Markets closed early (1pm) today so traders could get to the Hamptons for the Fourth of July Holiday. Markets are closed Thursday for the Fourth, so no blog tomorrow. HAVE A GREAT HOLIDAY!
[in response]...“Donald - This is the type of thing that demonstrates yet again that you are not a stable adult—and are not fit for office.” – Liz Cheney, former Representative and Co-chair of the Jan 6th Committee.
“In abandoning the doctrine called Chevron deference, the justices have given parties unhappy with agency decisions—typically businesses and property owners—more opportunities to overturn regulations by persuading federal judges that officials exceeded their authority. “Agencies have no special competence in resolving statutory ambiguities. Courts do,” Chief Justice John Roberts wrote for the court, joined by Justices Clarence Thomas, Samuel Alito, Neil Gorsuch, Brett Kavanaugh and Amy Coney Barrett...
...Justice Elena Kagan, in
dissent, argued that the majority had damaged the public interest by
diminishing the role of expert agencies and reduced the democratic accountability
of policy decisions by shifting authority from executive branch officials
working for the president to the unelected judiciary.” Story at...
https://www.wsj.com/us-news/law/supreme-court-pares-back-federal-regulatory-power-954a101c
My cmt: Justice Kagan has it backwards. It’s bureaucrats who make the regulations who are unelected.
“The Supreme Court’s previous deference rule allowed each
new presidential administration to advance their political agendas through
flip-flopping regulations and not provide consistent rules of the road for
businesses to navigate, plan and invest in the future.” - Suzanne Clark, president
of the U.S. Chamber of Commerce.
FED MINUTES (CNBC)
“Federal Reserve officials at their June meeting indicated that inflation is moving in the right direction but not quickly enough for them to lower interest rates, minutes released Wednesday showed.” Story at...
https://www.cnbc.com/2024/07/03/fed-minutes-fomc-not-ready-to-cut-rates-until-greater-confidence-inflation-is-moving-to-2percent-goal.html
ADP EMPLOYMENT (ADP via prnewswire)
https://www.wsj.com/us-news/law/supreme-court-pares-back-federal-regulatory-power-954a101c
My cmt: Justice Kagan has it backwards. It’s bureaucrats who make the regulations who are unelected.
“Federal Reserve officials at their June meeting indicated that inflation is moving in the right direction but not quickly enough for them to lower interest rates, minutes released Wednesday showed.” Story at...
https://www.cnbc.com/2024/07/03/fed-minutes-fomc-not-ready-to-cut-rates-until-greater-confidence-inflation-is-moving-to-2percent-goal.html
“Private sector employment increased by 150,000 jobs in
June and annual pay was up 4.9 percent year-over-year, according to the
June ADP® National
Employment Report™... "Job growth has been solid, but not broad-based,"
said Nela Richardson, chief economist, ADP. "Had it not been for
a rebound in hiring in leisure and hospitality, June would have been a downbeat
month.’" Press release at...
“Private sector employment increased by 150,000 jobs in
June and annual pay was up 4.9 percent year-over-year, according to the
June ADP® National
Employment Report™... "Job growth has been solid, but not
broad-based," said Nela Richardson, chief economist, ADP. "Had it not been for
a rebound in hiring in leisure and hospitality, June would have been a downbeat
month.’" Press release at...
https://www.prnewswire.com/news-releases/adp-national-employment-report-private-sector-employment-increased-by-150-000-jobs-in-june-annual-pay-was-up-4-9-302188876.html
JOBLESS CLAIMS (ABC News)
“The Labor Department reported Wednesday that jobless claims for the week ending June 29 rose by 4,000 to 238,000 from 234,000 the previous week. The data was issued one day earlier than its regular Thursday release due to the July Fourth holiday... Economists say that while the number of new people applying for jobless aid each week remains relatively modest...” Story at...
https://abcnews.go.com/Business/wireStory/us-filings-jobless-claims-inch-modestly-continuing-claims-111639557
ISM NON-MANAUFACTURING (ISM via prnewswire)
"In June, the Services PMI® registered 48.8 percent, 5 percentage points lower than May's figure of 53.8 percent. The reading in June was a reversal compared to May and the second in contraction territory in the last three months... "The decrease in the composite index in June is a result of notably lower business activity, a contraction in new orders for the second time since May 2020 and continued contraction in employment. Survey respondents report that in general, business is flat or lower, and although inflation is easing, some commodities have significantly higher costs. Panelists indicate that slower supplier delivery performance is due primarily to transportation challenges, not increases in demand." - Steve Miller, CPSM, CSCP, Chair of the Institute for Supply Management® (ISM®) Services Business Survey Committee. Press release at...
https://www.prnewswire.com/news-releases/services-pmi-at-48-8-june-2024-services-ism-report-on-business-302188467.html
DURABLE GOODS / FACTORY ORDERS (Advisor Prespectives)
“New orders for manufactured durable goods rose to $283.08B in May. This is a 0.1% increase from the previous month and more than the expected -0.5% decline. The series is down 1.5% year-over-year (YoY)...” Story at...
https://www.advisorperspectives.com/dshort/updates/2024/06/27/durable-goods-orders-may-2024
CRUDE INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 12.2 million barrels from the previous week. At 448.5 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
The report suggests strong demand.
FYI.
Chart from...
https://www.eia.gov/
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 rose about 0.5% to 5537, a new, all-time high.
-VIX rose about 0.5% to 12.09.
-The yield on the 10-year Treasury declined to 4.354% (compared to this time yesterday).
MY TRADING POSITIONS:
XLK – Holding since the October 2022 lows.
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
The Bull/Bear Spread (Bull Indicators minus Bear Indicators) was 8 Bear-signs and 15-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 turned up, a bullish sign, although it has bounced back and forth so much that it is hard to get too confident.
We’re still waiting to see if the Index can break above
the red trend line in the chart below.
TODAY’S COMMENT:
I sold my DWCPF - Dow Jones U.S. Completion Total Stock Market Index position (includes small caps) and replaced half of it with an S&P 500 fund (SPY). That focuses my portfolio on larger stocks while reducing overall exposure to stocks back to my base, balanced, retiree position of 50% invested. To be clear, I am still fully invested and I do not yet have a sell-signal. This just insures that I am reasonably invested now, when indicators are starting to warn of a pullback. Will we have a turn-down? Yes, but it is not clear that it will occur soon. But since I have had some warning signs, I am reducing risk. As a retiree, the key is to minimize losses. I have no way to make up losses since I no longer have a working income. Younger folks can be much more agressive.
I’ll wait for a better position to re-deploy by cash.
In the meantime, there were some improvements in
indicators today.
The S&P 500 made a new, all-time high today while the
number of issues making new, 52-week-highs on the NYSE improved and crept above
my bearish threshold. Before we get too,
caried away, it is important to note that of the eight new, S&P 500 highs
over the last 3-weeks, new-52-week-highs have been very low on five of them.
While this signal has improved, others have not.
The S&P 500 is 13.4% above the 200-dMA and that
remains stretched. The bear sign is greater than 12%.
Statistical analysis of daily moves is indicating that
the daily moves have gotten too predictably small, a sign of complacency. This
suggests a top within the next 20-days. The last time we saw this indicator was
at the 31 July top last year. That was followed by a 10% correction, but
overall indicators still look ok.
Breadth measured on differed time-frames remains Bullish.
The Bull/Bear, 50-Indicator spread remained +7 (7 more Bull indicators than
Bear indicators).
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
No change: I am Neutral on the market, however, I have sold stocks to reach a balanced position of 50% invested in stocks.
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 slipped 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 50% stocks, including stock mutual funds and ETFs. I’m
usually about 50% invested in stocks, so this is normal invested position. (75%
is my max stock allocation so I have some cash now.)
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.
https://www.prnewswire.com/news-releases/adp-national-employment-report-private-sector-employment-increased-by-150-000-jobs-in-june-annual-pay-was-up-4-9-302188876.html
“The Labor Department reported Wednesday that jobless claims for the week ending June 29 rose by 4,000 to 238,000 from 234,000 the previous week. The data was issued one day earlier than its regular Thursday release due to the July Fourth holiday... Economists say that while the number of new people applying for jobless aid each week remains relatively modest...” Story at...
https://abcnews.go.com/Business/wireStory/us-filings-jobless-claims-inch-modestly-continuing-claims-111639557
"In June, the Services PMI® registered 48.8 percent, 5 percentage points lower than May's figure of 53.8 percent. The reading in June was a reversal compared to May and the second in contraction territory in the last three months... "The decrease in the composite index in June is a result of notably lower business activity, a contraction in new orders for the second time since May 2020 and continued contraction in employment. Survey respondents report that in general, business is flat or lower, and although inflation is easing, some commodities have significantly higher costs. Panelists indicate that slower supplier delivery performance is due primarily to transportation challenges, not increases in demand." - Steve Miller, CPSM, CSCP, Chair of the Institute for Supply Management® (ISM®) Services Business Survey Committee. Press release at...
https://www.prnewswire.com/news-releases/services-pmi-at-48-8-june-2024-services-ism-report-on-business-302188467.html
“New orders for manufactured durable goods rose to $283.08B in May. This is a 0.1% increase from the previous month and more than the expected -0.5% decline. The series is down 1.5% year-over-year (YoY)...” Story at...
https://www.advisorperspectives.com/dshort/updates/2024/06/27/durable-goods-orders-may-2024
“U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 12.2 million barrels from the previous week. At 448.5 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
The report suggests strong demand.
https://www.eia.gov/
-Wednesday the S&P 500 rose about 0.5% to 5537, a new, all-time high.
-VIX rose about 0.5% to 12.09.
-The yield on the 10-year Treasury declined to 4.354% (compared to this time yesterday).
XLK – Holding since the October 2022 lows.
The Bull/Bear Spread (Bull Indicators minus Bear Indicators) was 8 Bear-signs and 15-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 turned up, a bullish sign, although it has bounced back and forth so much that it is hard to get too confident.
TODAY’S COMMENT:
I sold my DWCPF - Dow Jones U.S. Completion Total Stock Market Index position (includes small caps) and replaced half of it with an S&P 500 fund (SPY). That focuses my portfolio on larger stocks while reducing overall exposure to stocks back to my base, balanced, retiree position of 50% invested. To be clear, I am still fully invested and I do not yet have a sell-signal. This just insures that I am reasonably invested now, when indicators are starting to warn of a pullback. Will we have a turn-down? Yes, but it is not clear that it will occur soon. But since I have had some warning signs, I am reducing risk. As a retiree, the key is to minimize losses. I have no way to make up losses since I no longer have a working income. Younger folks can be much more agressive.
(The Long-Term Indicator is not a good top-indicator. It can signal BUY at a top.)
No change: I am Neutral on the market, however, I have sold stocks to reach a balanced position of 50% invested in stocks.
TODAY’S RANKING OF 15 ETFs (Ranked Daily) ETF ranking follows:
*For additional background on the ETF ranking system see NTSM Page at…
http://navigatethestockmarket.blogspot.com/p/exchange-traded-funds-etf-ranking.html
For more details, see NTSM Page at…
https://navigatethestockmarket.blogspot.com/p/a-system-for-trading-dow-30-stocks-my_8.html
