CPI ... Crude Inventories ... 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 SECRET COURT TAPES (WSJ)
“An activist who thinks America is in danger of becoming
a “Christian theocracy” infiltrated a gala at the Supreme Court, secretly taped
herself trying to goad two conservative Justices into untoward remarks, and all
she got was . . . this? The fact that her story led the news on
Tuesday says more about the media’s obsessions than anything else...
The patter with Ms. Windsor has the weary tone of
humoring chitchat. Anybody who does such events knows the drill. Chief
Justice John Roberts manages to parry and escape. “You don’t think
there’s, like, a role for the Court in, like, guiding us toward a more moral
path?” Ms. Windsor asks. “No,” he says. “I think the role for the court is
deciding the cases. If I start—would you want me to be in charge of guiding us
toward a more moral path? That’s for the people we elect.” Opinion at...
https://www.wsj.com/articles/samuel-alito-martha-ann-alito-lauren-windsor-supreme-court-historical-society-tapes-19771448?mod=opinion_lead_pos1
CPI (CNBC)
“The consumer
price index showed no increase in May as inflation slightly loosened
its stubborn grip on the U.S. economy, the Labor Department reported Wednesday.
The CPI, a broad inflation gauge that
measures a basket of goods and services costs across the U.S. economy, held
flat on the month though it increased 3.3% from a year ago, according to the
department’s Bureau of Labor Statistics” Story at...
https://www.cnbc.com/2024/06/12/cpi-report-june-inflation.html
CRUDE INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those
in the Strategic Petroleum Reserve) increased by 3.7 million barrels from the
previous week. At 459.7 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
-Wednesday the S&P 500 rose about 0.9% to 5421.
-VIX fell about 6% to 12.04.
-The yield on the 10-year Treasury declined to 4.318%.
MY TRADING POSITIONS:
UWM – Added 5/2/2024
QLD – Added 4/29/2024
XLK – Holding since the October 2022 lows.
SSO – Sold 6/11/2024.
XLE – Sold 6/11/2024
CRM – Sold 6/11/2024.
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) moved sharply to the Bull side (red line in the chart below).
Today, there were 7 Bear-signs and 18-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) is moving higher, a bullish sign.
TODAY’S COMMENT:
The CPI news was good and markets celebrated.
Wednesday brought another new, all-time high for the
S&P 500. This time more than twice as many issues on the NYSE made new
52-week highs, compared to yesterday. That cancels one major worrisome indicator
that we have been watching. In addition, Breadth made significant
improvements. The moving averages at 10,
50 and 100 days for issues advancing on the NYSE are all above 50%. One day cured several breadth indicators and creates
a lot more optimism for the markets. The two remaining negative breadth
indicators are my MACD of Breadth and the McClellan Oscillator.
The Spread between Utilities (XLU) and the S&P 500 is
narrowing, indicated by the upward moving red line in the chart below. I see
that as a bullish indicator. Utilities have been outpacing the S&P 500 for
a while.
Not everything looks great though. Here are a few
important Bear signs:
The S&P 500 is 12.7% above its 200-dMA. (The Bear
indicator is 12% above the 200-day.) The markets can get much higher than 12%
above the 200-day, but usually the 12% level can be a limiter for the S&P
500.
Wednesday was a statistically significant up-day. That
just means that the price-volume move exceeded my statistical parameters.
Statistics show that a statistically-significant, up-day is followed by a
down-day about 60% of the time.
Bollinger Bands are overbought today, but RSI is
not. Without both agreeing, I ignore
these indicators.
All-in-all, the preponderance of indicators is now well bullish,
but markets are stretched as indicated by the above bear signs. I’m still
heavily invested in stocks, but I have some cash now from sales of losers (CRM
& XLE) and strong gains in the 2x S&P 500 ETF (SSO). I’ll decide whether to reset the
SSO trade in a few days. I’m not in a
rush.
LONG-TERM INDICATOR: The Long Term NTSM indicator
remained BUY: PRICE, VOLUME & VIX are bullish; SENTIMENT is 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, but somewhat cautiously so, since markets
are stretched.
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 improved to 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 65% stocks, including stock mutual funds and ETFs. I’m
usually about 50% invested in stocks, so this is a bullish, over-invested
position. 75% is my max stock allocation so I have some cash now.
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.
