“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.
“...Preservation of Capital is still #1... Judging from
price action, we are witnessing a turn away from US assets.” – Goldman Sachs,
Tony Pasquariello note, 14 April.
“A recent theory by physicists Ruth Kastner and Andreas
Schlatter proposes that gravity might not be a fundamental force, as
traditionally believed. Instead, they suggest that gravity emerges from
quantum-level electromagnetic interactions between charged particles, such as
atoms and molecules.” – The Physicist Page, Facebook. Wow, we don’t even
understand all of the basic forces in the universe. Can we hope to understand
the stock market?
STOCKS FURTHER TO FALL (Barrons)
“...stocks may have further to fall before a relief rally begins in earnest, according to recent notes from two prominent market watchers, Yardeni and DataTrek. Despite Monday’s lackluster performance, the S&P 500 is still about 6.1% above its closing low of 4983 points set April 8.
There’s a good chance the market will hit that level again before all is said and done, argues Yardeni. “The S&P 500 remains in correction territory with a 16% drop since February 19. It is likely to retest its April 8 low and probably find support there,” the firm wrote Monday. “If so, then the market may be forming a bottom.” Story at...
The Stock Market Isn’t Done Falling. This Key Level Is a Buy Signal.
NEW HOME SALES (Reuters via Yahoo Finance)
“Sales of new U.S. single-family homes increased more than expected in March as buyers rushed to take advantage of a decline in mortgage rates, but a gloomy economic outlook poses a challenge to the housing market recovery.
New home sales jumped 7.4%...” Story at...
https://finance.yahoo.com/news/us-home-sales-jump-march-144550766.html
US GLOBAL MANUFACTURING PMI (FX Street)
“A preliminary reading of S&P Global’s Composite PMI showed US business activity expanded at a slower pace in April, with the index easing to 51.2 from March's 53.5. The figure—just above the 50 threshold that separates growth from contraction—points to a softening in private sector momentum.
https://www.fxstreet.com/news/sp-global-pmis-expected-to-confirm-us-economic-pullback-in-april-202504230800
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 rose about 1.7% to 5376.
-VIX dropped about 7% to 28.45.
-The yield on the 10-year Treasury declined to 4.364% (compared to about this time prior market day).
MY TRADING POSITIONS:
NONE
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
Today, of the 50-Indicators I track, 11 gave Bear-signs and 15 were Bullish. The rest are neutral. (It is normal to have a lot of neutral indicators since many of the indicators are top or bottom indicators that will signal only at extremes.)
TODAY’S COMMENT
The daily, bull-bear spread of 50-indicators improved to Neutral at +4 (4 more Bull indicator than Bear indicators) - the 10-dMA of the spread continued higher – another bullish sign, but it has flipped a few times during this pullback. Overall though, indicators continue to improve.
The above chart is a closer look at trend lines. It’s a
bit confusing because the red, chart-lines represent price-volume. The
important items to look at are the black S&P 500 and the dashed, black
upper and lower trend line. We could
argue about where to draw the lower trendline, but for now, only the upper
trendline is important. In this chart the S&P 500 has not yet climbed to
the upper trend line. By this measure, markets are still in a down-trend. I won’t consider moving back into the markets,
in a meaningful way, until the Index breaks above its upper trendline. The trend-reversal
rules also require that the Index close above the line on consecutive closes or
close 3% above the line.
Oops, I lied. I
will move back in if we can get a successful test of the prior low. That would
be about 6% below today’s close.
The news that the administration admits that the current
China tariffs are unsustainable is good, but it only proves they are not completely
nuts – just mostly. It isn’t really new news either. (Where’s my
editor?) If anything, investors may be concluding that Trump will back down –
that is an obviously bullish thought. It may be very reasonable too, since
Trump doesn’t want to alienate his base (or his legacy) while Xi Jinping could
care less about the Chinese people. Xi probably thinks he can wait out Trump. Maybe
so, but there could still be a lot of damage to the economies of both countries
in the interim.
The S&P 500 is now
overbought based on the overbought/oversold index. That could bring a down-day
tomorrow and may have been a technical reason for the markets to decline in the
afternoon Wednesday.
The “Death Cross” remains on the S&P 500 – the 50-day
moving average has dropped below its 200-dMA. Markets are already in bad shape
so the “Death Cross” may not be important.
BOTTOM LINE
I am neutral, leaning bearish, in a wait-and-see mode. I expect a retest of the prior low.
ETF - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily) ETF ranking follows:
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 remained BUY. (My basket of Market
Internals is a decent trend-following analysis that is most useful when it
diverges from the Index.)
I trade about 15-20% of the total portfolio using the momentum-based analysis I provide here. When I see bullish signs, 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.
“...stocks may have further to fall before a relief rally begins in earnest, according to recent notes from two prominent market watchers, Yardeni and DataTrek. Despite Monday’s lackluster performance, the S&P 500 is still about 6.1% above its closing low of 4983 points set April 8.
There’s a good chance the market will hit that level again before all is said and done, argues Yardeni. “The S&P 500 remains in correction territory with a 16% drop since February 19. It is likely to retest its April 8 low and probably find support there,” the firm wrote Monday. “If so, then the market may be forming a bottom.” Story at...
The Stock Market Isn’t Done Falling. This Key Level Is a Buy Signal.
“Sales of new U.S. single-family homes increased more than expected in March as buyers rushed to take advantage of a decline in mortgage rates, but a gloomy economic outlook poses a challenge to the housing market recovery.
New home sales jumped 7.4%...” Story at...
https://finance.yahoo.com/news/us-home-sales-jump-march-144550766.html
“A preliminary reading of S&P Global’s Composite PMI showed US business activity expanded at a slower pace in April, with the index easing to 51.2 from March's 53.5. The figure—just above the 50 threshold that separates growth from contraction—points to a softening in private sector momentum.
https://www.fxstreet.com/news/sp-global-pmis-expected-to-confirm-us-economic-pullback-in-april-202504230800
-Wednesday the S&P 500 rose about 1.7% to 5376.
-VIX dropped about 7% to 28.45.
-The yield on the 10-year Treasury declined to 4.364% (compared to about this time prior market day).
NONE
Today, of the 50-Indicators I track, 11 gave Bear-signs and 15 were Bullish. The rest are neutral. (It is normal to have a lot of neutral indicators since many of the indicators are top or bottom indicators that will signal only at extremes.)
TODAY’S COMMENT
The daily, bull-bear spread of 50-indicators improved to Neutral at +4 (4 more Bull indicator than Bear indicators) - the 10-dMA of the spread continued higher – another bullish sign, but it has flipped a few times during this pullback. Overall though, indicators continue to improve.
I am neutral, leaning bearish, in a wait-and-see mode. I expect a retest of the prior low.
TODAY’S RANKING OF 15 ETFs (Ranked Daily) ETF ranking follows:
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
I trade about 15-20% of the total portfolio using the momentum-based analysis I provide here. When I see bullish signs, 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.
