“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
EMPIRE STATE MANUFACTURING (NY Post)
“A key Empire State manufacturing index fell to its lowest level since the Great Recession — not including the pandemic — due to a decrease in orders, shipments, and payroll at factories, according to a survey conducted by the Federal Reserve Bank of New York. New York’s general business conditions index for May dropped to negative-31.8...” Story at...
https://nypost.com/2023/05/15/new-york-state-manufacturing-gauge-sinks-to-lowest-level-since-2009-ny-fed/
CORPORATE PROFIT MARGINS ARE STABILIZING (WSJ)
“A larger share of revenue at big U.S. companies is beginning to reach the bottom line, a potentially encouraging sign for a stock market that has been stuck in neutral in recent weeks. More than halfway through the first-quarter earnings season, the net profit margin of companies in the S&P 500 has ticked up to 11.5% from 11.3% in the fourth quarter...” Story at...
https://www.wsj.com/articles/corporate-profit-margins-are-finally-stabilizing-creating-new-tailwind-for-stocks-bbbdbcc4?mod=md_usstk_news
MARKET REPORT / ANALYSIS
-Monday the S&P 500 rose about 0.3% to 4136.
-VIX bucked the trend and rose about 0.5% to 17.12.
-The yield on the 10-year Treasury rose to 3.507%.
PULLBACK DATA:
-Drop from Top: 13.8%. 25.4% max (on a closing basis).
-Trading Days since Top: 342-days.
The S&P 500 is 4.1% ABOVE its 200-dMA and 1.9% 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 and we called a buy on 4 October 2022.
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.
BA – SOLD Boeing 5/10/2023. Boeing has more
business than they can handle. It was up 2% 5/15/2023. I’m already sorry I sold
it.
MSFT – Added Microsoft 5/10/2023.
XLK – Technology ETF.
XLE – Energy Sector ETF. XLE has been testing its March lows and recent 4 May low on lower volume so I continue to hold it.
XLY - Consumer Discretionary ETF.
KRE – Regional Banking ETF. This is a very small position
for me. KRE tested the May 4 low of 36.08 on much lower volume 11 & 12
May. Theoretically, that’s a bullish sign for KRE; it was up 3.2% today.
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:
The S&P 500 is outperforming the XLU-Utilities ETF. That’s a bullish sign and we can hope that the trend will continue.
Otherwise, there’s not much to say. We need to see more bullish action to convince investors the malaise is over.
The daily spread of 20 Indicators (Bulls minus Bears) declined
from zero to -2 (a positive number is bullish; negatives are bearish); the 10-day
smoothed sum that smooths the daily fluctuations declined from -14 to -15.
(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: PRICE & VIX are positive; SENTIMENT & 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.)
Price action has been a worry recently, the S&P 500
is not broken above its prior high of from 2 February. Indicators have been
flat, too. The Friday Summary of indicators remains Neutral, so I am not
planning to make changes to the portfolio now.
Bottom line: I remain 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
MONDAY 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.)
“A key Empire State manufacturing index fell to its lowest level since the Great Recession — not including the pandemic — due to a decrease in orders, shipments, and payroll at factories, according to a survey conducted by the Federal Reserve Bank of New York. New York’s general business conditions index for May dropped to negative-31.8...” Story at...
https://nypost.com/2023/05/15/new-york-state-manufacturing-gauge-sinks-to-lowest-level-since-2009-ny-fed/
“A larger share of revenue at big U.S. companies is beginning to reach the bottom line, a potentially encouraging sign for a stock market that has been stuck in neutral in recent weeks. More than halfway through the first-quarter earnings season, the net profit margin of companies in the S&P 500 has ticked up to 11.5% from 11.3% in the fourth quarter...” Story at...
https://www.wsj.com/articles/corporate-profit-margins-are-finally-stabilizing-creating-new-tailwind-for-stocks-bbbdbcc4?mod=md_usstk_news
-Monday the S&P 500 rose about 0.3% to 4136.
-VIX bucked the trend and rose about 0.5% to 17.12.
-The yield on the 10-year Treasury rose to 3.507%.
-Drop from Top: 13.8%. 25.4% max (on a closing basis).
-Trading Days since Top: 342-days.
The S&P 500 is 4.1% ABOVE its 200-dMA and 1.9% 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 and we called a buy on 4 October 2022.
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.
MSFT – Added Microsoft 5/10/2023.
XLK – Technology ETF.
XLE – Energy Sector ETF. XLE has been testing its March lows and recent 4 May low on lower volume so I continue to hold it.
XLY - Consumer Discretionary ETF.
The S&P 500 is outperforming the XLU-Utilities ETF. That’s a bullish sign and we can hope that the trend will continue.
Otherwise, there’s not much to say. We need to see more bullish action to convince investors the malaise is over.
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
MONDAY MARKET INTERNALS (NYSE DATA)
