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Thursday, June 20, 2024

Jobless Claims ... Philly Fed ... Housing ... Crude Inventories ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

“...CBO projects that this year’s budget deficit will clock in at roughly $2 trillion, some $400 billion more than it forecast in February and $300 billion larger than last year’s deficit. This is unprecedented when the economy is growing and defense spending is nearly flat. The deficit this fiscal year will be 7% of GDP, which is more than during some recessions.” Opinion at...
https://www.wsj.com/articles/u-s-debt-spending-congressional-budget-office-taxes-entitlements-biden-6b6f3ece?mod=opinion_lead_pos1

FED IS ‘PLAYING WITH FIRE’ (CNBC)
“The Federal Reserve is risking tipping the economy into contraction by not cutting interest rates now, according to the author of a time-tested rule for when recessions happen... ‘My baseline is not recession,’ Sahm [chief economist at New Century Advisors] said. ‘But it’s a real risk, and I do not understand why the Fed is pushing that risk. I’m not sure what they’re waiting for.’” Story at...
https://www.cnbc.com/2024/06/18/economist-sahm-who-devised-recession-rule-says-the-fed-is-playing-with-fire-.html
My cmt: Market technicals are looking bad and investors are worried about the Fed. The double whammy might lead to a pullback. Time will tell.

JOBLESS CLAIMS (ABC News)
“The Labor Department reported Thursday that jobless claims fell by 5,000 to 238,000 from a 10-month high of 243,000 the week before. The four-week average of claims, which evens out weekly ups and downs, rose by 5,500 to 232,750, highest since September.” Story at...
https://abcnews.go.com/Business/wireStory/us-jobless-claims-fall-238000-10-month-high-111272953

PHILLY FED BUSINESS INDEX (Advisor Perspectives)
“The latest Philadelphia Fed manufacturing index remained in positive territory for a fifth straight month as manufacturing activity remained steady overall. In June, the index fell to 1.3 from 4.5 in May, coming in below the forecast of 4.8.” Analysis at...
https://www.advisorperspectives.com/dshort/updates/2024/06/20/philadelphia-fed-manufacturing-index-steady-activity-june-2024?topic=covid-19-coronavirus-coverage
My cmt: Manufacturing is growing, but slightly slower than last month.

BUILDING PERMITS (Advisor Perspectives)
“In May, building permits fell to their lowest level since June 2020... This marks a 3.8% decrease from April and a 9.5% decline compared to one year ago.” Analysis at...
https://www.advisorperspectives.com/dshort/updates/2024/06/20/building-permits-fall-to-nearly-4-year-low

CRUDE INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 2.5 million barrels from the previous week. At 457.1 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
-Thursday the S&P 500 declined about 0.2% to 5477.
-VIX rose about 7% to 13.13.
-The yield on the 10-year Treasury declined to 4.261%.

MY TRADING POSITIONS:
UWM – Added 5/2/2024
QLD – Added 4/29/2024
XLK – Holding since the October 2022 lows.

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) declined to 13 Bear-signs and 12-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) continues moving higher, a bullish sign.

TODAY’S COMMENT:
I didn’t mention it Tuesday, but there was extremely high, unchanged-volume on Tuesday. As I’ve often said, many believe that this indicator suggests investor confusion at market turning points. The trend has been up so I would interpret this signal as predicting a turn down. Still, “High-unchanged-volume” is not one of my indicators because it is often wrong.

Thursday, there was a Bearish outside reversal day. There was another one just 8 sessions ago.
-According to Investopedia: “This demonstrates that the bulls had control over the market before the bears took the reins in a meaningful way, signaling a shift in the overall trend... For instance, a stock may have a small move higher on the first day, climb even higher the second day, but then sharply decline by the second day’s end... This formation is considered a strong indicator that the prior upward momentum is waning and a reversal is on the horizon.”
https://www.investopedia.com/terms/o/outsidereversal.asp#:~:text=A%20bearish%20outside%20reversal%2C%20also,by%20the%20second%20day's%20end

Thursday there was another Hindenburg Omen. That’s 3 in a row.
Investopedia says, “The Hindenburg Omen is a technical indicator that was designed to signal the increased probability of a stock market crash. It compares the percentage of new 52-week highs and new 52-week lows in stock prices to a predetermined reference percentage that is supposed to predict the increasing likelihood of a market crash... The Hindenburg Omen looks for a statistical deviation from the premise that under normal conditions, some stocks are either making new 52-week highs or new 52-week lows. It would be abnormal if both were occurring at the same time.” From Investopedia at...
https://www.investopedia.com/terms/h/hindenburgomen.asp

The Short-term Fosberg Hi/Low Logic Index is also close to bearish. This indicator also looks at the number of new-highs and new-lows in a somewhat similar style of analysis as the Hindenburg Omen indicator. It is well known that the Hindenburg is not always right, but there were Hindenburg and short-term Fosback Hi/Low Logic warnings around the top in November of 2021 before the 25% decline. Hindenburg warnings are more likely to be correct when there are a number of Omens clumped together, as they have been recently.

The 10-dMA of issues advancing on the NYSE is still below 50%, indicating that for the periods 2-weeks, less than half of all issues on the NYSE have up. These stats just reinforce the narrow advance.

The Bull/Bear, 50-Indicator spread is -1 (1 more Bear indicator than Bull indicators). This is a Neutral indication, but the S&P 500 is 13.2% above the 200-dMA. The bear sign is greater than 12%.

A correction could start now (one could start any time for that matter); but my guess, based on the indicator spread, is that a correction is not here yet. A top may be indicated by a big up-day.

LONG-TERM INDICATOR: The Long Term NTSM indicator slipped to HOLD: PRICE is bullish; VOLUME, VIX & SENTIMENT is 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. Markets are stretched and breadth is looking weak. A 10% retreat is possible, although we don’t have a sell signal at this point.

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

THURSDAY MARKET INTERNALS (NYSE DATA)

My basket of Market Internals remained 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 65% stocks, including stock mutual funds and ETFs. I’m usually about 50% invested in stocks, so this is a bullish, over-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.

Tuesday, June 18, 2024

Retail Sales ... Industrial Production ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

JUNETEENTH
“Even though the Emancipation Proclamation was made effective in 1863, it could not be implemented in places still under Confederate control. As a result, in the westernmost Confederate state of Texas, enslaved people would not be free until much later. Freedom finally came on June 19, 1865, when some 2,000 Union troops arrived in Galveston Bay, Texas. The army announced that the more than 250,000 enslaved black people in the state, were free by executive decree. This day came to be known as "Juneteenth," by the newly freed people in Texas.” From...
https://www.google.com/search?q=NYSE+close+for+Juneteenth%3F&sca_esv=e10f498d10acc07c&sca_upv=1&source=hp&ei=6PRxZrnZCs-kiLMPvtGQ0A4&iflsig=AL9hbdgAAAAAZnIC-HmHaEqx9na5rOsanRc0QcSVBdB-&ved=0ahUKEwi57e65heaGAxVPEmIAHb4oBOoQ4dUDCBc&uact=5&oq=NYSE+close+for+Juneteenth%3F&gs_lp=Egdnd3Mtd2l6IhpOWVNFIGNsb3NlIGZvciBKdW5ldGVlbnRoPzIGEAAYFhgeMgsQABiABBiGAxiKBTILEAAYgAQYhgMYigVI-EZQAFjGQnAAeACQAQCYAW6gAdEOqgEEMjUuMbgBA8gBAPgBAZgCGqACwQ_CAgsQABiABBixAxiDAcICCxAuGIAEGLEDGIMBwgIREC4YgAQYsQMY0QMYgwEYxwHCAg4QABiABBixAxiDARiKBcICEBAAGIAEGLEDGIMBGIoFGArCAggQABiABBixA8ICDhAuGIAEGLEDGMcBGK8BwgIFEAAYgATCAgQQABgDwgIHEAAYgAQYDcICCBAAGAgYDRgewgIIEAAYgAQYogTCAggQABgWGB4YD5gDAJIHBDI1LjGgB6WTAQ&sclient=gws-wiz

Markets will be closed Wednesday, 19 June, so no Blog Post tomorrow.

“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 ICC [INTERNATIONAL CRIMINAL COURT OF THE HAGUE] BETRAYS THE LEGACY OF NUREMBURG (WSJ excerpt)
“After World War II, jurists understood that law must serve morality. Today that premise is inverted... [Judges in the Nuremburg Trials wrote] ‘A city is bombed for tactical purposes. . . It inevitably happens that nonmilitary persons are killed . . . an unavoidable corollary of battle action . . . that is entirely different, both in fact and in law, from an armed force . . . dragging out the men, women and children and shooting them...’

... The threat to moral civilization is grave: Unaccountable terrorists—the new death squads—can massacre and kidnap babies, women and the elderly and hide behind innocents, and accountable governments are powerless to defend against such tactics without taking steps that inflict unwanted casualties. Legal strategies that erase the distinction between the two sides invert Nuremberg’s accomplishment. They sublimate morality to a superficial legality. It isn’t just the legacy of Nuremberg that is at stake; it is the defense of civilization.
https://www.wsj.com/articles/the-icc-betrays-the-legacy-of-nuremberg-c44d850f?mod=opinion_feat2_commentary_pos3

RETAIL SALES (Fox Business)
“Retail sales, a measure of how much consumers spent on a number of everyday goods including cars, food and gasoline, rose just 0.1% in May, the Commerce Department said Tuesday. That is notably lower than the 0.3% increase forecast by LSEG economists...” Story at...
https://www.foxbusiness.com/economy/retail-sales-barely-rise-may-consumers-pump-brakes-spending

INDUSTRIAL PRODUCTION (Yahoo Finance)
“Manufacturing output jumped 0.9% last month following a downwardly revised 0.4% drop in April, the Federal Reserve said on Tuesday.” Story at...
https://finance.yahoo.com/news/us-manufacturing-production-surges-may-135409972.html

MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 rose about 0.3% to 5487.
-VIX declined about 4% to 12.30.
-The yield on the 10-year Treasury declined to 4.219%.

MY TRADING POSITIONS:
UWM – Added 5/2/2024
QLD – Added 4/29/2024
XLK – Holding since the October 2022 lows.

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) improved slightly to 12 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) continues moving higher, a bullish sign.

TODAY’S COMMENT:
Market Internals improved today. We still need to see breadth improve to clear the Hindenburg Omen warning and other bearish breadth related indicators.

Relative Strength Indicator (RSI) turned overbought today.
Relative Strength measures the size of up-moves vs. all-moves on a 14-day moving average basis and presents the result as a percentile. For example; if the RSI is 85, it means that the size of up-moves are in the 85th percentile when compared to all moves over the 14-day period. If ALL moves had been up, RSI would be 100 – a definite short term sell indicator. For my purposes, 30 is oversold (suggesting a turn-around to the upside) and 80 is overbought. If the up-moves and down-moves are equal in size over the 14-day period, RSI would be 50.

I use RSI with Bollinger Bands. Bollinger Bands have been overbought recently and Bollinger Bands are close to overbought now. If Bollinger Bands and RSI are both overbought that would give us a top warning (when combined with other already bearish top-indicators) and I’d have to make a decision regarding reducing stock investments.

Tuesday, there were only 94 new, 52-week-highs on the NYSE on a day when the S&P 500 made a new, all-time high. That suggests a narrow advance. This indicator has presaged corrections of 10% or greater. Breadth remains a worry.

The 10-dMA of issues advancing on the NYSE is still below 50%, indicating that for the periods 2-weeks, less than half of all issues on the NYSE have up. These stats just reinforce the narrow advance.

As noted yesterday, we don’t yet expect a big decline to start now. The Bull/Bear indicator spread is +2 (2 more Bull indicators than bear indicators). This is a Neutral to slightly bullish indication, but the S&P 500 is 13.6% above the 200-dMA. The bear sign is greater than 12% so this can be a drag on markets.

A correction could start now (one could start any time for that matter); but my guess, based on indicators, is that a correction is not here yet.

LONG-TERM INDICATOR: The Long Term NTSM indicator remained BUY: PRICE, VOLUME & VIX are bullish; SENTIMENT is 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
Same as yesterday: I am neutral. Markets are stretched and breadth is looking weak. A 10% retreat is possible, although we don’t have a sell signal at this point.

ETF - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily) ETF ranking follows:

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.)

Monday, June 17, 2024

Empire State Manufacturing ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

TODAY’S COMMENT:
Monday there was another Hindenburg Omen. That’s the second in the last three sessions and the third in the last three weeks.

Investopedia says, “The Hindenburg Omen is a technical indicator that was designed to signal the increased probability of a stock market crash. It compares the percentage of new 52-week highs and new 52-week lows in stock prices to a predetermined reference percentage that is supposed to predict the increasing likelihood of a market crash... The Hindenburg Omen looks for a statistical deviation from the premise that under normal conditions, some stocks are either making new 52-week highs or new 52-week lows. It would be abnormal if both were occurring at the same time.” From Investopedia at...
https://www.investopedia.com/terms/h/hindenburgomen.asp

This time, the short-term Fosback Hi/Low Logic indicators is close to bearish. This indicator also looks at the number of new-highs and new-lows in a somewhat similar style of analysis as the Hindenburg Omen indicator. It is well known that the Hindenburg is not always right, but there were Hindenburg and short-term Fosback Hi/Low Logic warnings around the top in November of 2021 before the 25% decline. There are worrying signs in new-high/new-low data, too.

There were only 74 new-highs Monday on a day when the S&P 500 made a new all-time high. That suggests a narrow advance. This indicator has presaged corrections of 10% or greater. Breadth is also a worry.

The 10-dMA of issues advancing on the NYSE is still below 50%, indicating that for the periods 2-weeks, less than half of all issues on the NYSE have up. These stats just reinforce the narrow advance.

We don’t yet expect a big decline to start now. The Bull/Bear indicator spread is +1 (1 more Bull indicators than bear indicators). This is a Neutral indication, but the S&P 500 is 13.4% above the 200-dMA. The bear sign is greater than 12% so this can be a drag on markets.

A correction could start now (one could start any time for that matter); but my guess, based on indicators, is that a correction is not here yet.

LONG-TERM INDICATOR: The Long Term NTSM indicator remained BUY: PRICE, VOLUME & VIX are bullish; SENTIMENT is 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. Markets are stretched and breadth is looking weak. A 10% retreat is possible, although we don’t have a sell signal at this point.

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)

MONDAY MARKET INTERNALS (NYSE DATA)

My basket of Market Internals remained 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.)

Friday, June 14, 2024

Michigan Sentiment ... 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.

CLIMATE CRISIS FADING (WSJ)
“...U.S. and European governments are trying to induce an energy transition by building or expanding organizations and programs favoring particular “clean” technologies, including wind and solar generation, carbon capture, hydrogen production and vehicle electrification. Promoting technological innovation is a worthy endeavor, but such efforts face serious challenges as costs and disruptions grow without tangible progress in reducing local, let alone global, emissions. Retreats from aggressive goals are already under way in Europe, with clear signs of mandate fatigue. The climbdown will be slower in the U.S., where subsidies create constituencies that make it more difficult to reverse course.
We should welcome, not bemoan, the energy transition’s passage through the issue-attention cycle. It means that today’s ineffective, inefficient, and ill-considered climate-mitigation strategies will be abandoned, making room for a more thoughtful and informed approach to responsibly providing for the world’s energy needs.” – Steven E. Koonin,senior fellow at Stanford’s Hoover Institution and author of “Unsettled: What Climate Science Tells Us, What It Doesn’t, and Why It Matters.” Full opinion at...
https://www.wsj.com/articles/the-climate-crisis-fades-out-5944bd44?mod=opinion_trendingnow_article_pos3

“BREAKING: Gaza’s Health Ministry says 274 Palestinians were killed during the Israeli operation,” reports the Associated Press, only 48 hours after it had exposed how the Hamas ministry’s daily death tolls are “at odds with underlying data.” When will the media stop taking the kidnappers at their word?...
... Hamas started the war with a massacre, took these hostages and hid them in a crowded civilian area. Then, when Israel came to free them, Hamas responded with heavy fire, including RPGs—yet people are condemning Israel. It makes us wonder if the West has lost the moral discernment and instinct for self-preservation needed to defend itself in a world of killers. Hamas could not survive if not for its enablers around the world.” Excerpt from WSJ Opinion pages at...
https://www.wsj.com/articles/blaming-israel-for-rescuing-its-people-hamas-gaza-war-17581387?mod=opinion_trendingnow_article_pos1

MICHIGAN SENTIMENT (Univ Michigan)
“Consumer sentiment was little changed in June; this month’s reading was a statistically insignificant 3.5 index points below May and within the margin of error. Sentiment is currently about 31% above the trough seen in June 2022 amid the escalation in inflation. Assessments of personal finances dipped, due to modestly rising concerns over high prices as well as weakening incomes. Overall, consumers perceive few changes in the economy from May.” Press release at...
http://www.sca.isr.umich.edu/
My cmt: Weird that almost every news outlet reported that sentiment fell, even though the Michigan press release noted the decline was “within the margin of error.” Proper reporting would have stated there was no change from last month.

MARKET REPORT / ANALYSIS
-Friday the S&P 500 was little changed at 5432.
-VIX rose about 6% to 12.66.
-The yield on the 10-year Treasury declined to 4.221%.

MY TRADING POSITIONS:
UWM – Added 5/2/2024
QLD – Added 4/29/2024
XLK – Holding since the October 2022 lows.

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) was 11 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 moving higher, a bullish sign.

TODAY’S COMMENT:
Thursday there was another Hindenburg Omen and as the S&P 500 squeaked out another new-high, only a small number of issues on the NYSE made new, 52-week highs. The 10-dMA of issues advancing on the NYSE also fell below 50%, reminding us that less than half of the issues on the NYSE have been going up over the last 2-weeks. These are signs that the advance is narrow.

When the Index jumped higher after the CPI news was good, I had hoped that markets would begin to broaden out – that has not been the case.

The S&P 500 remains 12.5% above the 200-dMA. The bear sign is greater than 12% so this can be a drag on markets. The Index can get a lot higher than 12% above the 200-day; it was 20% above its 200-day back in October of 2009. Then, the S&P 500 managed to climb another 4% before there was about a 10% retreat, but that was a rare event. Usually, 12% is a reasonable limit. From here, the best case would be a slowing of the advance so the 200-dMA can catch up.

The Bull/Bear indicator spread is +3 (3 more Bull indicators than Bear indicators). We’d like to see it higher, but it is not bearish enough for me to cut stock holdings.

LONG-TERM INDICATOR: The Long Term NTSM indicator remained BUY: PRICE, VOLUME & VIX are bullish; SENTIMENT is 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 bullish, but cautiously so, since markets are stretched and breadth is once again looking weak.

ETF - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily) ETF ranking follows:

Thursday, June 13, 2024

PPI ... Jobless Claims ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

TODAY’S COMMENT:
“CNBC’s Jim Cramer on Thursday said tech stocks have been integral to the market rally, and other sectors can’t quite say the same. Cramer pointed to weakness in sectors like banking, health care, transport and food and beverage.” From CNBC at...
https://www.cnbc.com/2024/06/13/cramer-says-the-market-cant-broaden-out-due-to-uncertainty-away-from-tech.html

That seems to be the case. We are seeing a back-and-forth movement in Breadth. Today, the 10-dMA of issues advancing on the NYSE slipped back below 50% (a bearish sign) and my Breadth vs the S&P 500 indicator signaled that the S&P 500 has gotten too far ahead of advancing issues. Both are signs that the advance is narrow. We’ll just have to watch this going forward to see if it improves.

LONG-TERM INDICATOR: The Long Term NTSM indicator remained BUY: PRICE, VOLUME & VIX are bullish; SENTIMENT is 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 bullish, but somewhat cautiously so, since markets are stretched and breadth is once again looking weak.

ETF - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily) ETF ranking follows:

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.)

Wednesday, June 12, 2024

CPI ... 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.

THE SECRET COURT TAPES (WSJ)
“An activist who thinks America is in danger of becoming a “Christian theocracy” infiltrated a gala at the Supreme Court, secretly taped herself trying to goad two conservative Justices into untoward remarks, and all she got was . . . this? The fact that her story led the news on Tuesday says more about the media’s obsessions than anything else...
The patter with Ms. Windsor has the weary tone of humoring chitchat. Anybody who does such events knows the drill. Chief Justice John Roberts manages to parry and escape. “You don’t think there’s, like, a role for the Court in, like, guiding us toward a more moral path?” Ms. Windsor asks. “No,” he says. “I think the role for the court is deciding the cases. If I start—would you want me to be in charge of guiding us toward a more moral path? That’s for the people we elect.” Opinion at...
https://www.wsj.com/articles/samuel-alito-martha-ann-alito-lauren-windsor-supreme-court-historical-society-tapes-19771448?mod=opinion_lead_pos1

CPI (CNBC)
“The consumer price index showed no increase in May as inflation slightly loosened its stubborn grip on the U.S. economy, the Labor Department reported Wednesday. The CPI, a broad inflation gauge that measures a basket of goods and services costs across the U.S. economy, held flat on the month though it increased 3.3% from a year ago, according to the department’s Bureau of Labor Statistics” Story at...
https://www.cnbc.com/2024/06/12/cpi-report-june-inflation.html

CRUDE INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 3.7 million barrels from the previous week. At 459.7 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 0.9% to 5421.
-VIX fell about 6% to 12.04.
-The yield on the 10-year Treasury declined to 4.318%.

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) moved sharply to the Bull side (red line in the chart below). Today, there were 7 Bear-signs and 18-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 moving higher, a bullish sign.

TODAY’S COMMENT:
The CPI news was good and markets celebrated.

Wednesday brought another new, all-time high for the S&P 500. This time more than twice as many issues on the NYSE made new 52-week highs, compared to yesterday. That cancels one major worrisome indicator that we have been watching. In addition, Breadth made significant improvements. The moving averages at 10, 50 and 100 days for issues advancing on the NYSE are all above 50%. One day cured several breadth indicators and creates a lot more optimism for the markets. The two remaining negative breadth indicators are my MACD of Breadth and the McClellan Oscillator.

The Spread between Utilities (XLU) and the S&P 500 is narrowing, indicated by the upward moving red line in the chart below. I see that as a bullish indicator. Utilities have been outpacing the S&P 500 for a while.

Not everything looks great though. Here are a few important Bear signs:
The S&P 500 is 12.7% 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.

Wednesday was a statistically significant up-day. That just means that the price-volume move exceeded my statistical parameters. Statistics show that a statistically-significant, up-day is followed by a down-day about 60% of the time.

Bollinger Bands are overbought today, but RSI is not. Without both agreeing, I ignore these indicators.

All-in-all, the preponderance of indicators is now well bullish, but markets are stretched as indicated by the above bear signs. I’m still heavily invested in stocks, but I have some cash now from sales of losers (CRM & XLE) and strong gains in the 2x S&P 500 ETF (SSO). I’ll decide whether to reset the SSO trade in a few days. I’m not in a rush.

LONG-TERM INDICATOR: The Long Term NTSM indicator remained BUY: PRICE, VOLUME & VIX are bullish; SENTIMENT is 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 bullish, but somewhat cautiously so, since markets are stretched.

ETF - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily) ETF ranking follows:

My basket of Market Internals improved to BUY. (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.)