GDP ... Jobless Claims ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis

 

“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
GDP (NY Times)
“Gross domestic product, adjusted for inflation, rose at a 1.1 percent annual rate in the first quarter, according to preliminary data released by the Commerce Department on Thursday. That was down from a 2.6 percent rate in the last three months of 2022...” Story at...
https://www.nytimes.com/2023/04/27/business/economy/gdp-q1-economy.html
 
JOBLESS CLAIMS (AP News)
“Applications for unemployment benefits in the U.S. fell last week as the labor market continues to show strength despite some weakness in other parts of the economy. The number of Americans filing for jobless claims for the week ending April 22 fell by 16,000 to 230,000, the Labor Department reported Thursday.” Story at...
https://apnews.com/article/unemployment-benefits-jobless-claims-layoffs-2491e013fc787764dde2d37f08ce7f26
 
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 rose about 2% to 4135.
-VIX fell about 10% to 17.03.
-The yield on the 10-year Treasury rose to 3.525%.
 
PULLBACK DATA:
-Drop from Top: 15.4% as of today. 25.4% max (on a closing basis).
-Trading Days since Top: 330-days.
The S&P 500 is 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.
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 reported 4/26/2023 had good numbers and gave good guidance. 
 
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:
Thursday, there is still a Bollinger Squeeze. A squeeze precedes a big breakout either up or down. RSI is 53, a neutral reading. Bollinger Bands are now closer to “overbought” so it looks like the break out direction is a toss-up.
 
It’s always tempting to buy more stock when it looks like markets are improving.  Both price and Internals were good today and it feels like there is a more positive attitude with the tech sector improving.  I don’t see it in the indicators yet.  They are a bit more bearish, but probably not much different than they were Friday, so I am not in a rush to reset my 2x leveraged positions.
 
The Friday summary of indicators will be interesting. 
 
Today was a statistically significant up-day. That just means that the price-volume move exceeded my statistical parameters. Statistics show that a statistically-significant, up-day is followed by a down-day about 60% of the time. 
 
If Friday is another big up-day, it would be a bullish sign that might entice me to add to my stock positions.
 
Today, the daily spread of 20 Indicators (Bulls minus Bears) improved from -8 to -7 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations declined from -23 to -30. (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: PRICE is positive; SENTIMENT, VIX & VOLUME 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 cautious Bull.
 
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 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 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.