Crude Inventory ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...
“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
“Far
more money has been lost by investors in preparing for corrections, or
anticipating corrections, than has been lost in the corrections themselves.” -
Peter Lynch, former manager of Fidelity’s Magellan® fund.
“The Biden Administration sought to block government funding for school shooting
courses, such as hunting and archery, but the House voted against it this week
by a landslide. The Protecting Hunting Heritage and Education Act was passed in
a 424-1 vote after it was discovered this summer that the Department of
Education was restricting the funding for hunting and archery teaching in
schools.” Story at...
More
Than 200 Democrats Join Republicans To Deliver Crushing Blow To Biden (msn.com)
My cmt: Congress
should do this more often to stop the Executive Branch and administrative
agencies from running the country thru “Rule Making.”
CRUDE INVENTORY (EIA)
“U.S. commercial crude oil inventories (excluding those
in the Strategic Petroleum Reserve) increased by 2.7 million barrels from the
previous week. At 460.0 million barrels, U.S. crude oil inventories are about
1% below the five year average for this time of year.” Report at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 fell about 0.6% to 5022.
-VIX declined about 1% to 18.21. (The Options Players
seem to think the pullback is ending.)
-The yield on the 10-year Treasury declined to 4.589%.
MY TRADING POSITIONS:
QLD- Sold 4/8/2024
UWM – Sold 4/8/2024.
INTC – Sold 4/8/2024.
XLK – Technology ETF (holding since the October 2022
lows). I don’t want to pay taxes on this gain, so I am holding this position.
CRM – Added 1/22/2024
Salesforce was down over 7% Monday. News follows:
“Salesforce (CRM)
is reportedly in advanced talks to acquire data management software company
Informatica (INFA),
according to a Wall Street Journal report. The potential acquisition
would allow Salesforce to boost its data integration and management
capabilities by tapping into Informatica's product suite.” – Yahoo Finance.
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 tax-deferred, retirement account betting on Smaller Caps. (This position
captures smaller cap and micro-cap stocks that are not included in the Dow
Jones US Total Stock Market Index .)
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
Today, the 50-indicator spread (Bulls minus Bears) remained
18 bear-signs and 6-Bull (the rest are neutral).
TODAY’S COMMENT:
Stephen Weiss, Founder and Managing Partner, Short Hills
Capital Partners, is a CNBC regular. He
was on CNBC’s Halftime Report today. Mr. Weiss took his stock holding down to
20% in his portfolio. He says the Fed rate
hikes, “higher-for-longer,” will take the economy down and that he wouldn’t buy
this weakness. Weiss said, “Every time rates have been restrictive, GDP has
gone down markedly.”
First, 20% is an extremely conservative position
indicating extreme fear. I’ve always used a value of 30% invested as my most
conservative stock holding; if there was a market crash that took the stock
market down 50% I would only lose 15%.
Mr. Weiss’s comments are not looking for a short-term
drop since he is citing the economy as his reason for cutting stock
holdings. Interesting, but the economy
is currently great. The unemployment rate is now 3.8%, below the level of 4%
that business schools used to teach as the lowest possible unemployment. The
latest Services PMI was down slightly, but still in expansion. Manufacturing PMI was higher month-over-month
and year-over-year. The economy doesn’t seem to be in trouble. For the time
being, I’m not worried.
Technically, a pullback after the run we have seen is
perfectly normal. At the all-time highs
just 3-weeks ago, 13% of issues on the NYSE made new all-time highs. This is a solid number that in the past has
suggested that if there were to be a correction, it would be less than a 10%
drop.
My guess is that we will not see that big a pullback.
Further, today looks like a bottom; both Bollinger Bands and RSI are
oversold. When that happens, we usually
see a bottom. It would have been nice to see a lot more bottom indicators, but
Mr. Market didn’t cooperate. I did notice that unchanged volume was very high,
Wednesday. As I’ve often said, many believe that this indicator suggests
investor confusion at market turning points. The trend has been down so I would
interpret this signal as predicting a turn up. Still, “High-unchanged-volume”
is not one of my indicators because it is often wrong.
LONG-TERM INDICATOR: The Long Term NTSM indicator improved
to HOLD: PRICE, VIX & SENTIMENT are neutral; VOLUME is bearish.
(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
It looks like the pullback may be over or at least nearly
over. Let’s see if other investors agree – I’ll watch the market action tomorrow. If there is a decent up-day, I’ll add to
stock holdings.
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 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, so this is a fully-invested position.
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.
