FED Beige Book ... 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 above picture proves the Moon landings were fake? The people who believe that are the same folks who believe Trump won the 2020 election, the CIA killed JFK and the Twin Towers were brought down by the US Government. (FYI, the photo was taken during astronaut training at Kennedy Space Center – not the moon.) Oh yeah, here’s another one... Coronavirus was fake.  My nurse-daughter heard that one from patients (“I can’t be dying; Covid is fake.”) at her hospital early in the pandemic.
 
ARE BIDEN OFFICIALS COVERING UP A TERROR ATTACK BY ILLEGAL IMMIGRANTS (New York Post)
“By refusing repeated chances to answer simple questions about a May 3 incident at Quantico Marine Corps base, the Biden administration has essentially confirmed one of America’s worst — and most politically consequential — nightmares related to the ongoing border crisis. Two illegal immigrants just attempted a terror attack on US soil.” Story at...
Are Biden officials covering up an attempted terror attack by illegal immigrants? (msn.com)
 
BUY THIS LEGISLATION OR WE’LL KILL THE INTERNET (WSJ)
“Repealing Section 230 [it sunsets 31 December 2025] without a plan to replace it is a bipartisan idea—and a terribly reckless one.
The law in question is Section 230 of the 1996 Communications Decency Act. The statute provides that the person who creates content online is legally responsible for it and that websites aren’t liable for efforts to moderate their platforms to make them more welcoming, useful or interesting... Recent history suggests Congress won’t meet its self-imposed deadline. It’s best to judge this latest exercise in brinkmanship for what it is: A reckless ploy to repeal Section 230 without a plan to replace it.” Story at...
https://www.wsj.com/articles/buy-this-legislation-or-well-kill-the-internet-9184202b
My cmt: Blaming “Big Tech” is popular, but if platforms are responsible for the posts of nut-case, whakos the internet will be profoundly different and probably not for the better. Is the phone company liable if someone is harassed on the telephone?
 
FED BEIGE BOOK (RTT News)
“U.S. economic activity continued to expand from early April to mid-May, according to the Federal Reserve's Beige Book, although conditions varied across industries and districts... Several Districts reported that wage growth was at pre-pandemic historical averages or was normalizing toward those rates... The report also said prices increased at a modest pace over the reporting period and are expected to continue to grow at a modest pace in the near term.” Story at...
https://www.rttnews.com/3450960/fed-s-beige-book-says-u-s-economy-continued-to-expand-prices-rose-modestly.aspx
 
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 declined about 0.8% to 5267.
-VIX rose about 11% to 14.28 so the Options players are worried.
-The yield on the 10-year Treasury rose to 4.736%.
 
MY TRADING POSITIONS:
UWM – Added 5/2/2024
QLD – Added 4/29/2024
SSO – Added 4/29/2024.
XLE – Added 4/24/2024
 
CRM – Added 1/22/2024.
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.
 
DWCPF - Dow Jones U.S. Completion Total Stock Market Index. – Added 12/7/2023 when I sold the S&P 500.
“The Dow Jones U.S. Completion Total Stock Market Index, also known as the DWCPF, is a widely used financial index that provides a comprehensive measure of the US equity market. The DWCPF includes all US stocks that are not included in the Dow Jones US Total Stock Market Index, which comprises large-cap and mid-cap companies. As a result, the DWCPF provides a complete picture of the US stock market, including small-cap and micro-cap companies, which are often overlooked by other indexes.” From...
https://fi.money/blog/posts/what-is-dow-jones-u-s-completion-total-stock-market-index-dwcpf
 
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
The Bull/Bear Spread (Bull Indicators minus Bear Indicators) continued its trend toward bearish. Today there were 14 Bear-signs and 9-Bull. (The rest are neutral. It is normal to have a lot of neutral indicators since many of those are top or bottom indicators that will signal only at extremes.) The 10-dMA of spread (purple line in the chart below) was down again today.
 

TODAY’S COMMENT:
Indicators are now bearish, but not extremely so.  The S&P 500 is 1.7% above it 50-dMA.  That is normally the lower trend line so I am not making moves in the portfolio yet. So far, weakness is perfectly normal. I’ll need to look at the leveraged positions tomorrow; I don’t like to take losses in those trades.
 
Salesforce tanked today, down 16% afterhours.
“Salesforce (CRM) shares are sinking after Wednesday's market close as the cloud computing company reported mixed first-quarter earnings results. Salesforce posted $9.13 billion in revenue ($9.15 billion expected) and gains of $2.44 per share ($2.38 per share expected). The downward stock pressure is heavily attributed to Salesforce's miss on second-quarter forecasts.” From...
https://finance.yahoo.com/video/salesforce-stock-sinking-q2-earnings-202330512.html
 
I don’t see enough bear signs to make significant changes to the portfolio at this time, although I will consider selling leveraged positions.
 
LONG-TERM INDICATOR: The Long Term NTSM indicator remained HOLD: PRICE is bullish; VOLUME, VIX & SENTIMENT are neutral.
(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 cautiously 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)
 

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 Bearish. (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, so this is a bullish, over-invested position. This is my max % for stock allocation.
 
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, usually by using an S&P 500 ETF as I did back in October 2022 and 2023.