Payroll Report ... Best DOW Stocks ... Best ETFs … Stock Market Analysis ...

 
“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
PAYROLL REPORT / UNEMPLOYMENT RATE / AVG HOURLY EARNINGS
“-Non-farm payrolls: +263,000 vs. +200,000 expected
-Unemployment rate: 3.7% vs. 3.7% expected
-Average hourly earnings, month-over-month: +0.6% vs. +0.3% expected
-Average hourly earnings, year-over-year: +5.1% vs. +4.6% expected”
Story at...
https://finance.yahoo.com/news/november-jobs-report-labor-department-december-2-225203710.html
The report was seen as stronger-than-expected, but Professor Jeremy Segal of Wharton School of Business was on CNBC Friday morning. He pointed out that there were fewer hours worked per employee and this actually made the report weaker than expected. That may explain why markets improved later in the day Friday.
 
MARKET REPORT / ANALYSIS
-Friday the S&P 500 slipped about 0.1% to 4072.
-VIX went against the trend and dipped about 4% to 19.06.
-The yield on the 10-year Treasury dipped to 3.494%.
 
PULLBACK DATA:
-Drop from Top: 15.1% as of today. 25.4% max (on a closing basis).
-Trading Days since Top: 231-days.
The S&P 500 is 0.6% above its 200-dMA & 6.8% above its 50-dMA. (The last rally failed at the 200-dMA. The Index closed above its 200-dMA on 3 consecutive days and that’s a very good sign.)
*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 and I am fully invested with a higher percentage of stocks than normal.
 
MY TRADING POSITIONS:
XLI – Industrial ETF (XLI still looks good to me. Nearly 10% of XLI is in Boeing and Caterpillar and they are both strong performers in the DOW momentum analysis.) 
QLD – 2x Nas 100
DDM – 2x Dow 30. I may sell DDM and replace it with SSO (2x S&P 500), but for now, the DOW 30 is still doing better than the S&P 500.
XLK – Technology ETF
 
CVX – (I may hold this as a long-term position. I already owned a small position in CVX.)
 
TODAY’S COMMENT:
On Fridays, I summarize a number of indicators to get a weekly feel for trend. The Friday rundown of indicators is extremely bullish (1-bear and 20-bull). These indicators tend to be both long-term and short-term, so they are different than the 20 that I report on daily.
 
BULL SIGNS
-The 10-dMA percentage of issues advancing on the NYSE (Breadth) is above 50%.
-The 50-dMA percentage of issues advancing on the NYSE (Breadth) is above 50%.
-The 100-dMA percentage of issues advancing on the NYSE (Breadth) is above 50%
-The Smart Money (late-day action) is up.
-Slope of the 40-dMA of New-highs is rising.
-MACD of S&P 500 price made a bullish crossover 13 Oct.
-MACD of the percentage of issues advancing on the NYSE (breadth) made a bullish crossover 26 Oct.
-Smoothed Buying Pressure minus Selling Pressure is rising.
-13 & 21 Oct were Bullish Outside Reversal Days with no Bearish Outside Reversal days since then.
-Short-term new-high/new-low data.
-Long-term new-high/new-low data.
-On average, the size of up-moves has been larger than the size of down-moves over the last month.
-VIX indicator.
- There was a 90% up-volume day 30 November. In addition, 10 and 11 Nov were high up-volume days at 87% and 77%. That’s close enough to back-to-back 80% up-volume days, so I’ll call this one bullish.
-Cyclical Industrials (XLI-ETF) are outpacing the S&P 500.
-The 5-10-20 Timer System is BUY; the 5-dEMA and 10-dEMA are both above the 20-dEMA. (The 5-day is above the 10-day so short-term momentum is also bullish.)
-McClellan Oscillator.
-My Money Trend indicator is rising.
-65% of the 15-ETFs that I track have been up over the last 10-days.
-The smoothed advancing volume on the NYSE is rising.
 
NEUTRAL
-The 50-dMA percentage of issues advancing on the NYSE (Breadth) has been above 50%, for 3 days in a row ending the “correction-now” signal.
-Bollinger Bands.
-RSI
-There have been 10 up-days over the last 20 sessions – neutral.
-There have been 4 up-days over the last 10 sessions – neutral.
-The graph of the 100-day Count (the 100-day sum of up-days) is neutral.
-The short-term, 10-day, Fosback Hi-Low Logic Index.
-The longer-term, 50-dEMA, Fosback Hi-Low Logic Index is neutral.
-Issues advancing on the NYSE (Breadth) compared to the S&P 500 is neutral.
-Overbought/Oversold Index (Advance/Decline Ratio). 
-There was a Follow-through Day 30 November, cancels prior Distribution Days.
-There have been 2 Statistically-Significant days (big moves in price-volume) in the last 15-days.
-Sentiment.
-The Calm-before-the-Storm/Panic Indicator flashed a panic-buying signal 10 November - expired.
-The S&P 500 is 0.8% below its 200-dMA. (Bull indicator is 12% below the 200-day, although this is based on “normal” pullbacks.)
-There was an Inverse Zweig Breadth Collapse (negative Breadth Thrust) 21 June. That’s a rare, very-bearish sign, but it was a long time ago - expired.
-There was a Hindenburg Omen signal 8 April – expired.
-2.8% of all issues traded on the NYSE made new, 52-week highs when the S&P 500 made a new all-time-high, 3 January 2022. (There is no bullish signal for this indicator.) This indicated that the advance was too narrow and a correction was likely to be >10%. It proved correct, but is now Expired
-The 52-week, New-high/new-low ratio improved by 3.5 standard deviations. More simply, the spread between new-highs and new-lows improved by 716 on 14 October. That’s a solid bottom sign at a retest. – Expired.
 
BEAR SIGNS
-S&P 500 is underperforming the Utilities (XLU).
 
On Friday, 21 February, 2 days after the top before the Coronavirus pullback, there were 10 bear-signs and 1 bull-sign. Now there is 1 bear-sign and 20-Bull. Last week, there were 5 bear-signs and 15 bull-signs.
 
Friday indicators remain at extreme bullish levels.
 
LONG-TERM INDICATOR: The Long Term NTSM indicator remained BUY: SENTIMENT is neutral; VOLUME, VIX, & PRICE are bullish.  (The important Buy signal from this indicator ensemble was 21 October (7 days after the low); my first buy indication was on 27 September (2% above the low) based on analysis of retests of the June low.) I had a typo here – 27 Sept was the successful retest.
 
Bottom line: I remain a Bull. I think the bottom was 3577 on 12 October. There is always the possibility that the markets could retest those lows, but it seems less likely that a retest will occur in 2022.
 
I’m now invested with about 75% of the portfolio invested in stocks. (As a retiree, 50% invested in stocks is my “normal” portfolio.) 75% stocks is uber-bullish and that’s as far as I’ll go.
 
BEST ETFs - 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
XLE has taken the top position in the ETF momentum index. I own CVX so I already have good exposure to energy.
 
BEST 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
 
FRIDAY MARKET INTERNALS (NYSE DATA)

My basket of Market Internals remained BUY.
(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’ll cut back on stocks if we see serious bear signs.
 
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.