Factory Orders ... 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.
 
FACTORY ORDERS (RTT News)
“The Commerce Department said factory orders climbed by 0.7 percent in April compared to economist estimates for an increase of 0.6 percent.”
https://www.rttnews.com/3452167/u-s-factory-orders-climb-slightly-more-than-expected-in-april.aspx?type=gleco
 
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 rose about 0.2% to 5291.
-VIX rose about 0.4% to 13.16.
-The yield on the 10-year Treasury declined to 4.330%.
 
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) improved again and remained Neutral Tuesday. Today there were 12 Bear-signs and 11-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) continued down, but the rate of decline has been improving. A 10-dMA is going to lag the daily numbers. Daily numbers have improved the last 3 days.
 

TODAY’S COMMENT:
Utilities (XLU-ETF) are outperforming the S&P 500.  That’s usually a sign of “flight-to-safety”. It’s not clear that is happening now. Some are betting on Utilities as an AI play since it will take more electricity to power the servers; others are buying Utilities since interest rates are expected to fall. I’m not sure what is happening, but the spread between Utilities and the S&P 500 is narrowing and that is usually a bullish sign.
 
The rest of today’s comment is nearly a repeat of yesterday:
Daily Indicators improved again. It’s too early to give the all-clear, but so far, the numbers look good.
 
Breadth is still weaker than I’d like.  The 10-dMA of issues advancing on the NYSE is 45.7% indicating less than half of them have been up over the last two weeks. That needs to be above 50% before we can have more conviction that the weakness is over.
 
The S&P 500 is 2.1% above its 50-dMA; that’s a good sign.  We needed to see the Index stay above its 50-dMA as a first sign of market strength.
 
While the recent weakness may be concerning, the S&P 500 is less than 1% from new, all-time highs. Maybe I just worry too much.
 
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 neutral at this point watching the markets, but leaning 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
 
TUESDAY MARKET INTERNALS (NYSE DATA)

My basket of Market Internals remained Neutral. (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.