ISM Manufacturing ... Construction Spending ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
ISM MANUFACTURING (ISM via prnewswire)
"The April Manufacturing PMI® registered 47.1 percent, 0.8 percentage point higher than the 46.3 percent recorded in March. Regarding the overall economy, this figure indicates a fifth month of contraction after a 30-month period of expansion.”  Press release at... 
https://www.prnewswire.com/news-releases/manufacturing-pmi-at-47-1-april-2023-manufacturing-ism-report-on-business-301811325.html
 
CONSTRUCTION SPENDING (Marketplace.org)
"In March, construction spending grew 3.8% from a year earlier, according to new data from the U.S. Census Bureau. Fueled by an increase in commercial building, the sector remains booming. That’s good news for construction workers, who are still in short supply and commanding higher wages. But the resilience of this usually interest rate-sensitive sector makes the Federal Reserve’s goal of taming inflation that much harder.” Story at...
https://www.marketplace.org/2023/05/01/commercial-construction-is-booming/
The article pointed out that the surge in construction is due to Federal dollars.
 
MARKET REPORT / ANALYSIS
-Monday the S&P 500 slipped about a point to 4168.
-VIX rose about 2% to 16.08.
-The yield on the 10-year Treasury rose to 3.573%.
 
PULLBACK DATA:
-Drop from Top: 13.1% as of today. 25.4% max (on a closing basis).
-Trading Days since Top: 332-days.
The S&P 500 is 5.1% ABOVE its 200-dMA and 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 and we called a buy on 4 October 2022.
 
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.
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 reported 4/26/2023. It had good numbers and gave good guidance.  While BA bounced on the news, it is down about 1% since it reported.
 
XLY - Consumer Discretionary ETF.
KRE – Regional Banking ETF. This is a small position for me.
SHY – Short term bonds. 30-day yield is 4%. (Trailing 1-year yield is 1.6%.) I’ll hold this, but if the market retests the lows, I’ll sell it and buy stocks.)
 
TODAY’S COMMENT:
It appears that Markets are treading water (not going anywhere) until the Fed announcement.
 
The late-day action (when the Pros trade) is down.
 
Today, the daily spread of 20 Indicators (Bulls minus Bears) declined from +2 to -1 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations improved from -25 to -23. (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 declined to HOLD: PRICE is positive; SENTIMENT, VIX & VOLUME are neutral.
 
(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 cautious Bull. All eyes are on the Fed.  They will announce Wednesday. I would not be surprised to see a comment from them that markets will interpret as bearish.
 
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 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 65% 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.