Michigan Sentiment ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

 
“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
“...if the FOMC is done raising the federal funds rate for the time being, history says the S&P 500 will climb nearly 15% in the next 12 months.” Story at...
The Fed Signals a Rate Hike Pause: History Says The Stock Market Will Do This Next (msn.com)
 
UNIV OF MICHIGAN SENTIENT (Univ of Michigan)
“Consumer sentiment tumbled 9% amid renewed concerns about the trajectory of the economy, erasing over half of the gains achieved after the all-time historic low from last June. While current incoming macroeconomic data show no sign of recession, consumers’ worries about the economy escalated in May alongside the proliferation of negative news about the economy, including the debt crisis standoff. Year-ahead expectations for the economy plummeted 23% from last month.” Press release at... 
http://www.sca.isr.umich.edu/
 
MARKET REPORT / ANALYSIS
-Friday the S&P 500 dipped about 0.2% to 4124.
-VIX rose about 0.6% to 17.03.
-The yield on the 10-year Treasury rose to 3.468%.
 
PULLBACK DATA:
-Drop from Top: 14%. 25.4% max (on a closing basis).
-Trading Days since Top: 341-days.
The S&P 500 is 3.8% ABOVE its 200-dMA and 1.6% 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. I’ll buy this back before long.
MSFT – Added Microsoft 5/10/2023.
XLK – Technology ETF.
XLE – Energy Sector ETF. It been sagging recently on lower oil prices. 
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 today. Theoretically, that’s a bullish sign for KRE, but this type of volume analysis is less reliable than when analyzing Indices.
 
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:
Here’s my weekly review of indicators:
The weekly rundown of indicators was close to neutral last week and remained there (now 10-bear and 10-bull). (These indicators tend to be both long-term and short-term, so they are different than the 20 that I report on daily.) 
 
BULL SIGNS
-Smoothed Buying Pressure minus Selling Pressure is rising.
-The 100-dMA percentage of issues advancing on the NYSE (Breadth) is above 50%.
-MACD of the percentage of issues advancing on the NYSE (breadth) made a bullish crossover 19 April.
-Long-term new-high/new-low data.
-On average, the size of up-moves has been larger than the size of down-moves over the last month.
-VIX indicator.
-The 5-10-20 Timer System is BUY.
-Slope of the 40-dMA of New-highs is rising.
-10 May there was a Bullish Outside Reversal Day.
-The 5-day EMA is above the 10-day EMA so short-term momentum is bullish.
 
NEUTRAL
-The graph of the 100-day Count (the 100-day sum of up-days) is flat.
-There have only been 3 Distribution Days since the last Distribution Day.
-There have been 5 Statistically-Significant days (big moves in price-volume) in the last 15-days. It is not clear that we are at a top or bottom so I’ll put this in the neutral column.
-Sentiment.
-Bollinger Bands.
-Overbought/Oversold Index (Advance/Decline Ratio).
-Bollinger Band Squeeze 28 April - expired.
-Issues advancing on the NYSE (Breadth) compared to the S&P 500.
-My Money Trend indicator is flat.
-The long-term, 50-dEMA, Fosback Hi-Low Logic Index is neutral.
-The short-term, 10-day EMA, Fosback Hi-Low Logic Index is neutral.
-There have been 3 up-days over the last 10 sessions – neutral.
-There have been 8 up-days over the last 20 sessions - neutral.
-The S&P 500 is 3.8% above its 200-dMA. (Bear indicator is 12% above the 200-day.)
-There was a Zweig Breadth Thrust 31 March. That’s a rare, very-bullish sign, but the McClellan Oscillator turned negative, so this indicator has expired.
-RSI
-The Smart Money (late-day action) is mixed.
-There was a 90% down-volume day 9 March. Another one will push this into the Bear category.
-The Calm-before-the-Storm/Panic Indicator flashed a panic-buying signal 10 November - expired.
-2.8% of all issues traded on the NYSE made new, 52-week highs when the S&P 500 made a new all-time-high, 3 January 2022. (There is no bullish signal for this indicator.) This indicated that the advance was too narrow and a correction was likely to be >10%. It proved correct, but is now Expired.
-S&P 500 vs. Utilities (XLU-ETF) – close to bullish, but neutral.
 
BEAR SIGNS
-The 10-dMA percentage of issues advancing on the NYSE (Breadth) is below 50%.
-The 50-dMA percentage of issues advancing on the NYSE (Breadth) is below 50%.
-The 50-dMA percentage of issues advancing on the NYSE (Breadth) has been below 50%, for more than 3 days in a row – bearish.
-The smoothed advancing volume on the NYSE is falling.
-MACD of S&P 500 price made a bearish crossover 25 April.
-Short-term new-high/new-low data.
-McClellan Oscillator.
-There was a Hindenburg Omen signal 3 May 2023. (Good for 30-days or until McClellan Oscillator turns positive.)
-XLI-ETF (Cyclical Industrials) is underperforming the S&P 500.
-33% of the 15-ETFs that I track have been up over the last 10-days.
 
On Friday, 21 February, 2 days after the top before the Coronavirus pullback, there were 10 bear-signs and 1 bull-sign. Now there are 10 bear-signs and 10-Bull. Last week, there were 12 bear-sign and 10 bull-signs.
 
The daily spread of 20 Indicators (Bulls minus Bears) improved from -1 to Zero (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations declined from -12 to -14. (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
 
FRIDAY MARKET INTERNALS (NYSE DATA)

My basket of Market Internals slipped 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.) 
 

...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.