CPI ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

 
“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
"A too-powerful, unaccountable Court is a threat to the entire system. Short of a constitutional amendment retracting their life tenure, or a filibuster-proof majority in the Senate willing to do controversial things such as restricting the Court’s jurisdiction or expanding the number of justices, there’s nothing the voting public can really do about this political power grab and its lasting impact on the lives of millions,"- Kimberly Wehle, Law Professor, American University.
 
“For decades we disagreed with [Supreme] Court rulings when progressives held sway, but we never called the Court illegitimate. But now that the left has lost the Court as a backup legislature for its policy goals, the institution is supposedly broken. Tell us again who is the threat to democratic institutions?” – WSJ Editorial Board.
 
CPI / CORE CPI (CNBC)
“Inflation rose in February but was in line with expectations, likely keeping the Federal Reserve on track for another interest rate hike next week despite recent banking industry turmoil. The consumer price index increased 0.4% for the month, putting the annual inflation rate at 6%... Excluding volatile food and energy prices, core CPI rose 0.5% in February and 5.5% on a 12-month basis. The monthly reading was slightly ahead of the 0.4% estimate, but the annual level was in line.” Story at...
https://www.cnbc.com/2023/03/14/cpi-inflation-february-2023-.html
 
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 rose about 1.7% to 3919.
-VIX fell about 11% to 23.73.
-The yield on the 10-year Treasury was 3.682%.
 
PULLBACK DATA:
-Drop from Top: 18.3% as of today. 25.4% max (on a closing basis).
-Trading Days since Top: 299-days.
The S&P 500 is 0.5% BELOW its 200-dMA & 2.1% BELOW 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 not trading as much as in the past. You may wish to use the momentum charts and/or the Monday 40-day gain charts for trading the Dow stocks and ETFs.
QLD – 2xNasdaq 100
SSO – 2x S&P 500
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 4.6%. (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, (Tuesday) unchanged volume was again very high. As I’ve often said, many believe that this indicator suggests investor confusion at market turning points. Recently, when we saw this indicator near the lower trend line, (as it is now) the S&P 500 bounced higher. It does look bullish as a sign for the next couple of weeks.  For the here and now, today was “statistically significant.” 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. 
 
My Money Trend indicator fell today.  That’s bearish and I hope it is a fake out - not every indicator is right all of the time so I hope it is wrong this time.  On a positive note, there were some new bull signs today. The short-term Fosback Hi-lo Logic Index turned bullish; the smoothed advancing volume on the NYSE turned up to bullish; there was a bullish swing in new-hi/new-low spread (a lot fewer new-lows today). Those are good signs that make me more optimistic that the recent stock market weakness may be over, although we can never expect the markets to move straight up.
 
Today, the daily spread of 20 Indicators (Bulls minus Bears) improved from -8 to -4 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations declined from -9 to -14. (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 was HOLD: VIX is bearish; VOLUME, PRICE & SENTIMENT are neutral
 
(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. The NTSM sell-signal was issued 20 December, 8 sessions before the high of this recent bear market, based on the bearish Friday rundown of indicators.)
 
Bottom line: I am more bullish now, but perhaps not a complete bull yet. Let’s see if the S&P 500 can climb back above its 200-dMA. Then I’ll be a bull.
 
ETF - 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 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
 
TUESDAY MARKET INTERNALS (NYSE DATA)

My basket of Market Internals improved to HOLD. (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 and I’ll reduce stock holdings if the S&P 500 can’t close in positive territory Tuesday.
 
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.