FED Decision / Statement ... ADP Employment ... 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.
“Blind obedience to authority is the greatest enemy of
truth.” - Albert Einstein
FED DECISION / STATEMENT (CNBC)
“The Federal Reserve kept its key interest rate at 5.25%
to 5.5%, citing “some further progress” toward its 2% inflation goal. At his
press conference, Fed Chair Jerome Powell said a rate cut in September is “on
the table,” provided the inflation data continues to be encouraging.” Story
at...
https://www.cnbc.com/2024/07/31/fed-meeting-live-updates-traders-brace-for-central-banks-rate-policy-outlook.html
ADP EMPLOYMENT (ADP via prnewswire)
“Private sector employment increased by 122,000 jobs in
July and annual pay was up 4.8 percent year-over-year... "With wage growth
abating, the labor market is playing along with the Federal Reserve's effort to
slow inflation," said Nela Richardson, chief economist, ADP. "If
inflation goes back up, it won't be because of labor." Press release at...
https://www.prnewswire.com/news-releases/adp-national-employment-report-private-sector-employment-increased-by-122-000-jobs-in-july-annual-pay-was-up-4-8-302211006.html
CRUDE INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those
in the Strategic Petroleum Reserve) decreased by 3.4 million barrels from the
previous week. At 433.0 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 1.5% to 5522.
-VIX declined about 8% to 16.36.
-The yield on the 10-year Treasury declined to 4.032%
(compared to this time, prior trading day).
MY TRADING POSITIONS:
XLK – Holding since the October 2022 lows.
XLK – added more 7/26. This reestablishes the position I
had before this recent weakness.
UWM – added 7/15.
QLD – added 7/24.
DWCPF - Dow Jones U.S. Completion Total Stock Market
(TSM) Index, a broad market index made up of stocks of U.S. companies not
included in the S&P 500 Index. – Added 7/29/2024
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
The Bull/Bear Spread count improved to 13 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 Bull/Bear, 50-Indicator spread (Bull Indicators minus
Bear Indicators) rose from -9 to -4 (4 more Bear indicators than Bull
indicators).
TODAY’S COMMENT:
I have been using the 10-dMA of the 50-indicator spread
(purple line in the chart above) as a buy-signal. When the 10-dMA is moving
higher, it is time to buy. Given the strong moves in price today, I thought I’d
get a definite buy-signal. Not yet.
Breadth did bounce higher today – the 10-dMA of the % of
issues advancing on the NYSE rose above 50% today. That shows that over the last 2 weeks, more
than half of the issues on the NYSE have gone up.
I am feeling better now – my decision to increase stock
holdings recently is looking a bit smarter today.
LONG-TERM INDICATOR: The Long Term NTSM indicator improved
to HOLD: PRICE, VOLUME, SENTIMENT & VIX 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 “Summary of 50”
indicator.
BOTTOM LINE
The FED cooperated and didn’t disappoint the
markets. It looks like the Bull is back!
I’m still waiting to get a buy signal to add more stocks to the portfolio.
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 HOLD. (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 70% stocks, including stock mutual funds and ETFs. I’m
usually about 50% invested in stocks when markets are stretched; my current
stock position is slightly above the norm. (75% is my max stock allocation when
I am strongly bullish.)
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.
