“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
https://michaelpramirez.com/index.html
ISM SERVICES PMI (ISM via prNewswire)
“Economic activity in the services sector expanded in February for the second consecutive month as the Services PMI® registered 55.1 percent...Business Survey Committee respondents indicated that they are mostly positive about business conditions. Suppliers continue to improve their capacity and logistics, as evidenced by faster deliveries. The employment picture has improved for some industries, despite the tight labor market. Several industries reported continued downsizing."
https://www.prnewswire.com/news-releases/services-pmi-at-55-1-february-2023-services-ism-report-on-business-301761637.html
MARKET REPORT / ANALYSIS
-Friday the S&P 500 rose about 1.6% to 4046.
-VIX fell about 6% to 18.49.
-The yield on the 10-year Treasury rose to 4.062%.
PULLBACK DATA:
-Drop from Top: 15.7% as of today. 25.4% max (on a closing basis).
-Trading Days since Top: 292-days.
The S&P 500 is 2.7% ABOVE its 200-dMA & 1.5% 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.
MY TRADING POSITIONS:
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:
Thursday, there was a bullish Outside Reversal Day.
“Outside days are days where a security’s price is more volatile than the previous day. On an outside day, a security's price will reach a higher high and a lower low than the previous day. Outside days are a two-day price pattern; the difference between the open and close on the second day is larger than the first day when the open and close of the second day are outside the range of the first day.” From
https://www.investopedia.com/terms/o/outside-days.asp
It is bullish if the move is higher as it was yesterday. I don’t see this signal very often, but it seems to be a pretty good indicator. It occurred the day after the October bottom and again 6-days after that bottom. It is added to the bull list below.
There was relatively high up-volume today. Another day
with up-volume greater than 80% would be one more bullish sign to add to our
long list of bullish indicators since the October bottom.
Here’s this week’s Friday review of Indicators:
The Friday rundown of indicators is a lot more bullish than last week (now 5-bear and 16-bull), but not far from neutral. (These indicators tend to be both long-term and short-term, so they are different than the 20 that I report on daily.)
BULL SIGNS
-The smoothed advancing volume on the NYSE is rising.
-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%.
-2 March there was a Bullish Outside Reversal Day.
-MACD of the percentage of issues advancing on the NYSE (breadth) made a bullish crossover 3 March.
-Smoothed Buying Pressure minus Selling Pressure is rising.
-The smoothed advancing volume on the NYSE is rising.
-Slope of the 200-dMA is rising.
-My Money Trend indicator is rising.
-Long-term new-high/new-low data.
-Short-term new-high/new-low data.
-Slope of the 40-dMA of New-highs is rising.
-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. We have not seen a 90% down-volume day since the 2 up-volume days.
-The long-term, 50-dEMA, Fosback Hi-Low Logic Index is bullish.
-XLI-ETF (Cyclical Industrials) is outperforming the S&P 500.
-S&P 500 is outperforming Utilities (XLU-ETF).
NEUTRAL
-Bollinger Bands. (Very close to bullish.)
-Overbought/Oversold Index (Advance/Decline Ratio).
-Issues advancing on the NYSE (Breadth) compared to the S&P 500.
-There have been 4 up-days over the last 10 sessions – neutral.
-There have been 8 up-days over the last 20 sessions - neutral.
-The graph of the 100-day Count (the 100-day sum of up-days) is flat.
-RSI (RSI was bullish oversold earlier this week, but not now.)
-On average, the size of up-moves has been smaller than the size of down-moves over the last month, but not enough to send a signal.
-Sentiment.
-VIX indicator.
-There were Distribution Days 9, 21 & 28 Feb, however, it’s only 3 since the last Follow-thru day.
-There have only been 3 Statistically-Significant days (big moves in price-volume) in the last 15-days.
-The short-term, 10-dayEMA, Fosback Hi-Low Logic Index is neutral.
-There was a Zweig Breadth Thrust 12 January. That’s a rare, very-bullish sign. - Expired
-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.
-The S&P 500 is 2.7% above its 200-dMA. (Bear indicator is 12% above the 200-day.)
-There was a Hindenburg Omen signal 8 April 2022 – 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.
-The Smart Money (late-day action) is neutral.
-52% of the 15-ETFs that I track have been up over the last 10-days. Neutral.
BEAR SIGNS
-The 10-dMA percentage of issues advancing on the NYSE (Breadth) is below 50%.
-MACD of S&P 500 price made a bearish crossover 10 Feb.
-McClellan Oscillator.
-The 5-10-20 Timer System is SELL; the 5-dEMA and 10-dEMA are both below the 20-dEMA.
-The 5-day EMA is below the 10-day EMA so short-term momentum is bearish.
On Friday, 21 February, 2 days after the top before the
Coronavirus pullback, there were 10 bear-signs and 1 bull-sign. Now there
are 5 bear-signs and 16-Bull. Last week, there were 11 bear-sign and 9
bull-signs.
In a good sign, the Friday rundown is much more bullish
than it has been for some time.
I remain bullish and heavily invested in stocks.
Today, the daily spread of 20 Indicators (Bulls minus
Bears) improved from -4 to +7 (a positive number is bullish; negatives are
bearish); the 10-day smoothed sum that smooths the daily fluctuations improved
from -5 to +2. (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, VOLUME, VIX & 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 remain a BULL, although somewhat more
cautious.
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
While their momentum values aren’t particularly strong, XLY & XLK were the best performers today.
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
FRIDAY 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.
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.
https://michaelpramirez.com/index.html
“Economic activity in the services sector expanded in February for the second consecutive month as the Services PMI® registered 55.1 percent...Business Survey Committee respondents indicated that they are mostly positive about business conditions. Suppliers continue to improve their capacity and logistics, as evidenced by faster deliveries. The employment picture has improved for some industries, despite the tight labor market. Several industries reported continued downsizing."
https://www.prnewswire.com/news-releases/services-pmi-at-55-1-february-2023-services-ism-report-on-business-301761637.html
-Friday the S&P 500 rose about 1.6% to 4046.
-VIX fell about 6% to 18.49.
-The yield on the 10-year Treasury rose to 4.062%.
-Drop from Top: 15.7% as of today. 25.4% max (on a closing basis).
-Trading Days since Top: 292-days.
The S&P 500 is 2.7% ABOVE its 200-dMA & 1.5% 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 – 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.
Thursday, there was a bullish Outside Reversal Day.
“Outside days are days where a security’s price is more volatile than the previous day. On an outside day, a security's price will reach a higher high and a lower low than the previous day. Outside days are a two-day price pattern; the difference between the open and close on the second day is larger than the first day when the open and close of the second day are outside the range of the first day.” From
https://www.investopedia.com/terms/o/outside-days.asp
It is bullish if the move is higher as it was yesterday. I don’t see this signal very often, but it seems to be a pretty good indicator. It occurred the day after the October bottom and again 6-days after that bottom. It is added to the bull list below.
The Friday rundown of indicators is a lot more bullish than last week (now 5-bear and 16-bull), but not far from neutral. (These indicators tend to be both long-term and short-term, so they are different than the 20 that I report on daily.)
-The smoothed advancing volume on the NYSE is rising.
-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%.
-2 March there was a Bullish Outside Reversal Day.
-MACD of the percentage of issues advancing on the NYSE (breadth) made a bullish crossover 3 March.
-Smoothed Buying Pressure minus Selling Pressure is rising.
-The smoothed advancing volume on the NYSE is rising.
-Slope of the 200-dMA is rising.
-My Money Trend indicator is rising.
-Long-term new-high/new-low data.
-Short-term new-high/new-low data.
-Slope of the 40-dMA of New-highs is rising.
-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. We have not seen a 90% down-volume day since the 2 up-volume days.
-The long-term, 50-dEMA, Fosback Hi-Low Logic Index is bullish.
-XLI-ETF (Cyclical Industrials) is outperforming the S&P 500.
-S&P 500 is outperforming Utilities (XLU-ETF).
-Bollinger Bands. (Very close to bullish.)
-Overbought/Oversold Index (Advance/Decline Ratio).
-Issues advancing on the NYSE (Breadth) compared to the S&P 500.
-There have been 4 up-days over the last 10 sessions – neutral.
-There have been 8 up-days over the last 20 sessions - neutral.
-The graph of the 100-day Count (the 100-day sum of up-days) is flat.
-RSI (RSI was bullish oversold earlier this week, but not now.)
-On average, the size of up-moves has been smaller than the size of down-moves over the last month, but not enough to send a signal.
-Sentiment.
-VIX indicator.
-There were Distribution Days 9, 21 & 28 Feb, however, it’s only 3 since the last Follow-thru day.
-There have only been 3 Statistically-Significant days (big moves in price-volume) in the last 15-days.
-The short-term, 10-dayEMA, Fosback Hi-Low Logic Index is neutral.
-There was a Zweig Breadth Thrust 12 January. That’s a rare, very-bullish sign. - Expired
-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.
-The S&P 500 is 2.7% above its 200-dMA. (Bear indicator is 12% above the 200-day.)
-There was a Hindenburg Omen signal 8 April 2022 – 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.
-The Smart Money (late-day action) is neutral.
-52% of the 15-ETFs that I track have been up over the last 10-days. Neutral.
-The 10-dMA percentage of issues advancing on the NYSE (Breadth) is below 50%.
-MACD of S&P 500 price made a bearish crossover 10 Feb.
-McClellan Oscillator.
-The 5-10-20 Timer System is SELL; the 5-dEMA and 10-dEMA are both below the 20-dEMA.
-The 5-day EMA is below the 10-day EMA so short-term momentum is bearish.
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
While their momentum values aren’t particularly strong, XLY & XLK were the best performers today.
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
