“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
FOMC MINUTES (Reuters)
“The minutes showed a committee forced by the failures of Silicon Valley Bank and Signature Bank into an unexpectedly complex debate, but ultimately moving forward with higher interest rates... Policymakers at the March meeting did weaken their commitment to further rate hikes, dropping the stated need for "ongoing increases" from the policy statement in favor of saying only that "some further" tightening would likely be needed.” Story at...
https://www.reuters.com/markets/us/fed-minutes-detail-debate-wake-svb-signature-bank-failures-2023-04-12/
FED EXPECTS RECESSION THIS YEAR (CNBC)
“Given their assessment of the potential economic effects of the recent banking-sector developments, the staff’s projection at the time of the March meeting included a mild recession starting later this year, with a recovery over the subsequent two years,” the meeting summary said.” Story at...
https://www.cnbc.com/2023/04/12/fed-expects-banking-crisis-to-cause-a-recession-this-year-minutes-show.html
CPI / CORE CPI (CNN)
"Annual inflation, as measured by the Consumer Price Index, dropped in March for the ninth consecutive month. And for the first time since September 2020, grocery prices fell on a monthly basis. Prices rose 5% for the 12 months ended in March, down from 6% in February...core CPI grew 0.4% for the month, resulting in a 5.6% annual growth rate. In February, core CPI accelerated 0.5% month on month and 5.5% year over year.” Story at...
https://www.cnn.com/2023/04/12/economy/cpi-inflation-march/index.html
CRUDE OIL INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 0.6 million barrels from the previous week. At 470.5 million barrels, U.S. crude oil inventories are about 3% above the five year average for this time of year.” Report at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf
ENERGY OUTLOOK – FORECAST OVERVIEW (EIA)
“Crude oil prices. The Brent crude oil spot price in our forecast averages $85 per barrel (b) in 2023, up $2/b from last month’s forecast. The higher price forecast reflects a forecast for less global production in 2023 and a relatively unchanged outlook for global oil consumption. Despite our higher price forecast, recent issues in the banking sector raise the potential that economic and oil demand growth will be lower than our forecast, which has the potential to result in lower oil prices.” Report at...
https://www.eia.gov/outlooks/steo/
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 slipped about 0.4% to 4092.
-VIX was little changed at 19.09.
-The yield on the 10-year Treasury slipped to 3.394%.
PULLBACK DATA:
-Drop from Top: 14.3% as of today. 25.4% max (on a closing basis).
-Trading Days since Top: 319-days.
The S&P 500 is 3.7% ABOVE its 200-dMA and 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:
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) 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. Boeing was downgraded 4/4/2023 based on fears that they will not be able to ramp up production to meet demand.
XLY - Consumer Discretionary ETF.
KRE – Regional Banking ETF. This is a small position for me.
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:
I saw a bearish version of the below S&P 500 chart not long ago. If one draws the chart from the top in August (incorrectly, I think) there is no breakout. Looking at the chart from the prior all-time high, it remains bullish. The Index broke above the trend line in January; tested the trend line in March and has moved up since then. The bullish breakout is still intact.
Today, the daily spread of 20 Indicators (Bulls minus
Bears) improved from +2 to +4 (a positive number is bullish; negatives are
bearish); the 10-day smoothed sum that smooths the daily fluctuations declined
from +49 to +47. (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
BUY: VOLUME & PRICE are positive; SENTIMENT & VIX 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, but I’ll be watching
indicators as always. More recession
talk is in the works, even from the fed, so we need to pay attention to how the
markets react. Futures are lower as I write this, but not drastically so.
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:
For more details, see NTSM Page at…
https://navigatethestockmarket.blogspot.com/p/a-system-for-trading-dow-30-stocks-my_8.html
WEDNESDAY 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 65% 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.
“The minutes showed a committee forced by the failures of Silicon Valley Bank and Signature Bank into an unexpectedly complex debate, but ultimately moving forward with higher interest rates... Policymakers at the March meeting did weaken their commitment to further rate hikes, dropping the stated need for "ongoing increases" from the policy statement in favor of saying only that "some further" tightening would likely be needed.” Story at...
https://www.reuters.com/markets/us/fed-minutes-detail-debate-wake-svb-signature-bank-failures-2023-04-12/
“Given their assessment of the potential economic effects of the recent banking-sector developments, the staff’s projection at the time of the March meeting included a mild recession starting later this year, with a recovery over the subsequent two years,” the meeting summary said.” Story at...
https://www.cnbc.com/2023/04/12/fed-expects-banking-crisis-to-cause-a-recession-this-year-minutes-show.html
"Annual inflation, as measured by the Consumer Price Index, dropped in March for the ninth consecutive month. And for the first time since September 2020, grocery prices fell on a monthly basis. Prices rose 5% for the 12 months ended in March, down from 6% in February...core CPI grew 0.4% for the month, resulting in a 5.6% annual growth rate. In February, core CPI accelerated 0.5% month on month and 5.5% year over year.” Story at...
https://www.cnn.com/2023/04/12/economy/cpi-inflation-march/index.html
“U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 0.6 million barrels from the previous week. At 470.5 million barrels, U.S. crude oil inventories are about 3% above the five year average for this time of year.” Report at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf
“Crude oil prices. The Brent crude oil spot price in our forecast averages $85 per barrel (b) in 2023, up $2/b from last month’s forecast. The higher price forecast reflects a forecast for less global production in 2023 and a relatively unchanged outlook for global oil consumption. Despite our higher price forecast, recent issues in the banking sector raise the potential that economic and oil demand growth will be lower than our forecast, which has the potential to result in lower oil prices.” Report at...
https://www.eia.gov/outlooks/steo/
-Wednesday the S&P 500 slipped about 0.4% to 4092.
-VIX was little changed at 19.09.
-The yield on the 10-year Treasury slipped to 3.394%.
-Drop from Top: 14.3% as of today. 25.4% max (on a closing basis).
-Trading Days since Top: 319-days.
The S&P 500 is 3.7% ABOVE its 200-dMA and 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.
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) 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. Boeing was downgraded 4/4/2023 based on fears that they will not be able to ramp up production to meet demand.
XLY - Consumer Discretionary ETF.
KRE – Regional Banking ETF. This is a small position for me.
I saw a bearish version of the below S&P 500 chart not long ago. If one draws the chart from the top in August (incorrectly, I think) there is no breakout. Looking at the chart from the prior all-time high, it remains bullish. The Index broke above the trend line in January; tested the trend line in March and has moved up since then. The bullish breakout is still intact.
ETF - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily)
ETF ranking follows:
*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
