GDP ... Jobless Claims ... 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.
JOBLESS CLAIMS (Bloomberg)
US claims for unemployment benefits unexpectedly fell to
the lowest in three weeks, signaling unrelenting tightness in the labor market.
Initial unemployment claims decreased by 3,000 to 192,000...” Story at...
https://www.bloomberg.com/news/articles/2023-02-23/us-unemployment-claims-drop-to-lowest-level-in-four-weeks
GDP (CNN)
“The US economy grew at a 2.7% annual rate in the final
three months of the year, the Commerce Department reported Thursday. That’s
less than the previous estimate of 2.9% growth in the quarter.” Story
at...
https://www.cnn.com/2023/02/23/economy/gdp-revision-us-economy/index.html\
CRUDE OIL INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those
in the Strategic Petroleum Reserve) increased by 7.6 million barrels from the
previous week. At 479.0 million barrels, U.S. crude oil inventories are about
9% above 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 rose about 0.5% to 4012.
-VIX slipped about 5% to 21.14.
-The yield on the 10-year Treasury dipped to 3.885%.
PULLBACK DATA:
-Drop from Top: 16.3% as of today. 25.4% max (on a
closing basis).
-Trading Days since Top: 283-days.
The S&P 500 is 1.8% ABOVE its 200-dMA & 0.8%
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:
When I plugged in the lows for the day, we note that both
Bollinger Bands and RSI were oversold around mid-day, a pretty good short-term
buy signal. The Index dropped to near
the 200-dMA and bounced higher, so intra-day, the signal was to buy. All of
my work is based on closing data and the close was a lot higher and neither RSI
or Bollinger Bands were oversold at the close; it’s hard to know if buying mid-day
would have been the right call or not.
Buying exactly at a low is not usually possible, and if mid-day
Thursday was the low for this small retreat, I missed it. I’ll watch
tomorrow. If we see reasonably strong
buying, I’ll add to stock holdings with leveraged positions. A down-day may
suggest a little more watching to see if the Index will close below the
50-dMA.
I am still bullish, so this is all about trying to avoid
buying a leveraged position only to have it fall sharply for a few days after
the buy.
The S&P 500 is outpacing the Utilities ETF (XLU) by a
lot. That’s bullish - If investors were
worried about a stock market collapse, they would buy XLU.
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 +19 to +8.
(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
THURSDAY 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.
