FED Rate Decision ... Chicago PMI ... ADP Employment ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

 
“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
SUPREME COURT FLOODED WITH AMICUS BRIEFS ON 14TH AMENDMENT CASE (Colorado Newsline)
“High court scheduled to hear oral argument Feb. 8...
Constitutional law experts, state elections officials and a long list of Republican political figures are among those who have flooded the U.S. Supreme Court with their views on a landmark Colorado ruling blocking former President Donald Trump from the state’s 2024 ballot under a Civil War-era insurrection clause... About two-thirds of the 47 amicus briefs filed in the case as of Jan. 26 came from parties supporting Trump’s appeal, including nearly 200 Republican members of Congress, officeholders in over 25 GOP-controlled states and several of Trump’s former rivals for the Republican presidential nomination.” Story at...
https://coloradonewsline.com/2024/01/29/supreme-court-briefs-trump-colorado/
 
KEEP TRUMP OFF THE BALLOT (CNN)
“A former conservative federal appellate judge is urging the Supreme Court to keep Donald Trump off the ballot, arguing the ex-president’s effort to cling to power after his 2020 election loss was “broader” than South Carolina’s secession from the US that triggered the Civil War. ‘Mr. Trump tried to prevent the newly-elected President Biden from governing anywhere in the United States. The South Carolina secession prevented the newly-elected President Lincoln from governing only in that State,’ J. Michael Luttig, a former judge on the 4th US Circuit Court of Appeals, told the justices in a friend-of-the-court brief filed Monday.” Story at...
https://www.cnn.com/2024/01/29/politics/luttig-conway-supreme-court-trump-insurrection/index.html
My cmt: I have no guess where this case will go. There are a lot of legal issues in the case and they all must go against Trump for him to be disqualified.
 
FED RATE DECISION (CNBC)
“Fed Chairman Jerome Powell said Wednesday that the central bank would likely not be comfortable enough with the path of inflation by its next meeting in March to cut interest rates. ‘Based on the meeting today, I would tell you that I don’t think it’s likely that the committee will reach a level of confidence by the time of the March meeting to identify March as the time to do that... The central bank’s next two policy decision dates are scheduled for March 20 and May 1.” Story at...
https://www.cnbc.com/2024/01/31/fed-chief-jerome-powell-says-a-march-rate-cut-is-not-likely.html
 
CHICAGO PMI (Advisor Perspectives)
“The latest Chicago Purchasing Manager's Index (Chicago Business Barometer) fell to 46.0 in January from 47.2 in December. The latest reading is worse than the 48.0 forecast and keeps the index in contraction territory for a second straight month.” Details at...
https://www.advisorperspectives.com/dshort/updates/2024/01/31/chicago-pmi-falls-in-january
 
ADP EMPLOYMENT CHANGE (ADP via prnewswire)
“Private sector employment increased by 107,000 jobs in January and annual pay was up 5.2 percent year-over-year... ‘Progress on inflation has brightened the economic picture despite a slowdown in hiring and pay," said Nela Richardson, chief economist, ADP. "Wages adjusted for inflation have improved over the past six months, and the economy looks like it's headed toward a soft landing in the U.S. and globally.’" Press release at...
https://www.prnewswire.com/news-releases/adp-national-employment-report-private-sector-employment-increased-by-107-000-jobs-in-january-annual-pay-was-up-5-2-302049287.html
 
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 slipped about 1.6% to 4846.
-VIX rose about 8% to 14.35.
-The yield on the 10-year Treasury declined to 3.954. (Declines in the 10-yr have been good for stocks recently – let’s hope that trend continues.)
 
MY TRADING POSITIONS:
UWM – Added 1/22/2024
XLK – Technology ETF (holding since the October 2022 lows).
INTC – Added 12/6/2023.
Intel beat on income and revenue, but guidance was poor for the coming quarter.
“For the first quarter of fiscal 2024, Intel expects earnings per share of 13 cents on between $12.2 billion and $13.2 billion in sales, versus LSEG expectations of 33 cents per share on $14.15 billion of revenue.” From...
https://www.cnbc.com/2024/01/25/intel-intc-earnings-report-q4-2023.html
 
CRM – Added 1/22/2024
BA – Added 12/6/2023. I plan to hold Boeing for the time being.
DWCPF - Dow Jones U.S. Completion Total Stock Market Index. – Added 12/7/2023 when I sold the S&P 500. This is a large position in my retirement account betting on Small Caps.
 
TODAY’S COMMENT:

Fed Chair Jay Powell didn’t win any popularity contests on Wall Street today. Markets tanked during the Fed press conference. There was no expectation that the Fed would cut rates today, but apparently the statement that a cut in March was “unlikely” caused weakness to turn into a selloff. It seemed odd to me, but Fed funds futures suggested that the odds were 65% that they were going to cut in March. The odds had been below 50% until some of the economic news showed slowing in the economy recently.
 
“Boeing (BA) reported a better-than-expected loss in the fourth quarter early Wednesday. Boeing stock surged at the opening bell. The Dow Jones aerospace leader declined to provide a 2024 guidance amid its 737 Max-9 production issues during the earnings call.” Details at...
https://www.investors.com/news/boeing-narrows-loss-737-max-fallout/?src=A00220
I haven’t decided what to do with Boeing.  I’m holding it for now. It was up over 5% today, even with the ongoing market weakness.
 
Wednesday was a statistically significant up down-day. That just means that the price-volume move exceeded my statistical parameters. Statistics show that a statistically-significant, up down-day is followed by an down  up-day about 60% of the time. [I need to fire my proof reader.]
 
There’s a lot of guesswork now regarding where the lower trend line is. If one draws a chart of the S&P 500 going back to the October 2023 lows and extends the bottom trend line thru the 17 Jan 2024 low, then Wednesday’s value of the S&P 500 is sitting on the lower trend line.  That would be a bullish sign since we don’t expect the lower trend line to be broken by much if at all. Conversely, the S&P 500 is about 3% above its 50-dMA and that point is often around the lower trend line. The S&P 500 futures are now (8pm Wednesday) up about 0.2%, so I’ll take the bullish case and hope this weakness is ending.
 
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 improved from +6 to +21. (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 bullish; VOLUME, SENTIMENT & VIX are neutral.
(One warning: The Long-Term Indicator is not a good top-indicator. It can signal BUY at a top.)
 
(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. I’ll be watching for weak indicators that might signal a reversal. So far, all is well; indicators have declined, but not that much..
 
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 remained BUY. (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 65% stocks, including stock mutual funds and ETFs. I’m usually about 50% invested in stocks. I’m “over invested” now expecting continuation of bullish market action.
 
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.