EIA Crude Inventories ... Best DOW Stocks ... Best ETFs … Stock Market Analysis

 
“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
EIA CRUDE INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 19 million barrels from the previous week. At 439.6 million barrels, U.S. crude oil inventories are about 1% above 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 1.3% to 3970.
-VIX rose about 2.5% to 21.09. (Perhaps the Options Crowd is buying protection in case the CPI data is bad tomorrow?)
-The yield on the 10-year Treasury dipped to 3.541%.
 
PULLBACK DATA:
-Drop from Top: 17.2% as of today. 25.4% max (on a closing basis).
-Trading Days since Top: 257-days.
The S&P 500 is 0.4% BELOW its 200-dMA & 1.5% ABOVE its 50-dMA.
*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.
 
MY TRADING POSITIONS:
I am doing less trading now. You may do better watching the momentum charts rather than my moves.
XLK – Technology ETF. (I now have a small profit in XLK.)
SSO – 2x S&P 500. (My indicators are improving.)
XLE – Energy Sector ETF. Low PE; good Dividend; decent momentum.
 
Consumer Discretionary (XLY) has been outperforming recently, another bullish sign. That would be a good choice now if the bottom really has been made.
 
TODAY’S COMMENT:
The last time the S&P 500 was above its 200-dMA was back in April . The Index didn’t quite get there today – it closed 0.4% below it – but it is getting closer.
 
The Junk Bond(JNK) spread is looking very bullish since JNK has been showing a positive divergence (indicated by the rising red line) since late December.

 
The S&P 500 closed 0.3% above its 50-dMA today, Wednesday. Theat’s the second consecutive close above the 50-dMA and that is a good sign in the charts.
 
Today, the daily sum of 20 Indicators improved from +12 to +13 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations increased from +76 to 89. (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 flpped back to BUY: PRICE & VOLUME are positive; VIX & SENTIMENT are neutral. (The important BUY in this indicator was on 21 October, 7-days after the bottom. The NTSM buy-signal was 27 September, based on improved internals at the retest low.)
 
The Advance / Decline Ratio is one fo the few bearish indicators today. It is overbought so that could give us a down-day soon. Sometimes this indicator can be a decent short-term indicator, but not always.  It is very short-term and even when it is correct, the signal can resolve itself quickly. It is not a top indicator. With CPI due Thursday, I think the news will overpower the indicators.
 
Indicators have gotten more bullish and the S&P 500 closed above its 50-dMA again, so I significantly increased my stock allocation.
 
Bottom line: I’m a BULL at this point. I am over-invested in the markets, back to where I was before the recent weakness got me worried that the S&P 500 might make a lower low, even though my analysis suggested that the bottom was roughly 3600 for the S&P 500.
 
I’m now have about 75% of the portfolio invested in stocks. (As a retiree, 50% invested in stocks is my “normal” portfolio.) I was 75% invested in stocks in early December so I am just resetting my stock allocation based on my analysis that showed the correction bottom probably occurred on 27 September. As the rally ages, I’ll cut back toward a 50% stock alloaction more suitable for my status as a retiree.
 
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
 
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
 
WEDNESDAY MARKET INTERNALS (NYSE DATA)

My basket of Market Internals remained 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 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.