Leading Economic Indicators ... 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 problem isn't that Johnny can't read. The problem isn't even that Johnny can't think. The problem is that Johnny doesn't know what thinking is; he confuses it with feeling.” ― Thomas Sowell, senior fellow at the Hoover Institution.

“Gunshot detection technology, once hailed as a critical tool for combating gun violence, is now under fire. Senator Elizabeth Warren and other lawmakers are demanding the defunding of ShotSpotter, a gunshot-detecting system, labeling it as discriminatory and racially biased.” – No, serously, you can’t make this stuff up. Story at...
“Gun Shot Detecting” Microphones Labeled Racist, Senators Demand Defunding (msn.com)
 
"Because of the Inflation Reduction Act — the infrastructure act — we are dropping trillions of dollars on the streets of America right now to build back up our roads and our bridges, our sidewalks, to invest in a clean energy economy, to deal with the climate crisis in a way that is about building up adaptation and resilience." – VP Kamal Harris.
Hmmm...Kamala, do you think those trillions might be contributing to inflation?
 
LEADING ECONOMIC INDEX (Conference Board)
“The Conference Board Leading Economic Index®  (LEI) for the U.S. decreased by 0.6 percent in April 2024 to 101.8 (2016=100), after decreasing by 0.3 percent in March. Over the six-month period between October 2023 and April 2024, the LEI contracted by 1.9 percent—a smaller decrease than its 3.5 percent decline over the previous six months. ‘Another decline in the U.S. LEI confirms that softer economic conditions lay ahead,’ said Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators, at The Conference Board... While the LEI’s six-month and annual growth rates no longer signal a forthcoming recession, they still point to serious headwinds to growth ahead.’” Press release at...
https://www.conference-board.org/topics/us-leading-indicators
 
MARKET REPORT / ANALYSIS
-Friday the S&P 500 rose about 0.1% to 5303.
-VIX declined about 3% to 11.99.
-The yield on the 10-year Treasury rose to 4.422%.
 
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) remained bullish at 8 Bear-signs and 15-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) continues to improve, a bullish sign.

TODAY’S COMMENT:
Bear signs are:
-All of the ETF’s I track are above their 120-day moving averages.
-There have been a string of Distribution Days without a Follow-thru Day.
-Smoothed up-volume is falling.
-Long-term new-high, new-low data is bearish.
-Slope of 40-day moving average of new-highs is falling.
-The 100-dMA of up-days is weak.
-XLI vs S&P 500.
-XLU vs S&P 500.
 
Some of the Bear-signs are not very convincing.  For example, Utilities (XLU) are usually a flight to safety so if XLU is outperforming the S&P 500, it’s a bear sign. Now, buying in XLU is due to the expectation of falling interest rates so this bear sign is suspect. That also affects the indicator that tracks ETFs related to their 120-day moving averages.
 
Bull signs remain strong.  Breadth indicators are all bullish. Indicators look good to me.
 
LONG-TERM INDICATOR: The Long Term NTSM indicator remained BUY: PRICE & VOLUME are bullish; 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 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
 
FRIDAY MARKET INTERNALS (NYSE DATA)

My basket of Market Internals slipped to HOLD. (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.