“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
JOBLESS CLAIMS (Business Report)
“U.S. applications for jobless aid fell again last week to their lowest level since April, further evidence that the job market has withstood aggressive rate hikes by the Federal Reserve as it attempts to cool the economy and bring down inflation. Applications for jobless aid in the U.S. for the week ending Jan. 28 fell by 3,000 last week to 183,000, from 186,000 the previous week...” Story at...
https://www.businessreport.com/business/us-initial-jobless-claims-drop-to-lowest-level-since-april
PRODUCTIVITY (Briefing.com)
“Q4 productivity increased 3.0% (Briefing.com consensus 2.5%), as output increased 3.5% and hours worked increased 0.5%, following an upwardly revised 1.4% increase (from 0.8%) in the third quarter.
Unit labor costs rose 1.1% (Briefing.com consensus 1.5%) following a downwardly revised 2.0% (from 2.4%) in the third quarter... The key takeaway from the report is that the pickup in productivity helped tame unit labor costs, which is something the Fed will be pleased to see.”
https://www.briefing.com/calendars/economic/display-article?ArticleId=ER20230202083002Productivity-Prel&FileName=prod.htm
FACTORY ORDERS (YahooFinance)
“New orders for U.S.-manufactured goods rebounded in December, but higher interest rates are weighing on business spending on equipment, which could keep manufacturing under pressure.
The Commerce Department said on Thursday that factory orders increased 1.8% after dropping 1.9% in November.” Story at...
https://finance.yahoo.com/news/u-factory-orders-rebound-december-152132995.html
BIG YEAR IN STOCKS COMING (Business Insider via msn.com)
“The stock market is poised for massive upside in 2023 after a rare trifecta of bullish indicators was completed in January. That's according to research that was pioneered by Jeff Hirsch of the Stock Trader's Almanac, and was recently highlighted by a number of Wall Street firms, including Carson Group's Ryan Detrick and Ned Davis Research.;” Story at...
The stock market just hit a rare trifecta of bullish indicators that suggests big upside this year (msn.com)
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 rose about 1.5% to 4180.
-VIX bucked the trend and rose about 5% to 18.73. (Traders may have been buying options to protect gains.)
-The yield on the 10-year Treasury dipped to 3.405%.
PULLBACK DATA:
-Drop from Top: 12.9% as of today. 25.4% max (on a closing basis).
-Trading Days since Top: 272-days.
The S&P 500 is 5.8% ABOVE its 200-dMA & 5.7% 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:
QLD – (2xNas 100) The XLK bottomed 12 October, about the same time as when the S&P 500 retested its low. QLD seems like a decent bet even though the CNBC crowd doesn’t like Tech.
XLK – Technology ETF.
SSO – 2x S&P 500.
XLE – Energy Sector ETF. Low PE; good Dividend; decent momentum, although momentum has been slipping recently.
BA – (Boeing) I am late on this one, but we’ll see.
XLY - Consumer Discretionary ETF. (I considered selling XLY. But it has been a good performer recently, so I’ll continue to watch it.)
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:
I mentioned recently, that valuations were a poor timing tool. To clarify, valuations are not a good method to time the market as a whole. Valuations are important when looking at individual stocks.
Today we saw a Golden Cross for the S&P 500. This is
the opposite of the Death Cross. It’s been a long time since the Death Cross
occurred. That happened on 11 March when
the 50-dMA dropped below the 200-dMA. Today, the 50-dMA crossed above the
200-dMA (The Golden Cross), a bullish sign.
The long-term and short-term Fosback New-High/New-low Logic
Indexes are both bullish. These indicators are based on 52-week, new-highs and
new-lows. There were 203 New-highs today and only 5 new-lows – very bullish.
Most indicators are bullish, but not all. The
Advance/Decline Ratio (a measure of Breadth), the late day-action-Smart Money
indicator, and Bollinger Bands are all overbought. RSI is still neutral. I’ll sell
leveraged positions if RSI joins the overbought parade.
Friday may be a little rough: Apple, Amazon &
Alphabet (Google) all missed expectations and were down in after-hours trading.
In addition, Thursday 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.
Today, the daily sum of 20 Indicators remained +13 (a
positive number is bullish; negatives are bearish); the 10-day smoothed sum
that smooths the daily fluctuations improved from +48 to 60. (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: PRICE & VOLUME are positive. VIX & SENTIMENT are neutral.
(The important BUY in this indicator was on 21 October, 7-days after the bottom. My NTSM buy-signal was 27 September, based on improved internals at the retest low, about 2% before the bottom.)
Bottom line: I’m a BULL.
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 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.
“U.S. applications for jobless aid fell again last week to their lowest level since April, further evidence that the job market has withstood aggressive rate hikes by the Federal Reserve as it attempts to cool the economy and bring down inflation. Applications for jobless aid in the U.S. for the week ending Jan. 28 fell by 3,000 last week to 183,000, from 186,000 the previous week...” Story at...
https://www.businessreport.com/business/us-initial-jobless-claims-drop-to-lowest-level-since-april
“Q4 productivity increased 3.0% (Briefing.com consensus 2.5%), as output increased 3.5% and hours worked increased 0.5%, following an upwardly revised 1.4% increase (from 0.8%) in the third quarter.
Unit labor costs rose 1.1% (Briefing.com consensus 1.5%) following a downwardly revised 2.0% (from 2.4%) in the third quarter... The key takeaway from the report is that the pickup in productivity helped tame unit labor costs, which is something the Fed will be pleased to see.”
https://www.briefing.com/calendars/economic/display-article?ArticleId=ER20230202083002Productivity-Prel&FileName=prod.htm
“New orders for U.S.-manufactured goods rebounded in December, but higher interest rates are weighing on business spending on equipment, which could keep manufacturing under pressure.
The Commerce Department said on Thursday that factory orders increased 1.8% after dropping 1.9% in November.” Story at...
https://finance.yahoo.com/news/u-factory-orders-rebound-december-152132995.html
“The stock market is poised for massive upside in 2023 after a rare trifecta of bullish indicators was completed in January. That's according to research that was pioneered by Jeff Hirsch of the Stock Trader's Almanac, and was recently highlighted by a number of Wall Street firms, including Carson Group's Ryan Detrick and Ned Davis Research.;” Story at...
The stock market just hit a rare trifecta of bullish indicators that suggests big upside this year (msn.com)
-Thursday the S&P 500 rose about 1.5% to 4180.
-VIX bucked the trend and rose about 5% to 18.73. (Traders may have been buying options to protect gains.)
-The yield on the 10-year Treasury dipped to 3.405%.
-Drop from Top: 12.9% as of today. 25.4% max (on a closing basis).
-Trading Days since Top: 272-days.
The S&P 500 is 5.8% ABOVE its 200-dMA & 5.7% 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.
QLD – (2xNas 100) The XLK bottomed 12 October, about the same time as when the S&P 500 retested its low. QLD seems like a decent bet even though the CNBC crowd doesn’t like Tech.
XLK – Technology ETF.
SSO – 2x S&P 500.
XLE – Energy Sector ETF. Low PE; good Dividend; decent momentum, although momentum has been slipping recently.
BA – (Boeing) I am late on this one, but we’ll see.
XLY - Consumer Discretionary ETF. (I considered selling XLY. But it has been a good performer recently, so I’ll continue to watch it.)
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.)
I mentioned recently, that valuations were a poor timing tool. To clarify, valuations are not a good method to time the market as a whole. Valuations are important when looking at individual stocks.
(The important BUY in this indicator was on 21 October, 7-days after the bottom. My NTSM buy-signal was 27 September, based on improved internals at the retest low, about 2% before the bottom.)
Bottom line: I’m a BULL.
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
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
