GDP (Fox Business)
“The U.S. economy contracted 1.5% on an annualized basis in
the first quarter of 2022, according to revised data released by the Bureau of
Economic Analysis on Thursday... The contraction was partially attributed to
the nation spending more on imports from other countries than it did on U.S.
exports. The trade gap slashed first-quarter GDP by 3.2 percentage points.”
Story At...
https://www.foxbusiness.com/economy/us-gdp-contracts-further-in-1q
JOBLESS CLAIMS (Reuters)
“The number of Americans filing new claims for
unemployment benefits fell more than expected last week as the labor market
remains tight amid strong demand for workers despite rising interest rates and
tightening financial conditions...Initial claims for state unemployment
benefits decreased 8,000 to a seasonally adjusted 210,000 for the week ended
May 21...” Story at...
TRUMP’S DILEMMA (The Hill)
“The [all Republican] trio Trump blamed for his
2020 loss in Georgia — Gov. Brian Kemp, Attorney General Chris Carr and
Secretary of State Brad Raffensperger — all won handily in yesterday’s
Republican primary. Kemp eviscerated former Sen. David Perdue by 50
points...Carr won by over 40 points against Trump endorsee John Gordon...A
primary focus of Trump’s ire, Raffensperger, turned away the challenger by over
15 points...” Opinion at...
https://thehill.com/opinion/3500876-trump-faces-growing-dilemma-after-georgia/
My cmt: This is curious. Trump, along with his followers,
continue to claim the election was stolen from Trump in the Republican state of
Georgia. Based on 2022 primary-election results, Georgia voters strongly
disagree.
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 rose about 2% to 4058.
-VIX fell about 3% to 27.5.
-The yield on the 10-year Treasury remained 2.751%.
PULLBACK DATA:
-Drop from Top: 15.4% as of today. 18.7% max. (Avg.= 13%
for non-crash pullbacks)
-Days from Top to Bottom: 100-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 9% BELOW its 200-dMA & 5.2% 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...
MY TRADING POSITIONS:
QQQ*
UWM*
XLE
DOW
*Sell when the markets make it to the 50-dMA. I may break
this rule too...we’ll see. I still suspect this is just a Bear Market Rally.
TODAY’S COMMENT:
In the past, I’ve written about the powerful bullish
signal from a 90% up-volume reversal. An equally bullish signal is triggered
when there are back-to-back 80% up-volume days.
We got that signal yesterday and today...Looking good Billy Ray! Feeling
good Louis!...Not much else to say. Bullish signs abound.
Today, the daily sum of 20 Indicators improved from +11
to +13 (a positive number is bullish; negatives are bearish); the 10-day
smoothed sum that smooths the daily fluctuations improved from +53 to +66. (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 was HOLD: VOLUME is bullish; VIX is bearish; SENTIMENT and
PRICE are hold. Only 45 days out of the
last 100 have been up-days; that leans bullish.
I am Bullish in the short-term and Bearish longer-term. I
expect a rally in the 7-9% range. Around 4300 is as good a target as any: it
would be a 50% retracement and it is also currently close to the 50-dMA. We’ll
see when we get there. After that we still have supply chain issues; inflation;
the Fed; War in Ukraine; but mainly, it’s the FED.
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
THURSDAY 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, but some percentage includes
trading-positions that I will exit if a rally fails to materialize. 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.
