Payroll Report ... Unemployment rate ... Hourly Earnings ... Factory Orders ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

 
“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 

Political Commentary from Michael Ramirez at...
https://michaelramirez.substack.com/p/michael-ramirez-kicking-the-can-01?r=ntzh3&utm_campaign=post&utm_medium=web
 
“The Treasury Department is set to release its latest borrowing plan on Wednesday, a once-routine event that lately has fueled market swings thanks to concerns about the federal budget deficit.” – WSJ. Story at...
https://www.wsj.com/finance/investing/what-investors-need-to-know-about-the-u-s-governments-borrowing-plans-40e9a0e2
My cmt: The budget deficit is now affecting stock and bond markets – this can’t end well.  Will it end soon? No one knows.
 
PAYROLL REPORT / UNEMPLOYMENT RATE / HOURLY EARNINGS (Yahoo Finance)
“The US economy created 353,000 nonfarm payroll jobs in January, according to new data from the Bureau of Labor Statistics released Friday, more than the 185,000 expected by economists... The unemployment rate also held steady in January at 3.7% for the third straight month... Wages, a closely watched indicator of inflation and a gauge of how much leverage workers have in the labor market, increased 0.6% on a monthly basis and 4.5% over last year” Story at...
https://finance.yahoo.com/news/january-jobs-report-us-economy-adds-353000-jobs-blowing-past-wall-street-expectations-133251408.html
 
FACTORY ORDERS (US News)
“Factory orders gained 0.2% after rebounding 2.6% in November... Orders increased 0.8% on a year-on-year basis in December.” Story at...
https://money.usnews.com/investing/news/articles/2024-02-02/us-factory-orders-rise-moderately-in-december
 
MARKET REPORT / ANALYSIS
-Friday the S&P 500 rose about 1.1% to 4959.
-VIX declined slightly to 13.85.
-The yield on the 10-year Treasury declined to 4.024. (The Bond market didn’t like the jobs report. We’re seeing plenty of signs of slowing economy, just not in the jobs market.)
 
MY TRADING POSITIONS:
UWM – Added 1/22/2024. It had a weak day today based on higher interest rates.
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:
The jobs report was a blowout to the up side – good for employees, but it shows an economy that may be too strong for the Federal Reserve.  I have a friend who has an MBA.  He was taught in business school that 4% was the lowest possible unemployment rate. Now, it’s 3.7% suggesting a hot economy that may drive inflation higher because of worker shortages. “Higher for longer” was the Fed’s mantra regarding interest rates.  Today, the expectation is possibly for a lot longer.
 
We look at a summary of indicators on Friday. (These indicators tend to be both long-term and short-term, so they are different than the 20 that I report on daily.) The weekly rundown of indicators remained Bullish this week: now 5-bear and 18-bull.
 
BULL SIGNS
-The smoothed advancing volume on the NYSE is rising.
-The 10-dMA percentage of issues advancing on the NYSE (Breadth) is above 50%.
-The 50-dMA percentage of issues advancing on the NYSE (Breadth) is above 50%.
-The 100-dMA percentage of issues advancing on the NYSE (Breadth) is above 50%
-Issues advancing on the NYSE (Breadth) compared to the S&P 500.
-MACD of S&P 500 price made a bullish crossover 22 Jan.
-My Money Trend indicator.
-Short-term new-high/new-low data.
-There was a New-high/New-low spread reversal on 4 October (based on std deviation of spread). Expired
-Slope of the 40-dMA of New-highs is rising.
-The graph of the 100-day Count (the 100-day sum of up-days).
-The Smart Money (late-day action).
-On average, the size of up-moves has been larger than the size of down-moves over the last month.
-There was a high up-volume day on 21 December canceling the High down-volume day on 20 December. In addition, there were back-to-back, high up-volume days (80%+) on the NYSE 13 & 14 Dec.
-S&P 500 spread vs. Utilities (XLU-ETF).
-The 5-10-20 Timer System is BUY.
-The short-term momentum is bullish.
-61% of the 15-ETFs that I track have been up over the last 10-days. (45-55% is neutral.)
 
NEUTRAL
-There was a Distribution Day 31 Jan, but one does not send a signal.
-There have been 4 Statistically-Significant days (big moves in price-volume) in the last 15-days.
-Sentiment. (Sentiment got very bearish recently due to the continued march higher. Too much bearishness is bullish, but it is back to neutral now.)
-Bollinger Bands.
-The Bollinger Squeeze has cleared.
-Overbought/Oversold Index (Advance/Decline Ratio).
-The 50-dMA percentage of issues advancing on the NYSE (Breadth) has not been below 50%  for more than 3 days in a row.
-The S&P 500 is almost 11.6% above its 200-dMA. (Neutral for now, but the Bear indicator is 12% above the 200-day.)
-6% of all issues traded on the NYSE made new, 52-week highs when the S&P 500 made a new all-time-high, 2 February 2024. (There is no bullish signal for this indicator.)
-The short-term, 10-day EMA, Fosback Hi-Low Logic Index.
-The long-term, 50-dEMA, Fosback Hi-Low Logic Index.
-There have been 13 up-days over the last 20 sessions.
-There have been 7 up-days over the last 10 sessions.
-RSI.
-The Calm-before-the-Storm/Panic Indicator flashed a top warning signal 15 Sept., but it may well have been a bottom signal. - Expired
-VIX indicator.
-There were Hindenburg Omen signals 11 & 12 Sept 2023 – expired. The McClellan Oscillator turned positive.
-20 December there was a Bearish Outside Reversal Day, but the S&P 500 closed above the high for 20 December, 4778, on 27 & 28 December so this one is now neutral.
-There was a Zweig Breadth Thrust 3 November. That’s a rare, very-bullish sign, but the McClellan Oscillator turned negative ending this signal.
 
BEAR SIGNS
-MACD of the percentage of issues advancing on the NYSE (breadth) made a bullish crossover 22 January.
-Smoothed Buying Pressure minus Selling Pressure.
-Long-term new-high/new-low data.
-McClellan Oscillator.
-XLI-ETF (Cyclical Industrials) vs the S&P 500.
 
On Monday’s update of the Friday summary of indicators (20 December 2021), 9 days before the top of the 2-year long 25% correction, there were 21 bear-signs and zero bull-signs. Now there are 5 bear-signs and 18-Bull. Last week, there were 5 bear-sign and 20 bull-signs.
 
The daily spread of 20 Indicators (Bulls minus Bears) improved from +2 to +5 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations improved from +33 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 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.
 
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
 
FRIDAY 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.