FED Meeting ... ADP Employment ... ISM Manufacturing PMI ... 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.
 
BIDEN’S PLAN TO RATION ELECTRICITY (WSJ)
“The Biden Administration’s regulations are coming so fast and furious that it’s hard even to keep track, but we’re trying. On Thursday the Environmental Protection Agency proposed its latest doozy—rules that will effectively force coal plants to shut down while banning new natural-gas plants.... EPA is also replacing the Obama Clean Power Plan that the Supreme Court struck down with a rule requiring that coal plants and new gas-fired plants adopt costly and unproven carbon-capture technology by 2032... carbon capture uses 20% to 25% of the electricity generated by a power plant, less will be available to the grid... All of this will hit while demand for power is surging... Meantime, China has added about 200 gigawatts of coal power over the last five years—about as much as the entire U.S. coal fleet. The Biden fossil-fuel onslaught will have no effect on global temperatures.” – WSJ Editorial Staff...
https://www.wsj.com/articles/environmental-protection-agency-rules-power-plants-fossil-fuels-coal-natural-gas-b6d2ea72
 
FED MEETING (CNBC)
“Federal Reserve Chair Jerome Powell said it was unlikely that the central bank’s next move will be a rate hike. The comment spurred a rally for the three major averages, with the Dow surging more than 500 points in its session high. Central bank policymakers kept rates steady at the conclusion of their May meeting, holding at a range of 5.25% to 5.5%.” Story at...
https://www.cnbc.com/2024/05/01/fed-meeting-today-live-updates-on-may-fed-rate-decision.html
My cmt: The market didn’t like the Fed comment that there was a ‘lack of further progress’ on inflation. The Fed statement said, “The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent,”
 
ADP EMPLOYMENT REPORT (ADP)
“Hiring was broad-based in April. Only the information sector — telecommunications, media, and information technology — showed weakness, posting job losses and the smallest pace of pay gains since August 2021.” Report at...
https://adpemploymentreport.com/
 
ISM MANUFACTURING PMI (ISM)
“The Manufacturing PMI® registered 49.2 percent in April, down 1.1 percentage points from the 50.3 percent recorded in March. The overall economy continued in expansion for the 48th month after one month of contraction in April 2020. (A Manufacturing PMI® above 42.5 percent, over a period of time, generally indicates an expansion of the overall economy.)” Report at...
https://www.ismworld.org/supply-management-news-and-reports/reports/ism-report-on-business/pmi/april/
 
CRUDE INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 7.3 million barrels from the previous week. At 460.9 million barrels, U.S. crude oil inventories are about 3% below the five year average for this time of year.” Report at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf
My cmt: Rising inventories led to falling prices and we see that reflected in the XLE today, down 1.6%.
 
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 slipped about 0.3%% to 5018.
-VIX declined about 2% to 15.39.
-The yield on the 10-year Treasury declined to 4.641%.
 
MY TRADING POSITIONS:
QLD – Added 4/29/2024
SSO – Added 4/29/2024.
 
XLE – Added 4/24/2024
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
 
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) slipped, but is close to Neutral with 12 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 chart below continues to look bullish. The 10-dMA of the 50 Indicator Spread (Bulls minus Bears) is clearly moving higher. That is associated with a rising S&P 500.
 

TODAY’S COMMENT:
 

Weird day! When the FED speaks, all Hell breaks loose? “Help me, Obi-Wan Jay Powell. You're my only hope.” The Markets liked it when the Fed Chairman Powell said the next move won’t be a rate hike, but then didn’t like the Fed comment on the lack of progress on reducing inflation. Perhaps the Fed motto is “...you can't please everyone, so you got to please yourself.”
 
Market internals were bullish today. Advancing issues outpaced decliners; new-highs were well higher than new-lows, and advancing volume was higher than declining volume. The S&P 500 went down(?); what went up? As the numbers suggest, the small caps were up - the Russell 2000 rose 0.3%. Usually, when small caps lead, the S&P 500 will catch up. For that reason, I expect the S&P 500 will be up tomorrow. Perhaps I’ll finally be right about my “correction over” call. Ihope so,  I am making it again! The pullback is over.
 
LONG-TERM INDICATOR: The Long Term NTSM indicator remained HOLD: VOLUME, VIX, PRICE & 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
This may sound familiar: The pullback is over, but the S&P 500 could always retest its low. That’s my story and I’m sticking with it.
 
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 70% stocks, including stock mutual funds and ETFs. I’m usually about 50% invested in stocks, so this is a bullish, over-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, usually by using an S&P 500 ETF as I did back in October 22 and 23.