Trump Convicted ... Jobless Claims ... GDP ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

 
Friday and the weekend will be a bear so I may not have a post for Friday...we’ll see. For the time being, I’m planning to post Friday’s Blog Sunday evening.
 
“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 cartoon refers to the phony electors Trump put forward in 2020. Trump’s next trials are the critical ones. Based on what we learned during the House January 7 hearings, Trump is guilty of conspiracy to overturn his loss in the 2020 election.
 
TRUMP CONVICTED (CNN)
“A Manhattan jury found Donald Trump guilty of 34 charges of falsifying business records Thursday, an unprecedented and historic verdict that makes Trump the first former president in American history to be convicted of a felony.” Story at...
https://www.cnn.com/2024/05/30/politics/donald-trump-hush-money-trial-verdict/index.html
My cmt: One of my acquaintances claimed that Trump could be convicted with less than a unanimous decision, because he gets his news from suspect sources. That was not true. The decision was unanimous on all accounts.
 
“Merchan told the jury in his instructions on Wednesday that their verdict “must be unanimous” on each of the 34 counts that Trump faces and that, to convict Trump of felony falsification of business records, they would have to unanimously agree that he falsified business records with the intent to commit, aid or conceal another crime – that other crime being a violation of a New York election law.” From...
https://www.cnn.com/politics/live-news/trump-hush-money-trial-05-30-24/h_14037bf137beb71163ae91cf4a151dd6
My cmt: Jail time is not expected by most experts.
 
TRUMP’S REACTION
Predictably, Trump claimed it was a “rigged trial.” “Corrupt Disgraceful.”
What struck me was his statement, “We will fight for our Constitution.” WTF??? Trump tried to overturn the 2020 election by putting forth a phony set of electors. In the history of our country, no one has done more to void the Constitution than Donald Trump. (Biden’s student loan forgiveness is not a Presidential power under the Constitution, however, that pales in comparison to attempting to overturn an election.)
 
JOBLESS CLAIMS (AP News)
“The number of Americans applying for unemployment benefits ticked up last week, but layoffs remain historically low in the face of lingering inflation and high interest rates. Jobless claims for the week ending May 25 rose by 3,000 to 219,000...” Story at...
https://apnews.com/article/unemployment-benefits-jobless-claims-layoffs-laborb1cc3ffde0194a96e5859def09d75040
 
GDP (Yahoo News)
“The Bureau of Economic Analysis's second estimate of first quarter US gross domestic product (GDP) showed the economy grew at an annualized pace of 1.3% during the period, down from a first reading in April of 1.6% growth and in line with economist estimates.” Story at...
https://finance.yahoo.com/news/gdp-us-economy-grew-at-a-slower-pace-than-initially-thought-in-q1-131220924.html
 
CRUDE INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 4.2 million barrels from the previous week. At 454.7 million barrels, U.S. crude oil inventories are about 4% below the five year average for this time of year.” Report at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf
 
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 declined about 0.6% to 5235.
-VIX rose about 1% to 14.47.
-The yield on the 10-year Treasury fell to 4.55%.
 
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) is now bearish. Today there were 16 Bear-signs and 8-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:
The Trump news came out after the market close. S&P 500 Futures are down slightly (-0.14%) as I write this blog post at 7 pm, so it is not clear that the Trump verdict will affect the markets. PCE inflation is a bigger deal at this point.
 
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. Breadth improved today, so it is possible that today was a bottom.  The Trump news may be the wild-card that “Trumps” the technical.
 
The S&P 500 is 1.1% above 50-dMA; I don’t expect the Index to fall lower than the 50-day, if it does continue its decline. That is normally the lower trend line so I am not making moves in the portfolio yet. So far, weakness is perfectly normal.
 
I did not sell leveraged positions today; breadth improved and the Russell 200 was up 1%.
 
Considering the charts and indicators, I don’t see enough bear-signs to make significant changes to the portfolio at this time, although I will be watching closely over the next several days. A break below the 50-dMA would be a concern.
 
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 neutral at this point watching the markets.
 
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 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.