“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
“New York is poised to become the first state in the U.S.
to pass a law banning
natural-gas and other fossil-fuel hookups in new buildings, a
step Democrats are pushing to help the state meet targets for greenhouse-gas
reduction. The measure is on track to be added to the state’s coming
budget, which is due to be completed this week.” Story at...
https://www.wsj.com/articles/new-york-poised-to-ban-gas-stoves-in-new-buildings-as-part-of-all-electric-mandate-ad8bd655
There is a weirdness to this idea. Currently, about 20% of electricity comes from renewables, but that includes hydropower. We won’t be building any new dams due to environmental concerns. Excluding hydropower, the US generates less than 15% from other renewable sources, wind and solar. Electricity is very expensive for heating, except in the South where heat pumps move heat from outside to inside (like a refrigerator in reverse). But electric heat, as in baseboards or forced air, is very inefficient. In addition, there are losses as the electricity is moved from the power plant to where it is used. The weirdness is that most of the electricity is now generated by natural gas and it will be for a long time, even if we double renewable electricity. Unless NY plans to replace all of its existing fossil fuel power plants with nuclear plants, this makes no sense.
STRESS AHEAD OF [THIS PAST] WEEKEND (Heritage Capital -
Friday)
“A few weeks ago, I said that I didn’t think the low for this pullback was in place just yet. And with the S&P 500 in roughly the same area as a week ago, that probably still holds with the caveat that if we see a strong reversal in the banks, the markets should respond strongly to the upside. Stress remains in the banking system but less so in the markets. This feels like one of those times where markets need more time to repair wounds.” Commentary at...
https://investfortomorrow.com/blog/stress-ahead-of-the-weekend-yellen-her-flip-flops/
Tony Dwyer was on CNBC’s “Fast Money” today. He said that when the LEI has been at current
levels, there has never been a soft landing. I decided to look back at the last
LEI release from about 2 weeks ago. Here’s
the chart. Apparently, I don’t understand his point. Perhaps he meant that when
the LEI fell from its peak as much as now there has always been a recession?
LEADING ECONOMIC INDEX (Advisor Perspectives)
“The most recent financial turmoil in the US banking sector is not reflected in the LEI data but could have a negative impact on the outlook if it persists. Overall, The Conference Board forecasts rising interest rates paired with declining consumer spending will most likely push the US economy into recession in the near term.” - Conference Board Press release.
https://www.advisorperspectives.com/dshort/updates/2023/03/17/cb-lei-down-0-3-in-february-still-pointing-to-risk-of-recession
MARKET REPORT / ANALYSIS
-Monday the S&P 500 rose about 0.2% to 3978.
-VIX slipped about 5% to 20.63.
-The yield on the 10-year Treasury rose to 3.537%.
PULLBACK DATA:
-Drop from Top: 17.1% as of today. 25.4% max (on a closing basis).
-Trading Days since Top: 308-days.
The S&P 500 is 1.2% ABOVE its 200-dMA & 0.9% BELOW 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:
I am not trading as much as in the past. You may wish to use the momentum charts and/or the Monday 40-day gain charts for trading the Dow stocks and ETFs.
QLD – 2xNasdaq 100
SSO – 2x S&P 500
XLK – Technology ETF.
XLE – Energy Sector ETF. It hasn’t been doing much recently, but Russia is cutting production and that should help the sector. We have a good dividend in the meantime.
BA – (Boeing) I am late on this one, but we’ll see. They have more work than they can handle and are hiring. They should do well going forward. Boeing reports earnings 4/26/2023.
XLY - Consumer Discretionary ETF.
KRE – Regional Banking ETF. This is a small position for me. I have no cash left.
SHY – Short term bonds. 30-day yield is 4.6%. (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.)
If it’s not tech, it’s probably not working.
TODAY’S COMMENT:
Markets looked good up until 3pm. After that, not so much. The S&P 500 dropped about ¾% in the last hour of trading. It still finished with a gain for the day so all was not lost.
There were some new bullish indicators which were almost enough
to make me think that the S&P 500 sideways-correction might be ending. (The
Index hasn’t gone very far in 3-weeks and it’s now about the same level it was
3 months ago.) I’d be more confident if the S&P 500 had made a strong finish.
Those bullish signs were:
-The % of New-highs turned up today. That’s bullish after falling for nearly 2 months.
-My Money Trend indicator turned up. (That’s the first time in 3 weeks this indicator has been bullish.
-The McClellan oscillator turned up.
-There was a better than 3 std deviation improvement in new-high/new-low spread.
-82% of volume was up today; that will be a bullish sign if we have another 80+% bullish day Tuesday.
-My ensemble of market internals flipped to bullish.
-This is the highest daily spread (bull minus bear indicators) in over a month for the 20 indicators listed below.
Today, the daily spread of 20 Indicators (Bulls minus
Bears) improved from -2 to +8 (a positive number is bullish; negatives are
bearish); the 10-day smoothed sum that smooths the daily fluctuations improved
from -40 to -24. (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 BUY:
VOLUME IS BULLISH; SENTIMENT; VIX & PRICE are neutral. The big improvement in new-high/new-low
numbers pushed the indicator to Buy.
(The important BUY in this indicator was on 21 October,
7-days after the bottom. For my NTSM overall signal, I suggested that a
short-term buying opportunity occurred on 27 September (based on improved
market internals on the retest), although without market follow-thru, I was
unwilling to call a buy; however, I did close shorts and increased stock
holdings. I issued a Buy-Signal on 4 October, 6-days before the final bottom,
based on stronger market action that confirmed the market internals signal. The
NTSM sell-signal was issued 20 December, 8 sessions before the high of this
recent bear market, based on the bearish Friday rundown of indicators.)
Bottom line: I am a nervous bull. The S&P 500
remained above its 200-dMA, but it has not been able to break above its 50-dMA
for almost 3-weeks.
ETF - 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
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 improved to 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 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.
https://www.wsj.com/articles/new-york-poised-to-ban-gas-stoves-in-new-buildings-as-part-of-all-electric-mandate-ad8bd655
There is a weirdness to this idea. Currently, about 20% of electricity comes from renewables, but that includes hydropower. We won’t be building any new dams due to environmental concerns. Excluding hydropower, the US generates less than 15% from other renewable sources, wind and solar. Electricity is very expensive for heating, except in the South where heat pumps move heat from outside to inside (like a refrigerator in reverse). But electric heat, as in baseboards or forced air, is very inefficient. In addition, there are losses as the electricity is moved from the power plant to where it is used. The weirdness is that most of the electricity is now generated by natural gas and it will be for a long time, even if we double renewable electricity. Unless NY plans to replace all of its existing fossil fuel power plants with nuclear plants, this makes no sense.
“A few weeks ago, I said that I didn’t think the low for this pullback was in place just yet. And with the S&P 500 in roughly the same area as a week ago, that probably still holds with the caveat that if we see a strong reversal in the banks, the markets should respond strongly to the upside. Stress remains in the banking system but less so in the markets. This feels like one of those times where markets need more time to repair wounds.” Commentary at...
https://investfortomorrow.com/blog/stress-ahead-of-the-weekend-yellen-her-flip-flops/
“The most recent financial turmoil in the US banking sector is not reflected in the LEI data but could have a negative impact on the outlook if it persists. Overall, The Conference Board forecasts rising interest rates paired with declining consumer spending will most likely push the US economy into recession in the near term.” - Conference Board Press release.
https://www.advisorperspectives.com/dshort/updates/2023/03/17/cb-lei-down-0-3-in-february-still-pointing-to-risk-of-recession
-Monday the S&P 500 rose about 0.2% to 3978.
-VIX slipped about 5% to 20.63.
-The yield on the 10-year Treasury rose to 3.537%.
-Drop from Top: 17.1% as of today. 25.4% max (on a closing basis).
-Trading Days since Top: 308-days.
The S&P 500 is 1.2% ABOVE its 200-dMA & 0.9% BELOW 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.
I am not trading as much as in the past. You may wish to use the momentum charts and/or the Monday 40-day gain charts for trading the Dow stocks and ETFs.
QLD – 2xNasdaq 100
SSO – 2x S&P 500
XLK – Technology ETF.
XLE – Energy Sector ETF. It hasn’t been doing much recently, but Russia is cutting production and that should help the sector. We have a good dividend in the meantime.
BA – (Boeing) I am late on this one, but we’ll see. They have more work than they can handle and are hiring. They should do well going forward. Boeing reports earnings 4/26/2023.
XLY - Consumer Discretionary ETF.
KRE – Regional Banking ETF. This is a small position for me. I have no cash left.
Markets looked good up until 3pm. After that, not so much. The S&P 500 dropped about ¾% in the last hour of trading. It still finished with a gain for the day so all was not lost.
-The % of New-highs turned up today. That’s bullish after falling for nearly 2 months.
-My Money Trend indicator turned up. (That’s the first time in 3 weeks this indicator has been bullish.
-The McClellan oscillator turned up.
-There was a better than 3 std deviation improvement in new-high/new-low spread.
-82% of volume was up today; that will be a bullish sign if we have another 80+% bullish day Tuesday.
-My ensemble of market internals flipped to bullish.
-This is the highest daily spread (bull minus bear indicators) in over a month for the 20 indicators listed below.
ETF - 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
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 improved to 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.)
