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.
 
JOBLESS CLAIMS (Reuters)
“ The number of Americans filing new claims for unemployment benefits increased moderately last week, suggesting that the labor market was gradually losing momentum as higher borrowing costs curb demand in the broader economy... Initial claims for state unemployment benefits rose 1,000 to a seasonally adjusted 220,000 for the week ended Dec. 2...” Story at...
https://www.reuters.com/markets/us/us-weekly-jobless-claims-increase-slightly-2023-12-07/
 
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 rose about 0.8% to 4586.
-VIX rose about 1% to 13.06.
-The yield on the 10-year Treasury dipped to 4.148%.
 
PULLBACK DATA:
-Drop from Top: 4.3%. 25.4% max (on a closing basis).
-Trading Days since All-Time Top: 485-days. (The top was 3 January 2022.)
The S&P 500 is 6.8% ABOVE its 200-dMA and 4.8% ABOVE its 50-dMA.
*I won’t call the correction over until the S&P 500 makes a new-high; however, evidence suggests the major bear-market bottom (25% decline) was in the 3600 area and we called a buy on 4 October 2022.
 
MY TRADING POSITIONS:
XLK – Technology ETF (holding since the October 2022 lows).
XLY - Consumer Discretionary ETF. (Holding since the October 2022 lows - I bought more XLY 8/21.)
 
I took profits and then reestablished positions as follows:
SSO – 2x S&P 500 ETF. Added 8/24.
QLD – Added 8/30.
 
INTC – Added 12/6/2023.
BA – Added 12/6/2023. Boeing has been doing well recently.  They have the orders for new planes – can they execute? I’m guessing yes, since the market seems to think they will.
 
SPY – SOLD in retirement plan.
DWCPF - Dow Jones U.S. Completion Total Stock Market Index. – Bought in retirement plan 12/7/2023. This is a broad market index made up of stocks of small-to-medium U.S. companies not included in the S&P 500 Index. (It’s what my retirement plan offers for small cap. It is the “S” Fund in TSP.)
 
TODAY’S COMMENT:
There is one indicator that has turned Bearish recently.  It’s my comparison of issues advancing on the NYSE (Breadth) vs the S&P 500.  The S&P 500 is now too far ahead of underlying breadth.  This was a very good indicator until the last 2 years or so. I won’t get concerned unless other indicators turn bearish. After a bottom, price will often get too far ahead of technical. That’s a little of what is going on now since we just got out of the 10% correction territory. Can we finally break above the all-time high of 4797 and put an end to the 25% correction that bottomed back in October of 2022? Most certainly, but my prediction that is would happen this year is still in doubt.  
 
Indicators are trending down slightly, but that seems normal given that the markets are working off overbought conditions.
 
The daily spread of 20 Indicators (Bulls minus Bears) declined from +6 to +3 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations declined +44 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 dipped to HOLD: PRICE is bullish; VIX, VOLUME & SENTIMENT are neutral.
 
(The important major BUY in this indicator was on 21 October 2022, 7-days after the bear-market 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 bullish.
 
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
 
THURSDAY MARKET INTERNALS (NYSE DATA)

My basket of Market Internals remained HOLD. (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 75% stocks, including stock mutual funds and ETFs. I’m usually about 50% invested in stocks. I’m “over invested” now expecting new, all-time highs this year. That burns all the cash.  I have about 25% of the portfolio in bonds.
 
I trade about 15-20% of the total portfolio using the momentum-based analysis I provide here. When I see a definitive bottom, I add a lot more stocks to the portfolio using an S&P 500 ETF as I did back in October.