Jobless Claims ... Personal Spending ... PCE Prices ... ISM Manufacturing ... Best DOW Stocks ... Best ETFs … Stock Market Analysis ...

 
FRIDAY’S BLOG WILL BE POSTED SUNDAY.
 
“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
JOBLESS CLAIMS (WSJ)
“Applications for U.S. unemployment benefits fell last week, consistent with a labor market that remains resilient despite signs of a broader economic slowdown. Initial jobless claims, a proxy for layoffs, decreased by 16,000 to a seasonally adjusted 225,000 last week. Story at...
https://www.wsj.com/articles/u-s-jobless-claims-fell-last-week-showing-solid-labor-market-11669903138
 
PERSONAL SPENDING (WSJ)
American households ramped up spending in October headed into the holiday season, taking advantage of a jump in income and a slight easing of still-high inflation. Consumer spending increased a seasonally adjusted 0.8% in October...” Story at...
https://www.wsj.com/articles/inflation-consumer-spending-personal-income-october-2022-11669854512
 
PCE PRICES (CNN)
“A key measure of consumer prices slowed somewhat in October, another hopeful sign that inflation pressures could be moderating. The Personal Consumption Expenditures price index, or PCE, rose 6% in October compared to a year earlier, the Commerce Department reported Thursday. That’s down from the upwardly revised 6.3% annual increase reported for September. PCE is the Federal Reserve’s preferred inflation gauge since it gives a more complete picture of consumer prices.”  Story at...
https://www.cnn.com/2022/12/01/economy/pce-inflation-report-october/index.html
 
ISM MANUFACTURING
“Economic activity in the manufacturing sector contracted in November for the first time since May 2020 after 29 consecutive months of growth, say the nation's supply executives in the latest Manufacturing ISM® Report On Business®. The November Manufacturing PMI® registered 49 percent, 1.2 percentage points lower than the 50.2 percent recorded in October.” Report at...
https://www.ismworld.org/supply-management-news-and-reports/reports/ism-report-on-business/pmi/november/
 
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 slipped about 0.1% to 4077.
-VIX bucked the trend and dipped about 4% to 19.84.
-The yield on the 10-year Treasury dipped to 3.511%.
 
PULLBACK DATA:
-Drop from Top: 15% as of today. 25.4% max (on a closing basis).
-Trading Days since Top: 230-days.
The S&P 500 is 0.7% ABOVE its 200-dMA & 7.1% above its 50-dMA. (The last rally failed at the 200-dMA. The Index closed above its 200-dMA on consecutive days and that’s a good sign.)
*I won’t call the correction over until the S&P 500 makes a new-high; however, evidence suggests the bottom was in the 3600 area and I am fully invested with a higher percentage of stocks than normal.
 
MY TRADING POSITIONS:
XLI – Industrial ETF (XLI still looks good to me. Nearly 10% of XLI is in Boeing and Caterpillar and they are both strong performers in the DOW momentum analysis.) 
QLD – 2x Nas 100
DDM – 2x Dow 30. I may sell DDM and replace it with SSO (2x S&P 500), but for now, the DOW 30 is still doing better than the S&P 500.
XLK – Technology ETF
 
CVX – (I may hold this as a long-term position. I already owned a small position in CVX.)
 
TODAY’S COMMENT:
Most of the Indices were down today, but the Nasdaq was up.  That’s encouraging. New-high/new-low data was encouraging too.
 
The spread between new-highs and new-lows (highs minus lows) was 95 today. One has to go back to December (before the correction start) to find a higher number.  If that trend continues, we may be able to feel a lot more confident about the markets.
 
Now on CNBC: Troy Gayeski at FS Investments is recommending that investors not buy the rally. – I think he is wrong.  
 
The daily sum of 20 indicators is a very bullish +17 today.
 
Today, the daily sum of 20 Indicators improved from +12 to +17 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations improved from +143 to 146. (The trend direction is more important than the actual number for the 10-day value.) These numbers sometimes change after I post the blog based on data that comes in late. Most of these 20 indicators are short-term so they tend to bounce around a lot.
 
LONG-TERM INDICATOR: The Long Term NTSM indicator remained BUY: SENTIMENT is neutral; VOLUME, VIX, & PRICE are bullish.  (The important Buy signal from this indicator ensemble was 21 October (7 days after the low); my first buy indication was on 21 27 September (2% above the low) based on analysis of retests of the June low.) 
 
Bottom line: I remain a Bull. I think the bottom was 3577 on 12 October. There is always the possibility that the markets could retest those lows, but it seems less likely that a retest will occur in 2022.
 
I’m now invested with about 75% of the portfolio invested in stocks. (As a retiree, 50% invested in stocks is my “normal” portfolio.) 75% stocks is uber-bullish and that’s as far as I’ll go.
 
BEST ETFs - 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
XLE has taken the top position in the ETF momentum index. I own CVX so I already have good exposure to energy.
 
BEST DOW STOCKS - TODAY’S MOMENTUM RANKING OF THE DOW 30 STOCKS (Ranked Daily)
DOW 30 momentum ranking follows:

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 improved to BUY.
(Market Internals are 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 75% stocks, including stock mutual funds and ETFs. I’m usually about 50% invested in stocks. I’ll cut back on stocks if we see serious bear signs.
 
I trade about 15-20% of the total portfolio using the momentum-based analysis I provide here. If I can see a definitive bottom, I’ll add a lot more stocks to the portfolio using an S&P 500 ETF.