“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
“Employers added a booming 517,000 jobs in January as hiring unexpectedly surged despite high inflation, rising interest rates and the prospect of a weakening economy. The unemployment rate fell from 3.5% to 3.4%, lowest since 1969... average hourly earnings rose 10 cents to $33.03, pushing down the annual increase to a still elevated 4.4% from 4.8% the previous month.” Story at...
https://www.usatoday.com/story/money/economy/2023/02/03/january-jobs-report-today-unemployment-rate/11170452002/
“The Institute of Supply Management’s non-manufacturing purchasing managers index jumped to 55.2, after dipping below the key threshold of 50 for the first time in two and a half years in December. ‘Although responses varied by industry and company, the majority of panelists indicated that business is trending in a positive direction,’ ISM chair Anthony Nieves said in a statement.” Story at...
https://www.investing.com/news/economic-indicators/ism-nonmanufacturing-pmi-jumps-in-january-2995139
“The stock market continues to behave very well, much to the dismay of the bears which are the majority. And I continue to laugh at their rationale as they hold tightly on to the notion that this is just another bear market rally that is doomed to fail. The market has strong leadership in the major market indices and sectors as well as the strength in high yield bonds. It is inarguable that the NASDAQ 100 which is technology and the Russell 200 which is small caps are leading...Any and all weakness in stocks, bonds and gold can bought until proven otherwise.” - Paul Schatz, President Heritage Capital.
https://investfortomorrow.com/blog/bulls-continue-to-charge-february-isnt-so-bad-fed-to-hike-rates/
-Friday the S&P 500 dropped about 1% to 4136.
-VIX bucked the trend and dipped about 2% to 18.33.
-The yield on the 10-year Treasury rose to 3.524%.
-Drop from Top: 13.8% as of today. 25.4% max (on a closing basis).
-Trading Days since Top: 273-days.
The S&P 500 is 4.7% ABOVE its 200-dMA & 4.5% 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.
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’m not an economist, but 3.4% unemployment is too low. They used to teach in MBA programs that 4% was the lowest sustainable rate. 3.4% suggests an overheated economy and the fed might be concerned even without inflation. Still, the best way to interpret the data is to look at market reaction. It wasn’t all that great today, but the S&P 500 didn’t give back all of yesterday’s gains.
-The 10-dMA percentage of issues advancing on the NYSE (Breadth) is above 50%.
-The 50-dMA percentage of issues advancing on the NYSE (Breadth) is above 50%.
-The 100-dMA percentage of issues advancing on the NYSE (Breadth) is above 50%.
-There was a Zweig Breadth Thrust 12 January. That’s a rare, very-bullish sign.
-There was a Follow-thru day 20 Jan 2023 & another 2 February that cancels prior Distribution Days.
-The smoothed advancing volume on the NYSE is rising.
-MACD of the percentage of issues advancing on the NYSE (breadth) made a bullish crossover 17 Jan.
-MACD of S&P 500 price made a bullish crossover 11 Jan.
-My Money Trend indicator is rising.
-Long-term new-high/new-low data.
-Short-term new-high/new-low data.
-The long-term, 50-dEMA, Fosback Hi-Low Logic Index is bullish.
-The short-term, 10-dayEMA, Fosback Hi-Low Logic Index is bullish.
-Slope of the 40-dMA of New-highs is rising.
-McClellan Oscillator.
-The graph of the 100-day Count (the 100-day sum of up-days) is rising sharply.
-The Smart Money (late-day action) is bullish.
-90% up-volume days - the last one was 31 Jan. and before that, 30 November. That’s pretty far apart, but I’ll still put this in the bullish column.
-The 5-day EMA is above the 10-day EMA so short-term momentum is bullish.
-The 5-10-20 Timer System is BUY; the 5-dEMA and 10-dEMA are both above the 20-dEMA.
-On average, the size of up-moves has been larger than the size of down-moves over the last month.
-59% of the 15-ETFs that I track have been up over the last 10-days.
-S&P 500 is outperforming Utilities (XLU-ETF).
-There have only been 4 Statistically-Significant days (big moves in price-volume) in the last 15-days.
-Sentiment.
-Bollinger Bands.
-Overbought/Oversold Index (Advance/Decline Ratio).
-Issues advancing on the NYSE (Breadth) compared to the S&P 500.
-There have been 6 up-days over the last 10 sessions – neutral.
-There have been 12 up-days over the last 20 sessions - neutral.
-RSI
-The 50-dMA percentage of issues advancing on the NYSE (Breadth) has been above 50%, for 3 days in a row ending the “correction-now” signal.
-The Calm-before-the-Storm/Panic Indicator flashed a panic-buying signal 10 November - expired.
-VIX indicator.
-The S&P 500 is 2.8% above its 200-dMA. (Bull indicator is 12% below the 200-day, although this is based on “normal” pullbacks.)
-There was a Hindenburg Omen signal 8 April – expired.
-2.8% of all issues traded on the NYSE made new, 52-week highs when the S&P 500 made a new all-time-high, 3 January 2022. (There is no bullish signal for this indicator.) This indicated that the advance was too narrow and a correction was likely to be >10%. It proved correct, but is now Expired
-The 52-week, New-high/new-low ratio improved by 3.5 standard deviations. More simply, the spread between new-highs and new-lows improved by 716 on 14 October. That’s a solid bottom sign at a retest. – Expired.
-13 & 21 Oct were Bullish Outside Reversal Days with no Bearish Outside Reversal days since then - expired.
-Smoothed Buying Pressure minus Selling Pressure is falling.
-XLI-ETF (Cyclical Industrials) is outperforming the S&P 500, but it is turning down sharply so let’s call this one bearish.
(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 after the bottom, based on stronger market action.
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
