Small Business Optimism ... 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 Women’s National Basketball Association is averaging 1.3 million viewers per game, tripling last season’s average of 462,000 viewers... The league also reported more diverse viewership. The number of people tuning in to games on TV grew 60% year over year among people of color.” Story at...
https://www.cnbc.com/2024/06/10/wnba-reports-record-viewership-highest-game-attendance-years-caitlin-clark.html
My cmt: The Caitlin Clark effect is happening for the Pros, but this article doesn’t make sense in one regard. If viewership tripled, but only increased by 60% for people of color, then viewership is less diverse not more diverse, as the article claimed.
 
SMALL BUSINESS OPTIMISM (NFIB)
“The NFIB Small Business Optimism Index reached the highest reading of the year in May at 90.5, a 0.8-point increase but still the 29th month below the historical average of 98. The Uncertainty Index rose nine points to 85, the highest reading since November 2020. Twenty-two percent of owners reported that inflation was their single most important problem in operating their business, unchanged from April and the top business problem among owners.” Press release at...
https://www.nfib.com/surveys/small-business-economic-trends/
 
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 rose about 0.3% to 5375.
-VIX rose about 1% to 12.85.
-The yield on the 10-year Treasury dipped to 4.410%.
 
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) is neutral (red line in the chart below). Today, there were 13 Bear-signs and 14-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 still moving higher, a bullish sign.

TODAY’S COMMENT:
Wednesday, we get the Fed meeting results and the May CPI report. My guess is that CPI will be OK given the decent PPI results last month. Falling Producer Prices should translate to a good CPI report.  The catch is that whatever the number, it needs to beat Wall Street expectations.
 
Tuesday, the S&P 500 again made a new, all-time high, but there were only 56 new, 52-week highs on the NYSE.  That’s even lower than yesterday and as noted yesterday, it suggests a narrow advance. This indicator has presaged corrections of 10% or greater.  All we can do now is watch other indicators to see if they turn more bearish.
 
The S&P 500 is 11.8% 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.
 
My VIX indicator remained bullish and, as yesterday, there are still 14 bull-signs, so it is not time to panic. It does suggest that it may soon be time to take profits in my remaining leveraged positions and we need to pay attention.
 
LONG-TERM INDICATOR: The Long Term NTSM indicator remained BUY: PRICE & VIX are bullish; VOLUME & 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 and watching indicators closely.
 
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 declined to SELL. (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. 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.