Retail Sales ... Industrial Production ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

 
“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.

Political commentary at...
https://michaelpramirez.com/index.html
 
RETAIL SALES (CNN)
“Spending at US retailers rose in April following two months of declines, showing the US consumer is still fueling the economy. Retail sales, which are adjusted for seasonality but not for inflation, rose by 0.4% in April from the prior month...” Story at...
https://www.cnn.com/2023/05/16/business/retail-sales-april/index.html
 
INDUSTRIAL PRODUCTION (Sharecast)
“Industrial production in the States bounced back last month after two months of flat output, driven by a rebound in factory activity. According to the Department of Commerce, in seasonally adjusted terms, total production grew at a month-on-month clip of 0.5% (consensus: 0.4%).” Story at...
https://www.sharecast.com/news/international-economic/us-industrial-production-edges-past-forecasts-in-april-driven-by-manufacturing--13411842.html
 
WHY ARE WE STRICTER WITH TATTOOS THAN TRANSGENDER TREATMENT (WSJ)
“The Justice Department last month filed a lawsuit against Tennessee, challenging a state law that prohibits the provision of “gender-affirming medical care” to minors [including]...“gender-reassignment surgery” that alters a patient’s body to make it more like that of the opposite sex...The effects of such treatment are permanent, and the campaign to make it available to minors stands in startling contrast to the national consensus about another set of state laws. Those statutes protect children from expressing their identity by receiving a procedure that one federal circuit court held to be a “purely expressive activity fully protected by the First Amendment.” I refer to tattoos, which are far less invasive, less dangerous and less permanent than treatments that supposedly change a child’s sex... Many red states, blue states and the District of Columbia have absolute bans on permanent tattoos for children.” Story at... 
https://www.wsj.com/articles/why-are-we-stricter-with-tattoos-than-transgender-treatment-gender-affirming-ban-d5fbf8e5
 
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 declined about 0.6% to 4110.
-VIX rose about 5% to 17.99.
-The yield on the 10-year Treasury rose to 3.542%.
 
PULLBACK DATA:
-Drop from Top: 13.8%. 25.4% max (on a closing basis).
-Trading Days since Top: 343-days.
The S&P 500 is 3.4% ABOVE its 200-dMA and 1.2% 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 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 – 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.
 
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:

Ugly close Tuesday! Markets keep drifting sideways with a lot of back-and-forth movement in price. The S&P 500 is only 1.2% above its 50-dMA.  That remains an important price level to watch. When the Index has approached that level in the past, it has managed to move higher. As before, if it breaks the 50-dMA convincingly, I’ll be a seller of stocks and move to a more defensive position. Indicators still haven’t change much and are still generally neutral.
 
The daily spread of 20 Indicators (Bulls minus Bears) improved from -2 to zero (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations improved from -15 to -7. (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
 
TUESDAY MARKET INTERNALS (NYSE DATA)

My basket of Market Internals improved to 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.