ADP Employment Change ... 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.
“I do think that [Attorney General] Merrick
Garland did not proceed as fast as he might have...If the next
presidency is held either by Donald Trump or by one of his acolytes or by
virtually any Republican, there is the horrible prospect that this will all be
wiped away...And that it will be relegated to a kind of a historic
footnote.” - Laurence Tribe, Constitutional Lawyer at Harvard, discussing
the recent Trump indictment.
ADP EMPLOYMENT CHANGE (CNBC)
“Private sector companies added far more jobs than
expected in July, pushed higher by a boom in leisure and hospitality jobs,
payroll processing firm ADP reported Wednesday.
Job gains for the month came to 324,000, driven by a
201,000 jump in hotels, restaurants, bars and affiliated businesses.” Story
at...
https://www.cnbc.com/2023/08/02/private-sector-added-324000-jobs-in-july-well-above-expectations-adp-says.html
EIA CRUDE INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those
in the Strategic Petroleum Reserve) decreased by 17.0 million barrels from the
previous week. At 439.8 million barrels, U.S. crude oil inventories are
approximately 1% below the five-year average for this time of year.” Story
at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 was down about 1.4% to 4513.
-VIX rose about 16% to 16.09.
-The yield on the 10-year Treasury rose to 4.090.
PULLBACK DATA:
-Drop from Top: 5.9%. 25.4% max (on a closing basis).
-Trading Days since Top: 396-days.
The S&P 500 is 10.4% ABOVE its 200-dMA
(overbought) and 2.7% 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.
XLY - Consumer Discretionary ETF.
KRE – Regional Banking ETF.
I SOLD KRE today.
I had a 10% gain (since March) and the banks may have more risk in what
may be perceived as a downturn - figured I’d take the profit.
SHY – Short term bonds.
TODAY’S COMMENT:
The big move down today may have signaled the official
start of a pullback, but nothing is ever certain when trying to guess
short-term moves. As noted yesterday, all pundits on the CNBC Halftime Report
were suggesting a pullback is coming soon. That’s always a warning – the market
almost never does what the majority expects.
We have been expecting a pullback, so today’s drop is not
a surprise. Looking at the chart, a drop to around 4200 is possible. That’s around the 100-dMA and would be a drop
of about 7% below today’s close. I’ve
been suggesting a smaller pullback.
Smaller is likely as dip-buyers move in.
The above indicator is Breadth vs the S&P 500. It improved today and it will continue to
improve if the Index falls which will bring Breadth and the Index back into
balance.
The daily spread of 20 Indicators (Bulls minus Bears) declined
from -3 to -6 (a positive number is bullish; negatives are bearish); the
10-day smoothed sum that smooths the daily fluctuations declined from +6
to -5. (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, VIX, VOLUME & SENTIMENT 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 21 December, 9 sessions before the high of this
recent bear market, based on the bearish “Friday Rundown” of indicators.)
Bottom line: I remain a cautious Bull. A pullback is
needed to bring the markets back into balance.
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
WEDNESDAY MARKET INTERNALS
(NYSE DATA)
My basket of Market Internals declined to SELL. (My basket of Market
Internals is 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 50% 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 as I did back in October.
