PCE Prices ... Chicago PMI ... 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.
PCE PRICE / CORE PCE (CNBC)
The personal consumption expenditures price index excluding
food and energy costs increased just 0.2% for the period, in line with the Dow
Jones estimate... On an annual basis, core PCE was up 2.8%, or 0.1 percentage
point higher than the estimate. Including the volatile food and energy
category, PCE inflation was at 2.7% on an annual basis...” Story at...
https://www.cnbc.com/2024/05/31/pce-inflation-april-2024-the-feds-preferred-inflation-measure-rose-0point2percent-in-april.html
CHICAGO PMI (Advisor Perspectives)
The latest Chicago Purchasing Manager's Index (Chicago Business
Barometer) fell to 35.4 in May from 37.9 in April. This is the sixth straight
monthly decline and the lowest level for the index since May 2020. The latest
reading is worse than the 41.1 forecast and keeps the index in contraction
territory for a sixth consecutive month.” Commentary at...
https://www.advisorperspectives.com/dshort/updates/2024/05/31/chicago-pmi-drops-to-4-year-low
MARKET REPORT / ANALYSIS
-Friday the S&P 500 rose about 0.8% to 5278.
-VIX fell about 11% to 12.92.
-The yield on the 10-year Treasury fell to 4.495%.
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) was still bearish Friday, but it did improve. Today there were 15
Bear-signs and 9-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:
There were some improvements in indicators...let’s see if
they keep improving.
Friday 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.
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
remains a concern, but less so after the strong up-day on Friday.
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
FRIDAY 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.
