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.
 
"For me, it's pretty clear. You have Trump who's locked in on tariffs. You have the Fed who's locked in on not cutting rates. That's not good for the stock market...We'll probably go down to new lows, even when Trump dials back China to 50%." – Paul Tudor Jones, Billionaire Hedge Fund Manager.
 
TARIFF TURMOIL ISN’T OVER (Barrons)
“A month out from President Donald Trump’s decision to ease up on the tariff throttle, something still isn’t quite right in the financial markets. Stock investors should be wary.
Corporate spreads have narrowed, and Treasury yields are less volatile, soothed by positive talk on tariffs. Stocks have recovered from their April 2 “Liberation Day” losses, but the dollar remains under pressure... President Donald Trump announced on Thursday that the U.K. was the first trading partner to agree to a new deal. Although the country has a trade surplus with the U.S., it agreed to a 10% minimum tariff on most exports.
“There’s a clear fragility here, because tariffs aren’t going back to zero,” said Peter Boockvar, chief investment officer at Bleakley Financial Group. The U.K. deal indicates that 10% is the new minimum for tariffs, “which is a much higher tariff rate than we had before April 2...” Mikkelsen [Hans Mikkelsen, head of U.S. credit strategy at TD Securities] said... “It can’t be just 10% tariffs because that is not going to drive a lot of companies to set up in the U.S. I think the markets are probably on average expecting 10%, which is one of the reasons I think this is the calm before the storm.”
The Stock Market Is Getting a Warning from Bonds and the Dollar. Tariff Turmoil Isn’t Over.
 
MARKET REPORT / ANALYSIS
-Friday the S&P 500 slipped about 0.1% to 5660.
-VIX declined about 3% to 21.9.
-The yield on the 10-year Treasury rose to 4.382% (compared to about this time prior market day).
 
MY TRADING POSITIONS:
XLK-added 4/28
SPY-added 4/28
 
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
Today, of the 50-Indicators I track, only 4 gave Bear-signs and 18 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 slipped to +14 (14 more Bull indicators than Bear indicators) a Bullish indication (I consider 5 neutral) - the 10-dMA of the spread continued higher – also a bullish sign. 
 
After an initial bounce, stocks meandered around. Maybe they were waiting for tariff news? What they don’t seem to grasp is that it’s going to be a long wait.
 
Friday, unchanged-volume was again extremely high. As I’ve often said, many believe that this indicator suggests investor confusion at market turning points. Are markets turning back down? There aren’t many indicators that suggest it. RSI is overbought; my Money Trend indicator suggests a reversal, but how much of a reversal remains questionable. It would take more bear indicators to convince me the rally is over.
 
The advance has been narrow – only 50 issues made new, 52-week highs on the NYSE today.  Seems narrow to me, but that’s about the same as it was a month after the 25% bottom in October of 2022.
 
My Breadth indicators look good and the 50-indicator spread is suggesting the rally continues.
 
BOTTOM LINE
I am bullish, though perhaps warily. The markets may trade sideways for a while or drift down some to work off the bullish froth.
 
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 HOLD. (My basket of Market Internals is a decent trend-following analysis that is most useful when it diverges from the Index.) 
 

 

My current invested position is about 50% stocks, including stock mutual funds and ETFs. 50% invested in stocks is a normal, conservative position. (75% is my max stock allocation when I am confident that markets will continue higher; 30% in stocks is my Bear market position.)
                                             
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.