FED Minutes ... EIA 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.
 
FOMC MINUTES (FED Minutes)
“’Federal Reserve officials saw that slowing inflation could support a peak in the federal-funds rate this year...’Almost all participants agreed that it was appropriate to raise the target range for the federal-funds rate 25 basis points at this meeting,’ the minutes read. ‘Many of these participants observed that a further slowing in the pace of rate increases would better allow them to assess the economy’s progress toward the Committee’s goals of maximum employment and price stability.’
“A few” participants favored a 0.50 percentage point increase on Feb. 1, according to the minutes.” Story at...
https://www.barrons.com/articles/fed-meeting-minutes-release-today-b19c6099
 
EIA CRUDE INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 16.3 million barrels from the previous week. At 471.4 million barrels, U.S. crude oil inventories are about 8% 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 fell about 0.2% to 3991.
-VIX slipped about 3% to 22.29. (The Options Crowd may think the decline is over.)
-The yield on the 10-year Treasury dipped to 3.925%.
 
PULLBACK DATA:
-Drop from Top: 16.8% as of today. 25.4% max (on a closing basis).
-Trading Days since Top: 283-days.
The S&P 500 is 1.3% ABOVE its 200-dMA & 0.3% 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:
XLK – Technology ETF.
XLE – Energy Sector ETF. It hasn’t been doing much recently, but Russia is cutting production and that should help the sector.  We have a good dividend in the meantime.
BA – (Boeing) I am late on this one, but we’ll see.
XLY - Consumer Discretionary ETF.
 
SHY – Short term bonds. 30-day yield is 4.2%. (Trailing 1-year yield is 1.3%.) I’ll hold this, but if the market retests the lows, I’ll sell it and buy stocks.)
 
TODAY’S COMMENT:
Today’s drop in the S&P 500 was pretty closely aligned with the release of the FED minutes at 2PM.  I am not sure that the news deserved the reaction. Fed member Bullard has been giving speeches that he wanted to raise rates faster, but that’s nothing new and he’s not currently a voting member.
 
At least there was a bounce at the end of the day. 
 
I still don’t see signs that the decline is over. That’s not especially unusual since short term declines don’t aways send actionable signals. Today could have been a short-term bottom. The S&P 500 is only 0.3% above its 50-dMA and that may be close enough. We’ll see.  
 
I’ll reset my leveraged positions (SSO & QLD) if the Index breaks its 50-dMA or if I see other bull signs. Depending on market action I may buy back tomorrow. Market internals were leaning bullish Tuesday, but not by much.
 
Today, the daily spread of 20 Indicators (Bulls minus Bears) remained -2 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations declined from +29 to +19. (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 HOLD: PRICE is positive; VIX & SENTIMENT are neutral.  VOLUME was negative.
 
(The important BUY in this indicator was on 21 October, 7-days after the 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.)
 
Bottom line: I’m remain a BULL, although somewhat more cautious.
 
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 SELL. (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 65% 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.