NAVIGATE THE STOCK MARKET FOCUSES ON:
(1) Daily momentum analysis of the DOW 30 stocks and 15 ETFs across various market sectors.
(2) Stock Market commentary and analysis.
(3) Buy/Sell signals for major market turns.
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Wednesday, May 31, 2023
FED Beige Book ... Chicago PMI ... JOLTS – Job Opening s ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...
“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire. FED BEIGE BOOK (fxstreet) “According to Federal Reserve’s Beige Book, “economic
activity was little changed overall in April and early May”. The expectations
for future growth deteriorated a little, “though contacts still largely
expected a further expansion in activity...Prices rose moderately over
the reporting period, though the rate of increase slowed in many Districts.”
Story at... https://www.fxstreet.com/news/feds-beige-book-economic-activity-was-little-changed-overall-in-april-and-early-may-202305311807 CHICAGO PMI (Advisor Perspectives) “The latest Chicago Purchasing Manager's Index (Chicago Business
Barometer) regressed to 40.4 in May from 48.6 in April. This is the ninth
straight month in contraction territory. This reading comes in below the
forecast of 47.0.”
Chart and commentary at... https://www.advisorperspectives.com/dshort/updates/2023/05/31/chicago-pmi-regresses-to-six-month-low?topic=covid-19-coronavirus-coverage JOLTS – JOB OPENINGS (YahooFinance) The latest Job Opening and Labor Turnover Survey, or
JOLTs report, released Wednesday revealed 10.1 million job openings at
the end of April, an increase from the 9.8 million in job openings reported in
March... Oxford Economics wrote in a note on Wednesday. "While
there are some concerns over the veracity of the JOLTS survey due to
historically low response rates, the upshot remains that labor market strength
remains robust.” Story at... https://finance.yahoo.com/news/job-openings-show-surprise-increase-in-april-142039924.html MARKET REPORT / ANALYSIS -Wednesday the S&P 500 dipped about 0.6% to 4180. -VIX rose about 3% to 17.94. -The yield on the 10-year Treasury slipped to 3.647%. PULLBACK DATA: -Drop from Top: 12.9%. 25.4% max (on a closing basis). -Trading Days since Top: 353-days. The S&P 500 is 5.1% ABOVE its 200-dMA and 1.7%
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. MSFT – Microsoft. XLK – Technology ETF. XLE – Energy Sector ETF. XLE tested its March low on 16
May 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. 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: Utilities/S&P 500 spread over the longer term is
still bullish, however, today utilities outperformed the S&P 500 by a lot. It’s
a trend to watch, but it is not telling us much now. The S&P 500 has been drifting down and is now only
1.7% above its 50-dMA.I’ll get worried
if it breaks below it. Today, (Wednesday) unchanged volume was very high. As I’ve
often said, many believe that this indicator suggests investor confusion at
market turning points. The S&P 500 has been trending higher for about 2
months, but not very strongly. It hasn’t gone anywhere in the last month, so it’s
hard to determine the current trend. With the Debt Ceiling Debacle ongoing, it
may just be indicating investor confusion. The Long Term NTSM ensemble remains
hold and the most recent Friday summary of indicators was 13 Bull to 7 Bear,
suggesting that the appropriate action at this point is to wait and see. The daily spread of 20 Indicators (Bulls minus Bears) improved
from -6 to -3 (a positive number is bullish; negatives are bearish); the 10-day
smoothed sum that smooths the daily fluctuations declined from -18 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
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 remain a 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:
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.
