Manufacturing PMI ... Construction Spending ... 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.
 
“If Trump returns to the White House, you can kiss these freedoms goodbye that we all take for granted. And elections—forget about it. That’s over; that’s done. If he gets in, I can tell you right now, he will never leave [said Robert De Niro, actor] .... undecided voters could be persuaded that Mr. Trump would do a great deal of harm, if only his opponents could stick to reality.” – Karl Rove,  Republican political consultant, policy advisor, and lobbyist. He was Senior Advisor and Deputy Chief of Staff during the George W. Bush administration. Opinion at...
https://www.wsj.com/articles/robert-de-niro-tries-to-out-crazy-mtg-0fc7f7e6
 
“How can Mr. De Niro not know that hyperbolic and self-righteous commentary is the sole purview of politicians [talk-show hosts] and newspaper opinion writers? Mr. De Niro should stick to acting and leave drama to the pros.” - Bill Shaw, letters, WSJ Opinion.
 
TRUMP CONVICTION
Trump was convicted of a felony in last week’s jury decision for falsifying business records. But that crime is only a misdemeanor unless it was done to conceal another crime. In this case, the other crime was a campaign finance violation because Trump paid a porn star to keep her silence so he could be re-elected. Interestingly, paying hush money is not a crime. The nexus is that Trump’s electability would have been diminished had the news been available. The hush money was therefore, according to prosecutors, a campaign donation and thus a campaign violation. There were also claims that he defrauded the electorate. The whole thing is a stretch to me and that is why Republican never-Trumpers such as Mitt Romney criticized the prosecution.
 
For my part, I am less favorable to Trump.  I find his tampering with the Electoral College to overturn the 2020 election to be so egregious that he doesn’t get my sympathy. His attempts to overturn the 2020 election by putting forth a phony set of electoral college members in key swing states surfaced during the Jan 6th House Hearings.  It has been confirmed (in my mind) due to numerous co-conspirators in Georgia who have turned against Trump and agreed to testify in exchange for immunity from prosecution. The Georgia and Federal court cases court cases remain along with the Classified Documents case.
 
The Georgia “...grand jury accused him [Trump] and more than a dozen of his allies of orchestrating a massive criminal enterprise to overturn the results of the 2020 presidential election in Georgia... Trump attorneys Jenna Ellis, Sidney Powell and Kenneth Chesebro and Atlanta-based bail bondsman Scott Hall have pleaded guilty in the case and were given reduced sentences in exchange for their cooperation with prosecutors... Trump faced 13 charges, including a violation of the state racketeering law, or RICO, solicitation of violation of oath by public officer, conspiracy to commit impersonating a public officer, conspiracy to commit forgery, conspiracy to commit false statements and writings, committing false statements and writings, conspiracy to commit filing false documents and filing false documents.” Story on Trump charges at...
https://www.usnews.com/news/national-news/articles/2023-08-15/explainer-trumps-four-indictments
Trump faces a similar prosecution from the Federal Government, but if he is elected he can order the DOJ to kill the prosecution. In a normal world, he would be impeached if he tampered with DOJ, but the Republicans have lost all credibility with their support of Trump.
 
On a side note: I can never vote for Trump.  The oath when I was commissioned in the military states: “I...do solemnly swear (or affirm) that I will support and defend the Constitution of the United States against all enemies, foreign and domestic...” My oath as a 35-year DOD civilian was similar. Since Trump attempted to overturn a US election, he is an enemy of the Constitution.
 
MANUFACTURING PMI (ISM via PRnewswire)
"The Manufacturing PMI® registered 48.7 percent in May, down 0.5 percentage point from the 49.2 percent recorded in April. The overall economy continued in expansion for the 49th month after one month of contraction in April 2020. (A Manufacturing PMI® above 42.5 percent, over a period of time, generally indicates an expansion of the overall economy.) ..."Demand remains elusive as companies demonstrate an unwillingness to invest due to current monetary policy and other conditions. These investments include supplier order commitments, inventory building and capital expenditures.” Press release at...  
https://www.prnewswire.com/news-releases/manufacturing-pmi-at-48-7-may-2024-manufacturing-ism-report-on-business-302161049.html
 
CONSTRUCTION SPENDING (U.S.News)
“U.S. construction spending fell unexpectedly for a second consecutive month in April on declines in non-residential activity, though outlays for single-family home building climbed to the highest since August 2022.
The Commerce Department's Census Bureau on Monday said construction spending fell 0.1%... Construction spending increased 10% on a year-on-year basis in April.” Story at... 
https://money.usnews.com/investing/news/articles/2024-06-03/us-construction-spending-slips-again-in-april
 
MARKET REPORT / ANALYSIS
-Monday the S&P 500 rose about 0.1% to 5283.
-VIX rose about 1% to 13.11.
-The yield on the 10-year Treasury declined to 4.392%.
 
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 to Neutral Monday. Today there were 13 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 2 days.
 

TODAY’S COMMENT:
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 46.9% 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% 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.
 
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

MONDAY MARKET INTERNALS (NYSE DATA)

My basket of Market Internals improved to 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.