastest pace in nearly 13 years amid a burst in used vehicle costs and price increases in food and energy, the Labor Department reported Tuesday. The consumer price index increased 5.4% from a year earlier... the core CPI rose 4.5%, the sharpest move for that measure since September 1991...” Story at...

https://www.cnbc.com/2021/07/13/consumer-price-index-increases-5point4percent-in-june-vs-5percent-estimate.html

 

FEDERAL JUDGE PRESSES TRUMP LAWYERS ON ELECTION FRAUD CLAIMS (msn.com)

“U.S. District Court Judge Linda V. Parker said she would rule on a request to discipline the lawyers in coming weeks. But over and over again during the more than five-hour hearing, she pointedly pressed the lawyers involved — including Trump allies Sidney Powell and L. Lin Wood — to explain what steps they had taken to ensure their court filings in the case filed last year had been accurate. She appeared astonished by many of their answers. While their suit aimed to create a broad impression that the vote in Michigan — and specifically Detroit’s Wayne County — had been troubled, the affidavits filed to support those claims included obvious errors, speculation and basic misunderstandings of how elections are generally conducted in the state, Parker said.” Story at...

‘This is really fantastical’: Federal judge in Michigan presses Trump-allied lawyers on 2020 election fraud claims in sanctions hearing (msn.com)

Remember that the GOP report on Michigan’s election concluded, “This Committee found no evidence of widespread or systematic fraud in Michigan’s prosecution of the 2020 election.” - Senator Edward McBroom – Chair; Senator Lana Theis – Majority Vice Chair; Senator Jeff Irwin – Minority Vice Chair; Senator John Bizon.

 

CORONAVIRUS (NTSM)

Here’s the latest from the COVID19 Johns Hopkins website as of 8:30 PM Tuesday. 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.

MARKET REPORT / ANALYSIS

-Tuesday the S&P 500 dropped about 0.4% to 4369.

-VIX rose about 6% to 17.12.

-The yield on the 10-year Treasury rose to 1.403%.

 

Today was easy to figure out - Inflation rose; yields were up; stocks were down. “Where do we go from here?” That is the tricky question. This has been the Teflon rally – nothing sticks and bad news has not slowed interest in stocks so far. Indicators are pointing down, but not particularly strongly. The Pros are taking profits based on the late-day action and that’s a bearish sign, but we never got too many strong top-indicators. I am not making any changes to market holdings until I see more negative signs.

 

The daily sum of 20 Indicators remained -6 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations slipped from -2 to -6. (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 remained HOLD. VIX, Volume, Price & Sentiment are neutral.

 

There is currently only 1 top-indicator warning of a top: (1) the index is stretched too far above its 200-dMA.

 

I remain cautiously 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

 

TUESDAY MARKET INTERNALS (NYSE DATA)

Market Internals declined to BEARISH 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 of 25 May, my stock-allocation is about 50% invested in stocks. I am not super bullish and I am watching the markets closely. For now, 50% is a reasonable allocation for me.

 

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 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.

Bond Yields are Warning ... Regression to Trend … Coronavirus (Covid-19) … Stock Market Analysis … ETF Trading … Dow 30 Ranking

“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.

 

“This is something that folks don’t like to talk about, but black-on-black crime does exist, and sadly, in vulnerable communities it’s more common that violent crimes are perpetrated more times by persons of color against persons of color.” Radical critics of law enforcement fail to understand that “people in any city in America who live in vulnerable communities absolutely rely and want the police. They want constitutional policing. But they want to be safe...Some affiliated with Black Lives Matter may not even understand maybe some of the Marxist underpinnings of the leadership...It’s a movement made to undermine our government as we know it, and in some places you were more successful than others.” - James Craig, recently retired Chief of Police, City of Detroit. (See “The Man who Kept the Peace in Detroit”, WSJ at... 

https://www.wsj.com/articles/the-man-who-kept-the-peace-in-detroit-11625854992)

BOND YIELDS SEND AN ECONOMIC WARNING (RIA)

“Bond yields are sending an economic warning as this past week 10-year Treasury yields dropped back to 1.3%.  With the simultaneous surge in the dollar, there is rising evidence the economic “reflation” trade is getting unwound.

Such is despite overly exuberant expectations of strong economic growth by the mainstream media.” Commentary at...

https://realinvestmentadvice.com/macroview-bond-yields-send-an-economic-warning/

 

REGRESSION TO TREND: LONG TERM MARKET PERFORMANCE (Advisor Perspectives)

“Below is a chart of the S&P Composite stretching back to 1871 based on the real (inflation-adjusted) monthly average of daily closes. We're using a semi-log scale to equalize vertical distances for the same percentage change regardless of the index price range...

... The peak in 2000 marked an unprecedented 129% overshooting of the trend — substantially above the overshoot in 1929. The index had been above trend for two decades, with one exception: it dipped about 15% below trend briefly in March of 2009. At the beginning of July 2021, it is 170% above trend. The major troughs of the past saw declines in excess of 50% below the trend. If the current S&P 500 were sitting squarely on the regression, it would be at the 1567 level.” Commentary/analysis at...

https://www.advisorperspectives.com/dshort/updates/2021/07/08/regression-to-trend-another-look-at-long-term-market-performance

 

CORONAVIRUS (NTSM)

Here’s the latest from the COVID19 Johns Hopkins website as of 6:00 PM Monday. 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.

 

Monday’s new-case numbers were double the 10-day moving average from just 6 days ago. I don’t see this as a disaster, yet, but we better watch this stat. I continue to be surprised at the relatively large number of people who have refused the vaccine.

MARKET REPORT / ANALYSIS

-Monday the S&P 500 rose about 0.4% to 4385.

-VIX rose about 1% to 16.38.

-The yield on the 10-year Treasury rose to 1.365%.

 

I mentioned Friday that volume was very low.  Today, Volume was about 6% below the monthly average.  That’s not much and it means that, for now, we don’t need to worry about low volume.

 

The daily sum of 20 Indicators declined from -3 to -6 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations slipped from +6 to -2. (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.

 

When I updated Friday’s numbers (Friday evening), the Long-Term indicator was HOLD at Friday’s close, not BUY as I reported Friday. Monday, the Long Term NTSM indicator remained HOLD. VIX is bullish; Volume, Price & Sentiment are neutral.

 

There are currently 2 top-indicators warning of a top: (1) the index is stretched too far above its 200-dMA (2) RSI is overbought.

 

Bollinger Bands are close to overbought, but are not there yet. 8 out of the last 10 sessions have been up.  That’s close to a bearish sign, but it would take a lot more consecutive up-days to trip this indicator to the bear side.

 

6.4% 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 July. This is a little below average, but not enough to worry about.

 

I remain cautiously 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

I added American Express (AXP) and Microsoft (MSFT) last week. My trading positions also currently include XLK (Technology ETF), Boeing (BA), XLE (Energy ETF) 

 

MONDAY MARKET INTERNALS (NYSE DATA)

Market Internals remained NEUTRAL 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 of 25 May, my stock-allocation is about 50% invested in stocks. I am not super bullish and I am watching the markets closely. For now, 50% is a reasonable allocation for me.

 

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 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.

Stock Market Acting Like We Have a 2nd Term President … Coronavirus (Covid-19) … Stock Market Analysis … ETF Trading … Dow 30 Ranking

“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

 

“People always ask me what is going on in the markets. It is simple. Greatest Speculative Bubble of All Time in All Things. By two orders of magnitude.” – Michael “Big Short” Burry.

 

“I never imagined that I would see the day that the Chairman of the House Judiciary Committee would step forward to call for raw [Supreme] court packing. It is a sign of our current political environment where rage overwhelms reason.” - Professor Jonathan Turley, honorary Doctorate of Law from John Marshall Law School for his contributions to civil liberties and the public interest.

STOCK MARKET ACTING LIKE WE HAVE A 2^ND TERM PRESIDENT

“...the SP500 is acting much more like the 2nd term president plot, even though we have a first term president (Biden) from a different party than the last president (Trump)...If the market was going to follow the normal 1st term president plot, then we should have seen a top in May and a summer downturn, but we are not seeing that...If the SP500 continues to follow the 2nd term Presidential Cycle Pattern, then a top lies just ahead, followed by the normal seasonal weakness into autumn.  And the 1st term PCP also shows a top just ahead, albeit more into early August than in mid-July, which is not a great distinction.” Commentary at...

https://www.mcoscillator.com/learning_center/weekly_chart/stock_market_acting_like_we_have_a_2nd_term_president/

 

CORONAVIRUS (NTSM)

Here’s the latest from the COVID19 Johns Hopkins website as of 11:00 PM Friday. 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.

 

Daily case numbers keep rising. Does this justify a major correction? Probably not.

MARKET REPORT / ANALYSIS

-Friday the S&P 500 rose about 1.1% to 4370.

-VIX dropped about 15% to 16.18.

-The yield on the 10-year Treasury rose to 1.360%.

 

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 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%.

-The 5-10-20 Timer System is BUY; the 5-dEMA and 10-dEMA are both above the 20-dEMA. 

-MACD of S&P 500 price made a bullish crossover today, 25 June.

-VIX is falling fast (finally).

-The Smart Money (late-day action) is improving. (This indicator is based on the Smart Money Indicator developed by Don Hayes).

-Slope of the 40-dMA of New-highs is rising. This is one of my favorite trend indicators.

-The S&P 500 is out-performing the Utilities ETF (XLU), and trending higher - bullish.

-58% of the 15-ETFs that I track have been up over the last 10-days.

 

NEUTRAL

-Bollinger Bands are nearly overbought, but remain neutral.

-Long-term new-high/new-low data is flat.

-Breadth on the NYSE compared to the S&P 500 index is neutral.

-We’ve had 4 Distribution Days recently, but not enough to send a signal.

-Statistically, the S&P 500 gave a panic-signal, 18 June, but the signal has expired.

-Non-crash Sentiment indicator remains neutral, but it is very bullish and that means the signal is leaning bearish.

-There have been 13 up-days over the last 20 days. Neutral

-There have been 8 up-days over the last 10-days.

-The Fosback High-Low Logic Index is neutral.

-There have been 4 Statistically-Significant days in the last 15-days. Neutral.

- 4.6% of all issues traded on the NYSE made new, 52-week highs when the S&P 500 made a new all-time-high 11 June  9 July. (There is no bullish signal for this indicator.) This is  below average, but not enough to send a signal.

-4 June, the 52-week, New-high/new-low ratio improved by 0.4 standard deviations, somewhat bullish, but it has expired.

-The size of up-moves has been larger than the size of down-moves over the last month, but not enough to give a signal.

-Overbought/Oversold Index (Advance/Decline Ratio) is neutral.

 

BEAR SIGNS

-MACD of the percentage of issues advancing on the NYSE (breadth) made a bearish crossover 16 June, and has not yet changed its mind.

-Short-term new-high/new-low data is lower.

-RSI is overbought.

-The S&P 500 is 13.1% above its 200-dMA (Sell point is 12%.). This value was 15.9% above the 200-dMA when the 10% correction occurred in Sep 2020.

-McClellan Oscillator is mildly bearish.

-Cyclical Industrials (XLI-ETF) are under-performing the S&P 500 - bearish.

-My Money Trend indicator is slightly to the bear side.

-The smoothed advancing volume on the NYSE is falling.

 

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 8 bear-signs and 10 bull-signs. Last week, there were 7 bear-signs and 13 bull-signs. Indicators slipped a little this week, but not too much.

 

The daily sum of 20 Indicators improved from -6 to -2 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations slipped from +10 to +7. (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.

 

My Short-Term indicator ensemble improved to Neutral, but there was a troubling sign today – volume was about 17% below the average over the last month of trading. This suggests some investor caution.  I worry about running out of buyers. Are we there yet? I don’t really know; but probably not.  

 

The Long Term NTSM indicator improved to BUY. Volume & VIX are bullish; Price & Sentiment are neutral. This Buy signal is not important since I have been fully invested for a long time. It is signaling good market conditions; it can give a bullish signal after a bottom or at, or approaching, a top.   

 

There are currently 2 top-indicators warning of a top: (1) the index is stretched too far above its 200-dMA (2) RSI is overbought. This is a neutral indication.

 

I remain cautiously 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

 

I added American Express (AXP) and Microsoft (MSFT) today.

 

FRIDAY MARKET INTERNALS (NYSE DATA)

Market Internals improved to NEUTRAL 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 of 25 May, my stock-allocation is about 50% invested in stocks. I am not super bullish and I am watching the markets closely. For now, 50% is a reasonable allocation for me.

 

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 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.