Consumer Confidence ... Chicago PMI ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

 “Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
CHICAGO PMI (Advisor Perspectives)
“The latest Chicago Purchasing Manager's Index, or the Chicago Business Barometer, dropped to 44.3 in January from 44.9 in December, marking the fifth straight month in contraction territory. Values above 50.0 indicate expanding manufacturing activity. This reading comes in below the Investing.com forecast of 45.0.” Commentary & Charts at...
https://www.advisorperspectives.com/dshort/updates/2023/01/31/chicago-pmi-down-in-january-worse-than-forecast?topic=economic-insights
My cmt: The number was in the 30’s in November.
 
CONSUMER CONFIDENCE (Conference Board via pr newswire)
“The Conference Board Consumer Confidence Index® decreased in January following an upwardly revised increase in December 2022. The Index now stands at 107.1 (1985=100), down from 109.0 in December (an upward revision)..."Consumers' assessment of present economic and labor market conditions improved at the start of 2023. However, the Expectations Index retreated in January reflecting their concerns about the economy over the next six months. Consumers were less upbeat about the short-term outlook for jobs. They also expect business conditions to worsen in the near term. Despite that, consumers expect their incomes to remain relatively stable in the months ahead.” Story at...
https://www.prnewswire.com/news-releases/us-consumer-confidence-declined-in-january-301734825.html
 
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 rose about 1.5% to 4077.
-VIX declined about 2.7% to 19.40.
-The yield on the 10-year Treasury slipped to 3.511%.
 
PULLBACK DATA:
-Drop from Top: 15% as of today. 25.4% max (on a closing basis).
-Trading Days since Top: 270-days.
The S&P 500 is 3.1% ABOVE its 200-dMA & 3.3% ABOVE its 50-dMA.
*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.
 
MY TRADING POSITIONS:
QLD – (2xNas 100) The XLK bottomed 12 October, about the same time as when the S&P 500 retested its low. QLD seems like a decent bet even though the CNBC crowd doesn’t like Tech.
XLK – Technology ETF.
SSO – 2x S&P 500.
XLE – Energy Sector ETF. Low PE; good Dividend; decent momentum.
BA – (Boeing) I am late on this one, but we’ll see.
XLY - Consumer Discretionary ETF. (I considered selling XLY. But it was a top performer 31 Jan, so I’ll continue to watch it.)
SHY – Short term bonds. 30-day yield is 4.2%. (Trailing 1-year yield is 1.3%.) I’ll hold this, but if the market retests the lows, I’ll sell it and buy stocks.)
 
TODAY’S COMMENT:
Today, was a bullish, high up-volume day. 90% of the volume was up-volume and the S&P 500 index finished in the upper 10% its range for the day.  That’s a nice bullish follow-thru sign that tends to confirm my bullish view.  
 
XLK (SPDR Technology ETF) bottomed in October at about the same time as the S&P 500.  Over 40% of the XLK-ETF is invested in Apple & Microsoft, so XLK is a big tech ETF.
 
Since the bottom, the rate of recovery for XLK vs the S&P 500 was about the same in 2022, but XLK has accelerated its growth since the start of 2023.
 

 YTD, the XLK is 4.3% ahead of the S&P 500. In spite of that, the CNBC crowd continues to say that Big Tech should be avoided due to valuation concerns. I don’t get it. Valuation is not a good timing tool. I think the Pros know that. All I can say is that I’m taking the other side of the trade.  Go with what’s working.  I have Technology exposure in XLK and QLD (2x Nasdaq 100) as well as thru the SPY (S&P 500 ETF).
 
Today, the daily sum of 20 Indicators improved from +1 to +3 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations decreased from +52 to 41. (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 remained HOLD, but the indicator is improving: PRICE is positive. VOLUME, VIX & SENTIMENT are neutral.
(The important BUY in this indicator was on 21 October, 7-days after the bottom. My NTSM buy-signal was 27 September, based on improved internals at the retest low, about 2% before the bottom.)
 
Bottom line: I’m a BULL.
 
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
 
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
 
TUESDAY MARKET INTERNALS (NYSE DATA)

My basket of Market Internals remained HOLD. (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 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.
 
 

Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

NEWS THIS WEEK – FED & MORE (Yahoo Finance)
“Fed officials will meet Jan. 31-Feb 1 and are expected to raise interest rates by 0.25% in Wednesday's policy decision. A press conference held by Fed Chair Jerome Powell Wednesday afternoon will offer investors crucial signs regarding the central bank's path forward on rate increases. Finally, rounding out the week on Friday morning will be the government's January jobs report, set for release at 8:30 a.m. ET.” Story at...

https://finance.yahoo.com/news/stock-market-week-ahead-big-tech-earnings-federal-reserve-fomc-interest-rates-125335273.html

 
ECONOMIST SAYS THE YIELD CURVE IS FLASHING A FALSE SIGNAL (Yahoo Finance)
“Economist Campbell Harvey has had a winning track record since he showed in his dissertation at the University of Chicago decades ago that the shape of the bond yield curve was linked to the path of US economic activity...’My yield-curve indicator has gone code red, and it’s 8 for 8 in forecasting recessions since 1968 — with no false alarms,’ Harvey, now a professor at Duke University’s Fuqua School of Business, said in an interview Tuesday. ‘I have reasons to believe, however, that it is flashing a false signal’... Harvey’s model was linked to inflation-adjusted yields and he said the fact inflation expectations are inverted — meaning traders see price pressures easing through time — also eases odds for a recession ahead.” Story at...
https://finance.yahoo.com/news/pioneering-yield-curve-economist-sees-151304568.html
My cmt: Professor Campbell “discovered” the yield curve recession relationship so we should pay extra attention to his commentary.
 
EARNINGS EXCERPT (FactSet)
“Overall, 29% of the companies in the S&P 500 have reported actual results for Q4 2022 to date. Of these companies, 69% have reported actual EPS above estimates, which is above the percentage of 67% at the end of last week, but below the 5-year average of 77% and below the 10-year average of 73%. In aggregate, companies are reporting earnings that are 1.5% above estimates, which is below the percentage of 3.3% at the end of last week, below the 5-year average of 8.6%, and below the 10-year average of 6.4%. If 1.5% is the actual surprise percentage for the quarter, it will mark the second-lowest surprise percentage reported by the index since Q3 2012, trailing only Q1 2020 (1.1%).
https://insight.factset.com/sp-500-earnings-season-update-january-27-2023
 
ARE WE HEADED FOR RECESSION AND NEW BEAR MARKET LOWS (Ciovacco Capital)
Some have claimed that today’s economy looks like 2008 and we’re going into recession. Last week, Chris Ciovacco looked at economic trends in 2008 vs current trends with emphasis on the probabilities that we are going into recession compared to the probability of recession in 2008. He covered a number of charts on economic trends in 2008 compared to current data. Here’s one chart from the presentation:

The current up-trending line in Personal Income shows today is nothing like 2008, as far as income goes. For the most part, economic charts today don’t resemble charts from 2008 in his presentation. Bottom line, there’s not much evidence that today is anything like 2008.  It might morph into it later, but current data does not suggest a 2008-type recession is coming. View the presentation and commentary at...
https://www.youtube.com/watch?v=i0HI7rbi6UU
 
HOW MANY ARE KILLED BY POLICE IN THE US (ZeroHedge)
“The Washington Post counted 1,096 people in the U.S. who were shot and killed by police in 2022. In previous years, about as many people - around 1,000 annually - have died this way. As Statista's Katharina Buchholz shows in the infographic below, most of those killed by police were male and armed...”
 

Story at...

https://www.zerohedge.com/political/how-many-people-are-killed-police-us
 
MARKET REPORT / ANALYSIS
-Monday the S&P 500 fell about 1.3% to 4018.
-VIX rose about 8% to 19.94.
-The yield on the 10-year Treasury rose to 3.538%.
 
PULLBACK DATA:
-Drop from Top: 16.2% as of today. 25.4% max (on a closing basis).
-Trading Days since Top: 269-days.
The S&P 500 is 1.6% ABOVE its 200-dMA & 1.9% ABOVE its 50-dMA.
*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.
 
MY TRADING POSITIONS:
QLD – (2xNas 100) The XLK bottomed 12 October, about the same time as when the S&P 500 retested its low. QLD seems like a decent bet even though the CNBC crowd doesn’t like Tech.
XLK – Technology ETF.
SSO – 2x S&P 500.
XLE – Energy Sector ETF. Low PE; good Dividend; decent momentum.
BA – (Boeing) I am late on this one, but we’ll see.
XLY - Consumer Discretionary ETF.
 
SHY – Short term bonds. 30-day yield is 4.2%. (Trailing 1-year yield is 1.3%.) I’ll hold this, but if the market retests the lows, I’ll sell it and buy stocks.)
 
TODAY’S COMMENT:
With more companies reporting and a Fed meeting this week, we should expect choppiness.
 
Today, the daily sum of 20 Indicators declined from +6 to +1 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations decreased from +64 to 52. (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 remained HOLD: PRICE is positive. VOLUME, VIX & SENTIMENT are neutral.
(The important BUY in this indicator was on 21 October, 7-days after the bottom. My NTSM buy-signal was 27 September, based on improved internals at the retest low, about 2% before the bottom.)
 
Bottom line: I’m a BULL, but I am watching indicators.
 
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

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

MONDAY MARKET INTERNALS (NYSE DATA)

My basket of Market Internals remained HOLD. (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 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.

PCE Prices ... Personal Spending ... Michigan Sentiment ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

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

Political commentary at...
https://michaelpramirez.com/index.html
 
PCE PRICES / PERSONAL INCOME / SPENDING (CNBC)
“Personal consumption expenditures excluding food and energy increased 4.4% from a year ago, down from the 4.7% reading in November and in line with the Dow Jones estimate. That was the slowest annual rate of increase since October 2021... Spending adjusted for inflation declined 0.2% on the month, worse than the 0.1% drop that Wall Street had been anticipating...Personal income increased 0.2% for the month, as expected.” Story at...\
https://www.cnbc.com/2023/01/27/pce-inflation-december-2022-.html
 
UNIVERSITY OF MICHIGAN CONSUMER SENTIMENT (Univ of Michigan)
“Consumer sentiment lifted for the second straight month in January, rising 9% above December but remaining about 3% below a year ago, according to the University of Michigan Surveys of Consumers... “Slowing inflation provides some much-needed upward momentum for consumer sentiment. However, global factors like the end of China’s ‘zero-COVID’ policies may put additional upward pressure on inflation,” Hsu said. “Furthermore, the debt ceiling debate looms ahead and could reverse the improvement in sentiment seen over the last several months; past debt ceiling crises in 2011 and 2013 prompted steep declines in consumer confidence.” Story at...
https://news.umich.edu/growing-borrowing-costs-offset-easing-inflation/
 
MARKET REPORT / ANALYSIS
-Friday the S&P 500 rose about 0.3% to 4071.
-VIX slipped about 1% to 18.51.
-The yield on the 10-year Treasury was little changed at 3.512%.
 
PULLBACK DATA:
-Drop from Top: 15.1% as of today. 25.4% max (on a closing basis).
-Trading Days since Top: 267-days.
The S&P 500 is 2.8% ABOVE its 200-dMA & 3.2% ABOVE its 50-dMA.
*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.
 
MY TRADING POSITIONS:
QLD – (2xNas 100) The XLK bottomed 12 October, about the same time as when the S&P 500 retested its low. QLD seems like a decent bet even though the CNBC crowd doesn’t like Tech.
 
XLK – Technology ETF.
SSO – 2x S&P 500.
XLE – Energy Sector ETF. Low PE; good Dividend; decent momentum.
BA – (Boeing) I am late on this one, but we’ll see.
XLY - Consumer Discretionary ETF.
 
SHY – Short term bonds. 30-day yield is 4.2%. (Trailing 1-year yield is 1.3%.) I’ll hold this, but if the market retests the lows, I’ll sell it and buy stocks.)
 
TODAY’S COMMENT:
On Fridays, I summarize a number of indicators to get a weekly feel for trend. The Friday rundown of indicators was a little more bullish than last week (3-bear and 18-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
-There was a Follow-thru day 20 Jan 2023 that cancels prior Distribution Days.
-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%.
-There was a Zweig Breadth Thrust 12 January. That’s a rare, very-bullish sign.
-MACD of the percentage of issues advancing on the NYSE (breadth) made a bullish crossover 17 Jan. (It was bearish recently for one day.)
-MACD of S&P 500 price made a bullish crossover 11 Jan.
-Long-term new-high/new-low data.
-The longer-term, 50-dEMA, Fosback Hi-Low Logic Index is bullish.
-The short-term, 10-dayEMA, Fosback Hi-Low Logic Index is bullish.
-Slope of the 40-dMA of New-highs is rising.
-McClellan Oscillator.
-The graph of the 100-day Count (the 100-day sum of up-days) is headed up.
-On average, the size of up-moves has been larger than the size of down-moves over the last month.
-The 5-day EMA is above the 10-day EMA so short-term momentum is bullish.
-The 5-10-20 Timer System is BUY; the 5-dEMA and 10-dEMA are both above the 20-dEMA.
-59% of the 15-ETFs that I track have been up over the last 10-days.
-S&P 500 is outperforming Utilities (XLU-ETF).
 
NEUTRAL
-There have only been 3 Statistically-Significant days (big moves in price-volume) in the last 15-days.
-Sentiment.
-Overbought/Oversold Index (Advance/Decline Ratio). 
-Bollinger Bands.
-The graph of the 100-day Count (the 100-day sum of up-days) is flat.
-Issues advancing on the NYSE (Breadth) compared to the S&P 500.
-Short-term new-high/new-low data.
-There have been 5 up-days over the last 10 sessions – neutral.
-There have been 11 up-days over the last 20 sessions - neutral.
-RSI
-The Smart Money (late-day action) is mixed.
-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.
-The Calm-before-the-Storm/Panic Indicator flashed a panic-buying signal 10 November - expired.
-VIX indicator.
-90% down-volume days - the last one was 5 Dec. - neutral. (There has been a 90% up-volume day since then, but it did not meet all of the tests for a bullish 90% up-volume day.)
-XLI-ETF (Cyclical Industrials) is outperforming the S&P 500, but it is turning down so let’s call this one neutral.
-The S&P 500 is 2.8% above its 200-dMA. (Bull indicator is 12% below the 200-day, although this is based on “normal” pullbacks.)
-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.
-13 & 21 Oct were Bullish Outside Reversal Days with no Bearish Outside Reversal days since then - expired.
 
BEAR SIGNS
-The smoothed advancing volume on the NYSE is falling.
-Smoothed Buying Pressure minus Selling Pressure is falling.
-My Money Trend indicator is declining.
 
On Friday, 21 February, 2 days after the top before the Coronavirus pullback, there were 10 bear-signs and 1 bull-sign. Now there are 3 bear-signs and 18-Bull. Last week, there were 5 bear-sign and 17 bull-signs.
 
The Friday rundown is still giving a solidly bullish indication.
 
Today, the daily sum of 20 Indicators improved from +3 to +6 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations decreased from +71 to 64. (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 remained HOLD: PRICE is positive. VOLUME, VIX & SENTIMENT are neutral.
(The important BUY in this indicator was on 21 October, 7-days after the bottom. My NTSM buy-signal was 27 September, based on improved internals at the retest low, about 2% before the bottom.)
 
Bottom line: I’m a BULL, but I am watching indicators.
 
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
 
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 HOLD. (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 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.
 

GDP ... Durable Orders ... Jobless Claims ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

 “Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
GDP (Yahoo Finance)
“U.S. economic activity expanded faster than expected in the final three months of 2022, marking a resilient end to a year defined by stubborn inflation, rising interest rates, and battered financial markets. The Bureau of Economic Analysis' advance estimate of Q4 U.S. gross domestic product (GDP) showed the economy grew at an annualized pace of 2.9%... Personal consumption expenditures (PCE) — or consumer spending — which comprises roughly two-thirds of domestic activity rose at 2.1% clip...” Story at...
https://finance.yahoo.com/news/us-economy-gross-domestic-product-q4-gdp-growth-recession-131755699.html
 
DURABLE ORDERS (Nasdaq.com / RTT News)
“A report released by the Commerce Department on Thursday showed new orders for U.S. manufactured durable goods soared by much more than expected in the month of December. The Commerce Department said durable goods orders spiked by 5.6 percent in December after tumbling by 1.7 percent in November.” Story at...
https://www.nasdaq.com/articles/u.s.-durable-goods-orders-surge-much-more-than-expected-in-december
 
JOBLESS CLAIMS (The Hill)
“New first-time applications for jobless benefits fell last week, even as major technology and media companies announced thousands of layoffs, according to data released Thursday by the Labor Department. In the week ending Jan. 21, initial claims for unemployment insurance totaled 186,000 after seasonal adjustments, down 6,000 from the previous week’s total of 190,000.” Story at...
https://thehill.com/policy/finance/3831439-jobless-claims-fall-despite-mounting-layoffs-in-tech-sector/
 
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 rose about 1.1% to 4060.
-VIX slipped about 2% to 18.73.
-The yield on the 10-year Treasury rose to 3.515%.
 
PULLBACK DATA:
-Drop from Top: 15.3% as of today. 25.4% max (on a closing basis).
-Trading Days since Top: 267-days.
The S&P 500 is 2.5% ABOVE its 200-dMA & 3% ABOVE its 50-dMA.
*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.
 
MY TRADING POSITIONS:
QLD – (2xNas 100) The XLK bottomed 12 October, about the same time as when the S&P 500 retested its low. QLD seems like a decent bet even though the CNBC crowd doesn’t like Tech.
 
XLK – Technology ETF.
SSO – 2x S&P 500.
XLE – Energy Sector ETF. Low PE; good Dividend; decent momentum.
BA – (Boeing) I am late on this one, but we’ll see.
XLY - Consumer Discretionary ETF.
 
SHY – Short term bonds. 30-day yield is 4.2%. (Trailing 1-year yield is 1.3%.) I’ll hold this, but if the market retests the lows, I’ll sell it and buy stocks.)
 
TODAY’S COMMENT:
Not much new today. There’s some trend in the indicators shifting away from the strong bullish mode we’re in, but that doesn’t mean the rally is over. They could just as easily turn more bullish. We’ll just have to be patient.
 
Today, the daily sum of 20 Indicators slipped from +4 to +3 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations decreased from +81 to 71. (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 slipped to HOLD: PRICE is positive. VOLUME, VIX & SENTIMENT are neutral.
(The important BUY in this indicator was on 21 October, 7-days after the bottom. My NTSM buy-signal was 27 September, based on improved internals at the retest low, about 2% before the bottom.)
 
Bottom line: I’m a BULL, but I am watching indicators.
 
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
 
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
 
THURSDAY MARKET INTERNALS (NYSE DATA)

My basket of Market Internals remained HOLD. (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 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.
 

EIA Crude Inventories ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis

 “Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
EIA CRUDE INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 0.5 million barrels from the previous week. At 448.5 million barrels, U.S. crude oil inventories are about 3% above the five year average for this time of year.” Report at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf
 
IMPORTANT TEST FOR THE MARKETS (Heritage Capital)
“Last night and this morning we heard bad news from Microsoft, MMM and Boeing...I am not surprised at all that companies are guiding lower for Q1. I said that would happen. The key would be how much lower those stocks would go. And I have been crystal clear that any decline less than 5% would be very supportive of the bullish case. We will see in a few days for sure.” – Paul Schatz, President Heritage Capital. Commentary at...
https://investfortomorrow.com/blog/the-test-begins/
 
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 dipped about a point to 4016.
-VIX slipped about 0.6% to 19.08.
-The yield on the 10-year Treasury dipped to 3.448%.
 
PULLBACK DATA:
-Drop from Top: 16.3% as of today. 25.4% max (on a closing basis).
-Trading Days since Top: 266-days.
The S&P 500 is 1.4% ABOVE its 200-dMA & 2.0% ABOVE its 50-dMA.
*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.
 
MY TRADING POSITIONS:
QLD – (2xNas 100) The XLK bottomed 12 October, about the same time as when the S&P 500 retested its low. QLD seems like a decent bet even though the CNBC crowd doesn’t like Tech. We’ll see.
 
XLK – Technology ETF.
SSO – 2x S&P 500.
XLE – Energy Sector ETF. Low PE; good Dividend; decent momentum.
BA – (Boeing) I am late on this one, but we’ll see.
XLY - Consumer Discretionary ETF.
 
SHY – Short term bonds. 30-day yield is 4.2%. (Trailing 1-year yield is 1.3%.) I’ll hold this, but if the market retests the lows, I’ll sell it and buy stocks.)
 
TODAY’S COMMENT:
After Microsoft reported yesterday and the stock was up 4% in afterhours trading, I figured we were in the clear. Unfortunately, during the conference call Microsoft guided lower for this year and that tanked the Nasdaq and markets in the morning.  Markets recovered later in the day – that looks like a bullish sign to me.
 
In addition, the long-term version of the Fosback Hi/Lo Logic indicator issued a buy signal today.  This looks like more confirmation of a bull market, i.e., a return to the prior highs.
 
Today, the daily sum of 20 Indicators slipped from +4 to +2 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations decreased from +89 to 79. (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 remained BUY: PRICE & VOLUME are positive. VIX & SENTIMENT are neutral.
(The important BUY in this indicator was on 21 October, 7-days after the bottom. My NTSM buy-signal was 27 September, based on improved internals at the retest low, about 2% before the bottom.)
 
The Advance / Decline Ratio improved to neutral so this headwind for the market is gone, at least for tomorrow.
 
Bottom line: I’m a BULL, but I am watching indicators closely.
 
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
 
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
 
WEDNESDAY MARKET INTERNALS (NYSE DATA)

My basket of Market Internals remained HOLD. (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 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.

Composite PMI ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

 
“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
MARKIT COMPOSITE PMI (S&P Global)
“Private sector firms in the US registered a further decline in output at the start of 2023, according to latest ‘flash’ PMI™ data from S&P Global. The fall in business activity softened to the slowest in three months, however, as manufacturers and service providers signaled moderations in their respective downturns...Meanwhile, business confidence strengthened at the start of the year. Despite still being below the historic series trend, the degree of optimism was the highest for four months. The pick-up in positive sentiment was broad based, with companies hopeful of a resurgence in customer demand as 2023 progresses.”  Press release at...
https://www.pmi.spglobal.com/Public/Home/PressRelease/40a5dc326b7f46e5a97c9033771d30ff
 
BEAR MARKET ON THIN ICE (Fundstrat / msn.com)
“The strong showing for stocks in January is putting the bear market that started last year "on thin ice," according to Fundstrat's technical strategist Mark Newton...And while the gains could falter in the coming weeks as corporate earnings roll in, it still looks like "an important structural positive which likely turns the trend higher between early February and mid-March," Newton said.” Story at... 
The bear market in stocks is 'on thin ice' as improving technicals challenge the narrative that a recession is near, Fundstrat says (msn.com)
My cmt: We identified the bottom in September (2% early) and it looks like the final bottom was 12 October.
 
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 rose about 0.1% to 4017.
-VIX fell about 3% to 19.20.
-The yield on the 10-year Treasury dipped to 3.464%.
 
PULLBACK DATA:
-Drop from Top: 16.3% as of today. 25.4% max (on a closing basis).
-Trading Days since Top: 264-days.
The S&P 500 is 1.3% ABOVE its 200-dMA & 2.0% ABOVE its 50-dMA.
*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.
 
MY TRADING POSITIONS:
QLD – (2xNas 100) The XLK bottomed 12 October, about the same time as when the S&P 500 retested its low. QLD seems like a decent bet even though the CNBC crowd doesn’t like Tech. We’ll see.
 
XLK – Technology ETF.
SSO – 2x S&P 500.
XLE – Energy Sector ETF. Low PE; good Dividend; decent momentum.
BA – (Boeing) I am late on this one, but we’ll see.
XLY - Consumer Discretionary ETF.
 
SHY – Short term bonds. 30-day yield is 4.2%. (Trailing 1-year yield is 1.3%.) I’ll hold this, but if the market retests the lows, I’ll sell it and buy stocks.)
 
TODAY’S COMMENT:
There was low volume today on the NYSE, about 10% below the average for the month. Looks like investors were waiting to see the Microsoft earnings report. Microsoft was down during normal hours, but Microsoft was up 4% at 4:30 in afterhours trading - investors liked the report.  Revenues missed expectations, but earnings were up. All-in-all, we can conclude results were better than the fear-factor built into the price of the stock. I suspect this will carry over into the market Wednesday and we may see Technology in general continue to improve relative to the markets.
 
Today, the daily sum of 20 Indicators slipped from +6 to +4 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations decreased from +98 to 89. (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 remained BUY: PRICE & VOLUME are positive. VIX & SENTIMENT are neutral.
(The important BUY in this indicator was on 21 October, 7-days after the bottom. My NTSM buy-signal was 27 September, based on improved internals at the retest low, about 2% before the bottom.)
 
At least one Bear sign remains: The Advance / Decline Ratio is overbought, so some short-term weakness is possible. Right now, though, I wouldn’t be surprised to see some fear of missing out (FOMO) buying get going.
 
Bottom line: I’m a BULL, but I am watching indicators closely.
 
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
 
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
 
TUESDAY MARKET INTERNALS (NYSE DATA)

My basket of Market Internals remained HOLD. (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 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.