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.
“I absolutely hate everyone here that is doing this
[trying to support Ukraine]. I mean, I seriously hate them for doing this to
the American people and paying for the murder and slaughter of people in
Ukraine. Vladimir Putin has not said that he wants to go march across Europe
and take Europe.” – Marjorie Taylor Greene (R-GA),
“Once again Moscow Marge is busy deploying her Kremlin
talking points. Is she a useful idiot or is she intentionally spreading Putin's
lies? Either way it's pathetic and unAmerican.” – Liz Cheney, former Republican
Congresswoman.
THE GREEN ENERGY PRICE SHOCK (WSJ)
“Do White House officials pay electric bills? They
strangely keep saying the President’s climate agenda is reducing electric-power
rates even as the cost of running your dishwasher is sky-rocketing, as
illuminated by the Labor Department’s consumer-price index... Electric rates
remained relatively flat in the seven years before President Biden took office,
rising 5%. Thank cheap natural gas. Yet since January 2021 electricity prices
have soared 29.4%—about 50% more than overall inflation... Federal regulations,
renewable subsidies and state green-energy mandates are forcing fossil-fuel and
nuclear plants to retire prematurely... By driving more baseload power plants
out of business, IRA [The Inflation Reduction Act ] subsidies will increase
electric bills even more.... The Inflation Reduction Act may be the biggest
legislative misnomer of all time.” WSJ Editorial at...
https://www.wsj.com/articles/electricity-prices-biden-green-energy-labor-department-2b4ea2cb
SEASONAL POSITIVE TAILWIND (Heritage Capital)
“Regarding the Middle East, I have two schools of
thoughts. First, Iran’s retaliation on Israel was symbolic and not the start of
anything big. Why send slow moving drones that they knew would be intercepted.
They needed to save face among their people. The second thought is that the
attack was just a test run to see who would defend Israel, with what weapons
and to what extent. The real attack would be forthcoming... the most bullish
scenario has stocks bottoming this week. That is still not my base case, but it
remains a possibility. It would be easier if we saw a seasonal bounce for 1-3
days with another move lower into month-end. That would set up nicely for a better
and more long-lasting rally.” Paul Schatz, President Heritage Capital. Commentary
at...
https://investfortomorrow.com/blog/seasonally-positive-tailwind-against-middle-east-escalation/
MARKET REPORT / ANALYSIS
-Monday the S&P 500 fell about 1.2% to 5062.
-VIX rose about 11% to 19.23.
-The yield on the 10-year Treasury rose to 4.610%.
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% today. 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 .)
TODAY’S COMMENT:
Today’s chart was not pretty. I thought when the futures were up in the
morning it was a sign that the weakness was over. That was not to be. It’s hard to say whether today
was follow thru from last week, or simply a reaction to the news in the middle
east. With Iran’s attack on Israel,
weak market action today is not a surprise. Either way, we’ll look at indicators.
Today’s market internals were not good and the spread for
the Summary of 50-Indicators remained bearish. There are now 18 bear-signs and 7-Bull.
There are some bottoming signs.
Bollinger Bands are oversold and RSI is very close to an
oversold signal. When they are both oversold it is usually a good buy signal –
not there yet. The S&P 500 slipped about 1% below its 50-dMA. There is support around 5000 so perhaps the
Index will find its bottom with another 1% drop.
Today was another statistically-significant, down-day.
That just means that the price-volume move exceeded my statistical parameters.
Statistics show that a statistically-significant, down-day is followed by an
up-day about 60% of the time. Bottoms
often occur on statistically-significant, down-days, so today could be the end
of the pullback. Unfortunately, all statistically-significant, down-days are
not bottoms so we can’t be certain that weakness is over.
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
Today, there are 18 bear-signs and 7-Bull.
LONG-TERM INDICATOR: The Long Term NTSM indicator slipped
to SELL: PRICE & SENTIMENT are neutral; VIX & VOLUME are 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
I am bullish longer-term, but still Neutral for now. I
took profit in some positions last week. I may trim more, but that will depend
on the indicators. If we see consecutive closes below the 50-dMA on the S&P
500, it will be a concern; but there are some positive signs showing up. Bollinger
Bands are signaling buy and RSI is almost there.
The S&P 500 is 3.7% below its all-time high. My guess
is that the markets will retreat a little farther until we see some bottom
indications.
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 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.
