“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
FOMC RATE DECISION (USA Today)
“The Federal Reserve raised its key short-term interest rate by a quarter percentage point Wednesday, pushing ahead with its aggressive campaign to tame inflation despite financial turmoil following Silicon Valley Bank’s collapse. Fed officials forecast another quarter point in rate increases this year to a peak range of 5% to 5.25%, in line with its December estimate and lower than the level markets anticipated before SVB’s meltdown.” Story at...
https://www.usatoday.com/story/money/economy/2023/03/22/fed-meeting-rate-hike-live-updates/11509144002/
CRUDE INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 1.1 million barrels from the previous week. At 481.2 million barrels, U.S. crude oil inventories are about 8% above the five year average for this time of year.” Story at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf
“We forecast retail gasoline prices to average near $3.20/gal in the fourth quarter of 2023 (4Q23), down more than 30 cents/gal from 4Q22, and to decrease further to an average of about $3.10/gal in 2024.” – EIA.
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 fell about 1.7% to 3937.
-VIX slipped only about 4% to 22.26. (That’s a bit odd, considering the big drop in the Index. The Options Players aren’t as bearish?)
-The yield on the 10-year Treasury fell to 3.444%.
PULLBACK DATA:
-Drop from Top: 17.9% as of today. 25.4% max (on a closing basis).
-Trading Days since Top: 305-days.
The S&P 500 is 0.1% ABOVE its 200-dMA & 1.9% 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. They have more work than they can handle and are hiring. They should do well going forward. Boeing reports earning 4/26/2023.
XLY - Consumer Discretionary ETF.
*KRE – Regional Banking ETF. Added Monday. This is a small position for me. I have no cash left.
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.)
If it’s not tech, it’s probably not working.
TODAY’S COMMENT:
The chart says it all.
Markets were well mannered up until the 2PM release of the FED decision
to raise interest rates by a quarter %.
Markets expected it and made new highs on the day. Unfortunately, Fed Chair Powell held his
usual press conference and the markets didn’t like what he had to say. Powell pointed
out that financial conditions are tightening.
What he means is that banks will be less likely to loan funds since the
financial sector has been roiled by bank failures. That will slow the economy. It may keep the Fed from raising rates again,
but the Fed kept the possibility of another hike in rates on the table.
There was some good news today. Junk Bonds (JNK-ETF) were
up today. The S&P 500 stayed above its low of 3856 from 7 days ago and it
managed to close slightly above its 200-dMA. Closing above the 200-dMA is a big
deal for me. It needs to stay above it for me to remain bullish. I won’t turn
bearish if it drops below its 200-day; but if it stays there for a week, I will
be a seller.
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 -44 to -45.
(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: SENTIMENT; VIX, VOLUME & PRICE 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 a nervous bull. The S&P 500 remained
above its 200-dMA, but just barely.
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
WEDNESDAY MARKET INTERNALS
(NYSE DATA)
My basket of Market Internals remained 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.
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.
“The Federal Reserve raised its key short-term interest rate by a quarter percentage point Wednesday, pushing ahead with its aggressive campaign to tame inflation despite financial turmoil following Silicon Valley Bank’s collapse. Fed officials forecast another quarter point in rate increases this year to a peak range of 5% to 5.25%, in line with its December estimate and lower than the level markets anticipated before SVB’s meltdown.” Story at...
https://www.usatoday.com/story/money/economy/2023/03/22/fed-meeting-rate-hike-live-updates/11509144002/
“U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 1.1 million barrels from the previous week. At 481.2 million barrels, U.S. crude oil inventories are about 8% above the five year average for this time of year.” Story at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf
“We forecast retail gasoline prices to average near $3.20/gal in the fourth quarter of 2023 (4Q23), down more than 30 cents/gal from 4Q22, and to decrease further to an average of about $3.10/gal in 2024.” – EIA.
-Wednesday the S&P 500 fell about 1.7% to 3937.
-VIX slipped only about 4% to 22.26. (That’s a bit odd, considering the big drop in the Index. The Options Players aren’t as bearish?)
-The yield on the 10-year Treasury fell to 3.444%.
-Drop from Top: 17.9% as of today. 25.4% max (on a closing basis).
-Trading Days since Top: 305-days.
The S&P 500 is 0.1% ABOVE its 200-dMA & 1.9% 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.
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. They have more work than they can handle and are hiring. They should do well going forward. Boeing reports earning 4/26/2023.
XLY - Consumer Discretionary ETF.
*KRE – Regional Banking ETF. Added Monday. This is a small position for me. I have no cash left.
ETF - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily)
ETF ranking follows:
*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:
For more details, see NTSM Page at…
https://navigatethestockmarket.blogspot.com/p/a-system-for-trading-dow-30-stocks-my_8.html
