Payroll Report ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

 

Political commentary by Michael Ramirez at...
https://michaelpramirez.com/index.html
 
“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
“Webster’s Dictionary defines a useful idiot as a “naive or credulous person who can be manipulated or exploited to advance a cause or political agenda.” Today’s make-believe democracies are overflowing with useful idiots. They latch on to one lame-brained notion after another, perhaps to give meaning to their confused and pointless lives. They’re a bit like cats chasing the red dot from their master’s laser pointer. The Ukraine, Covid, sex perversions, Trump, racism, climate change—it’s one thing after another.” - Doug Casey, American writer, speculator, and the founder and chairman of Casey Research.
 
PAYROLL REPORT / UNEMPLOYMENT RATE / AVG HOURLY EARNINGS
“-Nonfarm payrolls rose by 311,000 in February, above the 225,000 Dow Jones estimate.
-The unemployment rate increased to 3.6%, above expectations.
-Average hourly earnings climbed 4.6% from a year ago, less than expected, in a positive sign for inflation.” Story at...
https://www.cnbc.com/2023/03/10/jobs-report-february-2023.html
 
MARKET REPORT / ANALYSIS
-Friday the S&P 500 fell about 1.5% to 3862.
-VIX rose about 10% to 24.8.
-The yield on the 10-year Treasury dipped to 3.705%.
 
PULLBACK DATA:
-Drop from Top: 19.5% as of today. 25.4% max (on a closing basis).
-Trading Days since Top: 297-days.
The S&P 500 is 2% BELOW its 200-dMA & 3.5% 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:
As noted earlier today, my “Bottom Indicator” was +7 around mid-day and that’s where it ended for the day. +7 is a bullish number. It was +6 at the October low. Unfortunately, there are no perfect signals so there is no guarantee that this call will be correct.
 
If today turns out not to be the bottom, i.e., there is selling Monday, I’ll sell some issues in the trading portfolio. The S&P 500 closed below its 200-dA on consecutive days and that is usually taken as a trend reversal. We’ll see.
 
Here’s this week’s Friday review of Indicators:
The Friday rundown of indicators flipped to the bear side this week (now 14-bear and 10-bull), but not all that 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 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%.
-Smoothed Buying Pressure minus Selling Pressure is rising.
-The graph of the 100-day Count (the 100-day sum of up-days) is rising.
-XLI-ETF (Cyclical Industrials) is outperforming the S&P 500.
-The long-term, 50-dEMA, Fosback Hi-Low Logic Index is bullish.
-Bollinger Bands.
-Issues advancing on the NYSE (Breadth) compared to the S&P 500.
-RSI.
-There have been 5 Statistically-Significant days (big moves in price-volume) in the last 15-days. This one can be hard to interpret, but since it occurred at a low point, I’ll put it in the bullish column for now. (If the S&P 500 was at the top of its upper trend line, I’d call it bearish.)
 
NEUTRAL
-There have been 5 Distribution Days since the last Follow-thru day. – Almost bearish, but still Neutral
-Overbought/Oversold Index (Advance/Decline Ratio). 
-There was a 90% down-volume day 9. Another one will push this into the Bear category.
-There have been 5 up-days over the last 10 sessions – neutral.
-There have been 9 up-days over the last 20 sessions - neutral.
-The Smart Money (late-day action) is neutral.
-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.
-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% below its 200-dMA. (Bull indicator is 12% below 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.
-S&P 500 is outperforming Utilities (XLU-ETF), but the spread is narrowing so let’s call it neutral.
 
BEAR SIGNS
-The 10-dMA percentage of issues advancing on the NYSE (Breadth) is below 50%.
-The smoothed advancing volume on the NYSE is falling.
-MACD of the percentage of issues advancing on the NYSE (breadth) made a bearish crossover 9 March.
-9 March there was a Bearish Outside Reversal Day.
-MACD of S&P 500 price made a bearish crossover 10 Feb.
-My Money Trend indicator is falling.
-Slope of the 200-dMA is falling.
-Long-term new-high/new-low data.
-Short-term new-high/new-low data.
-Slope of the 40-dMA of New-highs is falling.
-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.
-McClellan Oscillator.
-41% of the 15-ETFs that I track have been up over the last 10-days. 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 14 bear-signs and 10-Bull. Last week, there were 5 bear-sign and 16 bull-signs.
 
Today, the daily spread of 20 Indicators (Bulls minus Bears) improved from -6 to -3 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations declined from +7 to +4. (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: VOLUME is bearish; PRICE, 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 am neutral now and I’ll sell some issues in the trading portfolio if Monday is a down day.
 
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
 
FRIDAY MARKET INTERNALS (NYSE DATA)

My basket of Market Internals remained SELL. (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 above the 200-dMA Friday.
 
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.