Home Sales ... Payroll Report ... 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 MOREHOUSE SPEECH WAS A FAREWELL (CNN via msn)
“...The shortcomings of the president’s speech highlight the broader set of problems he’s having with Black voters as revealed consistently by the polls...
...the Morehouse crowd, at least, understood that no matter how much Biden talks about his proximity to HBCU graduates and having worked with President Barack Obama and Vice President Kamala Harris, his policies have yet to fully meet their expectations, and while some may argue that a little progress is better than no progress at all, it begs the question for many of how long they should accept minimal change when the needs are far greater. Democrats dismissing Biden’s bad poll numbers showcases the disconnect between wealthy Washington elites whose hubris does not allow them to understand the very real and salient experiences of many working-class Black people who feel disillusioned and often forgotten by a political class that only shows up when it’s time to vote.
Democrats are frankly delusional if they think they can take these voters’ sentiments for granted. There’s a strong chance they will not vote for Biden at the same level they did in 2020...
...The speech was more a farewell from a past ally than an invitation to a new vision for a prosperous future. Biden is in the valley as Black voters led by young men abandon him, even while speaking from a red clay hill.” - Shermichael Singleton, CNN political commentator and Morehouse graduate.  Commentary at...
Opinion: Biden’s Morehouse address was a farewell speech (msn.com)
 
NEW HOME SALES (Reuters)
“Sales of new U.S. single-family homes fell more than expected in April amid a resurgence in mortgage rates and higher prices, further evidence that the housing market was losing momentum in the second quarter. New home sales dropped 4.7%...” Story at...
https://www.reuters.com/markets/us/us-new-home-sales-fall-april-prices-rise-year-ago-2024-05-23/
 
JOBLESS CLAIMS (Yahoo Finance)
“Again the numbers are well-behaved, coming in at 215K last week, below the 220K expected and the slightly upwardly revised 223K from the previous week. This 215K figure is the lightest we’ve seen in a month...”
https://finance.yahoo.com/news/jobless-claims-decreased-more-expected-145300340.html
 
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 declined about 0.7% to 5268.
-VIX rose about 4% to 12.77.
-The yield on the 10-year Treasury rose to 4.479%.
 
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 slide to the bear-side and switched to bearish (but close to neutral) at 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 – a bearish sign.

 TODAY’S COMMENT:
Nvidia didn’t save the markets from a down-day Thursday even though it finished the day up over 9%.
 
Hindenburg Omen
Today there was a Hindenburg Omen. Investopedia says, “The Hindenburg Omen is a technical indicator that was designed to signal the increased probability of a stock market crash. It compares the percentage of new 52-week highs and new 52-week lows in stock prices to a predetermined reference percentage that is supposed to predict the increasing likelihood of a market crash... The Hindenburg Omen looks for a statistical deviation from the premise that under normal conditions, some stocks are either making new 52-week highs or new 52-week lows. It would be abnormal if both were occurring at the same time.” From Investopedia at...
https://www.investopedia.com/terms/h/hindenburgomen.asp
Neither the long-term or short-term Fosback Hi/Low Logic indicators are bearish.  They are both closer to giving bullish indications. Those indicators also look at the number of new-highs and new-lows in a somewhat similar style of analysis as the Hindenburg Omen indicator. It is well known that the Hindenburg is not always right.  The last time we saw an Omen (actually 3 in a row) was in February and the market ignored it.
 
10-dMA of Breadth dropped below 50% signaling that less than half of the issues on the NYSE have been up over the last 10-days.  That’s the first sign of possible real trouble.
 
There are no top-signs today so if there is a correction, it won’t be from overly exuberant market action.
 
As noted yesterday, the S&P 500 is 1.9 % above its 50-dMA.  That usually tracks the lower trend line so a fall to the current 50-dMA of 5170 would be perfectly normal. The S&P 500 just completed a 10% correction on 19 April so it seems unlikely that the markets would experience another significant correction so soon, but it is not impossible.
 
On a more positive note, Thursday was a 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 occur on statistically-significant, down-days, since they tend to be flush out days that shake out weak hands; but not all statistically-significant, down-days are bottoms.
 
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 am 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
 
THURSDAY MARKET INTERNALS (NYSE DATA)

My basket of Market Internals declined to 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 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.