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

  

“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
“Think about the year 1970...That’s the year we hit a trillion-dollar GDP, and the year Jimmy Page and Robert Plant wrote that great song ‘Stairway to Heaven.’ A great year, right? Well today we’re emitting roughly 6,500 million metric tons of CO2. Same thing we were emitting in 1970. And look how much more electricity we’re using, and look how many more transportation and miles we’re driving. We’ve expanded the economy 30 times over, nearly, and core CO2 has stayed flat. We should be celebrating this achievement, shouldn’t we? ... look, I’m anxious to get beyond petroleum, but how are we going to do it? What’s the game plan? And how do we do it without screwing the bottom 80% of the world, who just try to make it day to day?” – Peter Huntsman, CEO and chairman of Huntsman Corp., a multinational chemical manufacturing company. From...
https://www.wsj.com/articles/a-ceo-who-doesnt-equivocate-about-climate-global-warming-net-zero-emissions-ceo-corporate-e21a5d40?mod=itp_wsj&ru=yahoo
 
“Biden’s Monumental Gift to Putin. With a stroke of his pen, President Biden on Tuesday walled off from development nearly a million acres of land that includes some of America’s richest uranium deposits. This is another monument to the Administration’s destructive energy policy.” – WSJ Opinion.
 
MARKET REPORT / ANALYSIS
-Monday the S&P 500 rose about 0.7% to 4400.
-VIX slipped about 1% to 17.13.
-The yield on the 10-year Treasury was 4.357
 
PULLBACK DATA:
-Drop from Top: 8.3%. 25.4% max (on a closing basis).
-Trading Days since Top: 409-days.
The S&P 500 is 6.5% ABOVE its 200-dMA and 1.1% 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 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. (I bought more XLY Monday.)
 
TODAY’S COMMENT:
We missed the selling today.  The theory is that after 3 weeks of market downturn, investors brood over the weekend, sell on Monday leading to a market bottom on Tuesday.  That’s not happening this time. Indicators suggested Friday was the bottom. If it wasn’t, we may have to wait till next Monday to see a bottom.
 
The daily spread of 20 Indicators (Bulls minus Bears) remained -4 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations improved from -67 to -62. (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: VOLUME is bearish; VIX, PRICE & SENTIMENT are neutral. There are a lot of oversold signs suggesting markets may be in the vicinity of an oversold bottom.
 
(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. The correction may not be over, but markets are getting closer to a bottom. The 100-dMA is now about 4300. The lower trend line (going back to the October 22 lows) is around 4200. It is not likely we’ll see a low much lower than 4200-4300.
 
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 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 60% 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.