“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
“While all parties have a responsibility to negotiate in
good faith, recent actions make clear to me that the Biden administration is
determined to pursue an ideological agenda rather than confront the clear and
present danger that debts and deficits pose to our nation. Our national debt
stands at nearly $31.5 trillion, or close to $95,000 for every man, woman and
child, and represents 120% of our gross domestic product... When President
Biden and I spoke before Congress passed the Inflation Reduction Act last
summer, we agreed that the bill was designed to pay down our national debt and
shore up America’s energy security...Yet instead of implementing the law as
intended, unelected ideologues, bureaucrats and appointees seem determined to
violate and subvert the law to advance a partisan agenda that ignores both
energy and fiscal security. Specifically, they are ignoring the law’s intent to
support and expand fossil energy and are redefining “domestic energy” to
increase clean-energy spending to potentially deficit-breaking levels.” –
Senator Joe Manchin, Democrat from West Virginia. WSJ Op Ed at...
https://www.wsj.com/articles/biden-inflation-reduction-act-betrayal-joe-manchin-debt-ceiling-budget-fossil-fuels-green-energy-dc37738e?mod=hp_opin_pos_5
PCE PRICES (YahooFinance)
“The personal consumption expenditures (PCE) price index increased 0.3% last month after accelerating 0.6% in January...The core PCE price index rose 4.6% year-on-year after gaining 4.7% in January.
https://finance.yahoo.com/news/instant-view-us-feb-pce-131358404.html
Numbers indicate falling inflation, albeit slowly.
PERSONAL SPENDING / INCOME (CNBC)
“Consumers spent less in December even as an inflation measure considered key by the Federal Reserve showed the pace of price increases easing, the Commerce Department reported Friday...consumer spending was even less than already modest estimates, indicating that the economy slowed at the end of 2022 and contributing to expectations for a 2023 recession. Spending adjusted for inflation declined 0.2% on the month, worse than the 0.1% drop that Wall Street had been anticipating. Personal income increased 0.2% for the month, as expected.” Story at...
https://www.cnbc.com/2023/01/27/pce-inflation-december-2022-.html
CHICAGO PMI (Morningstar)
“The Chicago Business Barometer, also known as the Chicago PMI, inched up 0.2 index points to 43.8 in March. It was the first increase since December. The increase was unexpected. Economists polled by the Wall Street Journal forecast a 43 reading.” Story at...
https://www.morningstar.com/news/marketwatch/20230331417/chicago-business-activity-index-remains-in-contractionary-territory-for-seventh-straight-month-in-march
A number below 50 indicates contraction.
MARKET REPORT / ANALYSIS
-Friday the S&P 500 rose about 1.4% to 4109.
-VIX slipped about 1% to 18.82.
-The yield on the 10-year Treasury slipped to 3.471%.
PULLBACK DATA:
-Drop from Top: 14.3% as of today. 25.4% max (on a closing basis).
-Trading Days since Top: 312-days.
The S&P 500 is 4.4% ABOVE its 200-dMA and 2.2% 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:
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 earnings 4/26/2023.
XLY - Consumer Discretionary ETF.
KRE – Regional Banking ETF. 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.)
TODAY’S COMMENT:
There was a Zweig Breadth Thrust today, Friday. This signals a rapid rise in breadth over a short period of time. It is a rare, and very bullish indicator. Like all indicators, it is not always right. Now though, bullish looks like the place to be.
Here’s this week’s Friday review of Indicators:
The Friday rundown of indicators jumped to the Bullish side (now 6-bear and 19-bull). (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
-There was a Follow-thru Day 3/31 that cancels prior Distribution Days.
-The smoothed advancing volume on the NYSE is rising.
-The 10-dMA percentage of issues advancing on the NYSE (Breadth) is above 50%.
-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%.
-There was a Zweig Breadth Thrust 31 March. That’s a rare, very-bullish sign.
-Slope of the 200-dMA is rising.
-The 52-week, New-high/new-low ratio improved by 3.5 standard deviations 27 March.
-Smoothed Buying Pressure minus Selling Pressure is rising.
-MACD of S&P 500 price made a bullish crossover 21 March.
-My Money Trend indicator is rising.
-Short-term new-high/new-low data.
-McClellan Oscillator.
-The long-term, 50-dEMA, Fosback Hi-Low Logic Index is bullish.
-The graph of the 100-day Count (the 100-day sum of up-days) is rising.
-The 5-10-20 Timer System is BUY; the 5-dEMA and 10-dEMA are both above the 20-dEMA.
-The 5-day EMA is above the 10-day EMA so short-term momentum is bullish.
-The Smart Money (late-day action) is bullish.
-73% of the 15-ETFs that I track have been up over the last 10-days – bullish.
NEUTRAL
-There have been 4 Statistically-Significant days (big moves in price-volume) in the last 15-days.
-Sentiment.
-Issues advancing on the NYSE (Breadth) compared to the S&P 500.
-9 March there was a Bearish Outside Reversal Day – expired.
-There have been 8 up-days over the last 10 sessions – leaning bearish, but neutral.
-There have been 12 up-days over the last 20 sessions - neutral.
-RSI
-There was a 90% down-volume day 9 March. Another one will push this into the Bear category.
-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.
-The 50-dMA percentage of issues advancing on the NYSE (Breadth) has not been below 50%, for 3 days in a row – neutral.
-The Calm-before-the-Storm/Panic Indicator flashed a panic-buying signal 10 November - expired.
-The short-term, 10-dayEMA, Fosback Hi-Low Logic Index is neutral.
-VIX indicator.
-The S&P 500 is 4.4% 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
-S&P 500 is outperforming Utilities (XLU-ETF), but the spread is small so let’s call it neutral.
BEAR SIGNS
-Overbought/Oversold Index (Advance/Decline Ratio). – overbought.
-MACD of the percentage of issues advancing on the NYSE (breadth) made a bearish crossover 9 March.
-Long-term new-high/new-low data.
-Slope of the 40-dMA of New-highs is falling.
-XLI-ETF (Cyclical Industrials) is underperforming the S&P 500.
-Bollinger Bands are overbought.
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 6 bear-signs and 19-Bull. Last week, there were 13 bear-sign and 8
bull-signs.
Today, the daily spread of 20 Indicators (Bulls minus
Bears) improved from +5 to +7 (a positive number is bullish; negatives are
bearish); the 10-day smoothed sum that smooths the daily fluctuations improved
from +6 to +21. (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 BUY:
VOLUME is positive; SENTIMENT, VIX & PRICE are neutral. The Breadth Thrust
today pushes this indicator to BUY.
(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 Bull. We’ve seen some very bullish signs
recently, confirmed by the Friday Rundown of Indicators.
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 improved to BUY. (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://www.wsj.com/articles/biden-inflation-reduction-act-betrayal-joe-manchin-debt-ceiling-budget-fossil-fuels-green-energy-dc37738e?mod=hp_opin_pos_5
“The personal consumption expenditures (PCE) price index increased 0.3% last month after accelerating 0.6% in January...The core PCE price index rose 4.6% year-on-year after gaining 4.7% in January.
https://finance.yahoo.com/news/instant-view-us-feb-pce-131358404.html
Numbers indicate falling inflation, albeit slowly.
“Consumers spent less in December even as an inflation measure considered key by the Federal Reserve showed the pace of price increases easing, the Commerce Department reported Friday...consumer spending was even less than already modest estimates, indicating that the economy slowed at the end of 2022 and contributing to expectations for a 2023 recession. Spending adjusted for inflation declined 0.2% on the month, worse than the 0.1% drop that Wall Street had been anticipating. Personal income increased 0.2% for the month, as expected.” Story at...
https://www.cnbc.com/2023/01/27/pce-inflation-december-2022-.html
“The Chicago Business Barometer, also known as the Chicago PMI, inched up 0.2 index points to 43.8 in March. It was the first increase since December. The increase was unexpected. Economists polled by the Wall Street Journal forecast a 43 reading.” Story at...
https://www.morningstar.com/news/marketwatch/20230331417/chicago-business-activity-index-remains-in-contractionary-territory-for-seventh-straight-month-in-march
A number below 50 indicates contraction.
-Friday the S&P 500 rose about 1.4% to 4109.
-VIX slipped about 1% to 18.82.
-The yield on the 10-year Treasury slipped to 3.471%.
-Drop from Top: 14.3% as of today. 25.4% max (on a closing basis).
-Trading Days since Top: 312-days.
The S&P 500 is 4.4% ABOVE its 200-dMA and 2.2% 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.
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 earnings 4/26/2023.
XLY - Consumer Discretionary ETF.
KRE – Regional Banking ETF. This is a small position for me. I have no cash left.
There was a Zweig Breadth Thrust today, Friday. This signals a rapid rise in breadth over a short period of time. It is a rare, and very bullish indicator. Like all indicators, it is not always right. Now though, bullish looks like the place to be.
The Friday rundown of indicators jumped to the Bullish side (now 6-bear and 19-bull). (These indicators tend to be both long-term and short-term, so they are different than the 20 that I report on daily.)
-There was a Follow-thru Day 3/31 that cancels prior Distribution Days.
-The smoothed advancing volume on the NYSE is rising.
-The 10-dMA percentage of issues advancing on the NYSE (Breadth) is above 50%.
-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%.
-There was a Zweig Breadth Thrust 31 March. That’s a rare, very-bullish sign.
-Slope of the 200-dMA is rising.
-The 52-week, New-high/new-low ratio improved by 3.5 standard deviations 27 March.
-Smoothed Buying Pressure minus Selling Pressure is rising.
-MACD of S&P 500 price made a bullish crossover 21 March.
-My Money Trend indicator is rising.
-Short-term new-high/new-low data.
-McClellan Oscillator.
-The long-term, 50-dEMA, Fosback Hi-Low Logic Index is bullish.
-The graph of the 100-day Count (the 100-day sum of up-days) is rising.
-The 5-10-20 Timer System is BUY; the 5-dEMA and 10-dEMA are both above the 20-dEMA.
-The 5-day EMA is above the 10-day EMA so short-term momentum is bullish.
-The Smart Money (late-day action) is bullish.
-73% of the 15-ETFs that I track have been up over the last 10-days – bullish.
-There have been 4 Statistically-Significant days (big moves in price-volume) in the last 15-days.
-Sentiment.
-Issues advancing on the NYSE (Breadth) compared to the S&P 500.
-9 March there was a Bearish Outside Reversal Day – expired.
-There have been 8 up-days over the last 10 sessions – leaning bearish, but neutral.
-There have been 12 up-days over the last 20 sessions - neutral.
-RSI
-There was a 90% down-volume day 9 March. Another one will push this into the Bear category.
-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.
-The 50-dMA percentage of issues advancing on the NYSE (Breadth) has not been below 50%, for 3 days in a row – neutral.
-The Calm-before-the-Storm/Panic Indicator flashed a panic-buying signal 10 November - expired.
-The short-term, 10-dayEMA, Fosback Hi-Low Logic Index is neutral.
-VIX indicator.
-The S&P 500 is 4.4% 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
-S&P 500 is outperforming Utilities (XLU-ETF), but the spread is small so let’s call it neutral.
-Overbought/Oversold Index (Advance/Decline Ratio). – overbought.
-MACD of the percentage of issues advancing on the NYSE (breadth) made a bearish crossover 9 March.
-Long-term new-high/new-low data.
-Slope of the 40-dMA of New-highs is falling.
-XLI-ETF (Cyclical Industrials) is underperforming the S&P 500.
-Bollinger Bands are overbought.
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 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
