“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
CONSUMER CONFIDENCE (The Hill)
“Consumer confidence fell to a 9-month low in April amid fears of a looming recession, according to a survey released by the Conference Board Tuesday. The business group’s closely watched consumer confidence index fell for the third time in four months and reached its lowest level since July 2022. The index fell from 104 in March to 101.3 in April.” Story at...
https://thehill.com/business/economy/3970868-consumer-confidence-falls-to-9-month-low/
NEW HOME SALES (CNN)
“New home sales rose in March, climbing for the fourth month in a row as mortgage rates eased and buyers looked to new construction as an alternative to the tight inventory of existing homes for sale.
Sales of newly constructed homes were up 9.6% in March from February, but were down 3.4% from a year ago
https://www.cnn.com/2023/04/25/homes/new-home-sales-march/index.html
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 fell about 1.6% to 4072.
-VIX rose about 11% to 18.76.
-The yield on the 10-year Treasury dipped to 3.402%.
PULLBACK DATA:
-Drop from Top: 15.1% as of today. 25.4% max (on a closing basis).
-Trading Days since Top: 328-days.
The S&P 500 is 2.8% ABOVE its 200-dMA and 0.9% 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.
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 has more work than they can handle and are
hiring. They should do well going forward; however, Boeing was downgraded
4/4/2023 based on fears that they will not be able to ramp up production to
meet demand. Thursday, 4/13/23, Boeing fell 5% after hours. “Boeing on Thursday
warned it will likely have to reduce deliveries of its 737 Max airplane in the
near term because of a problem with a part made by supplier Spirit AeroSystems.” From...
Boeing reports earnings 4/26/2023. The warnings are not encouraging.
XLY - Consumer Discretionary ETF.
KRE – Regional Banking ETF. This is a small position for me.
SHY – Short term bonds. 30-day yield is 4%. (Trailing 1-year yield is 1.6%.) I’ll hold this, but if the market retests the lows, I’ll sell it and buy stocks.)
TODAY’S COMMENT:
Today, there was a Bollinger Squeeze. Investopedia says, “When Bollinger Bands® are far apart, volatility is high. When they are close together, it is low. A Squeeze is triggered when volatility reaches a six-month low and is identified when Bollinger Bands® reach a six-month minimum distance apart.”
https://www.investopedia.com/terms/r/rsi.asp
A squeeze precedes a big breakout either up or down. Bollinger said to use RSI and a couple of other indicators I don’t follow to determine the direction of the breakout. RSI is 44 and is closer to oversold than overbought. Bollinger Bands are also close to “oversold” so it looks like the break out should be up. That would match the rising triangle pattern we have been following. It is a continuation pattern and the overall trend has been up, if we disregard the flat period the S&P 500 has been following recently.
S&P 500 is less than 1% above its 50-dMA. Since I am
still bullish, I expect the 50-dMA to hold.
If the S&P 500 drops lower, I may have to reconsider.
Today was a statistically significant down-day. That just
means that the price-volume move exceeded my statistical parameters. Statistics
show that a statistically-significant, down-day is followed by an up-day about
60% of the time.
There were some bear signs that popped up today. I’ll
follow them. It could be that I’ll need to get bearish, but so far, I feel that
bullish is still appropriate even though the short-term indicators were down.
Today, the daily spread of 20 Indicators (Bulls minus
Bears) improved from +1 to -9 (a positive number is bullish; negatives are
bearish); the 10-day smoothed sum that smooths the daily fluctuations declined
from zero to -11. (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 declined
to HOLD: PRICE is positive; SENTIMENT, VIX & VOLUME are neutral. At this
point, the Buy signal just means that the market is looking positive, so it can
indicate a Buy at tops. This indicator is designed to call turns in the market.
(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 cautious Bull, watching indicators as
always.
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
TUESDAY MARKET INTERNALS (NYSE
DATA)
My basket of Market Internals declined to 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.)
“Consumer confidence fell to a 9-month low in April amid fears of a looming recession, according to a survey released by the Conference Board Tuesday. The business group’s closely watched consumer confidence index fell for the third time in four months and reached its lowest level since July 2022. The index fell from 104 in March to 101.3 in April.” Story at...
https://thehill.com/business/economy/3970868-consumer-confidence-falls-to-9-month-low/
“New home sales rose in March, climbing for the fourth month in a row as mortgage rates eased and buyers looked to new construction as an alternative to the tight inventory of existing homes for sale.
Sales of newly constructed homes were up 9.6% in March from February, but were down 3.4% from a year ago
https://www.cnn.com/2023/04/25/homes/new-home-sales-march/index.html
-Tuesday the S&P 500 fell about 1.6% to 4072.
-VIX rose about 11% to 18.76.
-The yield on the 10-year Treasury dipped to 3.402%.
-Drop from Top: 15.1% as of today. 25.4% max (on a closing basis).
-Trading Days since Top: 328-days.
The S&P 500 is 2.8% ABOVE its 200-dMA and 0.9% 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.
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.
Boeing reports earnings 4/26/2023. The warnings are not encouraging.
KRE – Regional Banking ETF. This is a small position for me.
SHY – Short term bonds. 30-day yield is 4%. (Trailing 1-year yield is 1.6%.) I’ll hold this, but if the market retests the lows, I’ll sell it and buy stocks.)
Today, there was a Bollinger Squeeze. Investopedia says, “When Bollinger Bands® are far apart, volatility is high. When they are close together, it is low. A Squeeze is triggered when volatility reaches a six-month low and is identified when Bollinger Bands® reach a six-month minimum distance apart.”
https://www.investopedia.com/terms/r/rsi.asp
A squeeze precedes a big breakout either up or down. Bollinger said to use RSI and a couple of other indicators I don’t follow to determine the direction of the breakout. RSI is 44 and is closer to oversold than overbought. Bollinger Bands are also close to “oversold” so it looks like the break out should be up. That would match the rising triangle pattern we have been following. It is a continuation pattern and the overall trend has been up, if we disregard the flat period the S&P 500 has been following recently.
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:
For more details, see NTSM Page at…
https://navigatethestockmarket.blogspot.com/p/a-system-for-trading-dow-30-stocks-my_8.html
