Jobless Claims ... New Home Sales ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

 
“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
TWO SCHOOL ADMINISTRATORS SHOT BY STUDENT IN DENVER (CBSNews)
“A 17-year-old student shot and wounded two administrators at his high school in Denver on Wednesday, and the victims were taken to area hospitals, officials said. Denver Police Chief Ron Thomas said the student fled the scene after the shooting at East High School.” Story at...
https://www.cbsnews.com/news/denver-shooting-east-high-school/
Why? Part of the answer goes back to 2020...
 
DENVER PHASES OUT POLICE RESOURCE OFFICERS IN SCHOOLS – Dec 2020 (ChalkBeat)
“Board member Tay Anderson, who helped shepherd the resolution to remove police from schools...said, ‘after witnessing time after time again the insurmountable and disgusting treatment of Black Americans and people of color across this country at the hands of law enforcement, this is our opportunity to say we as a district must change the way we practice discipline.’... In addition to eliminating school resource officers, the school board resolution directed the superintendent to work with community members to craft a district policy that ensures students will no longer be ticketed, arrested, or referred to law enforcement ‘unless there are no other available alternatives for addressing imminent threats of serious harm.’” Story at...
https://co.chalkbeat.org/2020/12/15/22177144/denver-phase-out-police-3-schools
My cmt: The article went on to say that black students are disproportionately ticketed and arrested. By that logic the NBA is the most racist organization in America – white men are vastly, and disproportionately, under-represented in the league. But that’s not really the question.  The question should always be, are people treated differently because of their color when committing similar crimes...or in the case of the NBA...when demonstrating similar skills. 
 
JOBLESS CLAIMS (YahooFinance)
“Initial Jobless Claims ratcheted down further below the psychological 200K per week to 191K, 7000 claims fewer than expected and 1000 fewer than the previous week’s unrevised 192K. In fact, aside from an outlier first week of March which reported new jobless claims of 212K, we haven’t seen figures at 200K or higher since the very first weeks of the year.” Story at...
https://finance.yahoo.com/news/jobless-claims-come-lower-145702862.html
 
NEW HOME SALES (FoxBusiness)
“New single-family home purchases rose 1.1% to a seasonally adjusted annual rate of 640,000 units, the Department of Commerce reported Thursday. Economists surveyed by Refinitiv expected new home sales – which account for a small percentage of total sales – to fall 3% last month.” Story at...
https://www.foxbusiness.com/economy/new-home-sales-rise-february-third-month-row
 
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 rose about 0.3% to 3950.
-VIX rose about 2% to 22.61.
-The yield on the 10-year Treasury slipped to 3.422%.
 
PULLBACK DATA:
-Drop from Top: 17.7% as of today. 25.4% max (on a closing basis).
-Trading Days since Top: 306-days.
The S&P 500 is 0.4% ABOVE its 200-dMA & 1.6% 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:
Market Internals were weak today. New-lows are increasing; Down-volume outpaced up-volume; Declining stocks were twice advancing stocks. It’s surprising to see a positive close for the S&P 500. Breadth is also deteriorating. The 50-dMA of Issues advancing on the NYSE slipped below 50%, meaning less than half of the issue have been up over the last 50-trading sessions. That’s a worrisome sign. When the 50-day is below 50% for three days straight, it is a “correction now” signal in my system. Longer-term breadth values are falling too. The 100-dMA of Issues advancing on the NYSE is now at 50.9% and the 150-dMA already is below 50%.
 
We have the Banking issues which I have been ignoring, since they’ve been backstopped by the Fed.  The other issue, that I have been late to recognize, is that weakening financial positions will mean less lending and lower profits for the banks.  I guess the good news for the regional banks (KRE-EFT) is that they are already trading close to book value according to some on CNBC.
 
The Friday run-down of indicators, when I report on indicators from the bull-bear perspective, will be very important for me. As I noted above, Breadth is deteriorating and there is a new worry on the horizon.  If the US bans Tik-Tok, and it looks like we’re going to do it, it could lead to a trade war if China retaliates. This issue may already be bothering the markets.
 
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 improved from -45 to -41. (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 not by enough to make me comfortable. Now we have Breadth falling.
 
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
 
THURSDAY 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.