FED rate Decision ... PPI ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...
“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
"On political corruption, we are going to restore
honor to our government. In my administration, I am going to enforce all laws concerning
the protection of classified information. No one will be above the law," -
Donald Trump, during his campaign rally in Charlotte, North Carolina, on August
18, 2016.
My cmt: It occurred to me that this quote from Trump might
be fake, but, it’s real. That is really what he said as fact checked by Snopes
and CNN.
“When your own handpicked AG calls your conduct reckless
and totally wrong, then you know you’re in trouble. This is what happens when
you keep top secret government documents in a spare bathroom at your country
club.” – Chris Christie, former Republican Governor of NJ
FOMC RATE DECISION (CNBC)
“The Federal Reserve on Wednesday decided against what
would have been an 11th consecutive interest rate increase as it measures what
the impacts have been from the previous 10. But the decision by the Federal
Open Market Committee to hold off on a hike at this two-day meeting came with
a projection
that another two quarter percentage point moves are on the way before
the end of the year.” Story at...
https://www.cnbc.com/2023/06/14/fed-rate-decision-june-2023.html
The next meeting is July 25-26.
PPI (CNN)
“US inflation at the wholesale level has cooled once again,
this time landing well below its pre-pandemic average.
The Producer Price Index showed that annual price
increases seen by producers measured 1.1% for the 12 months ended in May,
easing sharply from the 2.3% bump recorded in April...” Story at...
https://www.cnn.com/2023/06/14/economy/ppi-inflation-may/index.html
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 rose about 0.1% to 4373.
-VIX declined about 5% to 13.88. (One would think that
VIX would have been higher if today’s action presaged a big correction.)
-The yield on the 10-year Treasury was little changed at
3.802%.
PULLBACK DATA:
-Drop from Top: 8.8%. 25.4% max (on a closing basis).
-Trading Days since Top: 363-days.
The S&P 500 is 9.9% ABOVE its 200-dMA and 4.9%
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.
IWM – Russell 2000.
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 5.04% - 9 June
2023. (Trailing 1-year yield is 3.04%.) I’ll hold this, but if the market
retests the lows, I’ll sell it and buy stocks.)
TODAY’S COMMENT:
Markets were higher going into the Fed announcement of a
rate hike pause, but fell after Powell suggested the Fed may resume hiking
later. Odds were greater than 50% that the FED would raise rates again at their
July meeting, so Powell’s comments of possible future hikes were not that big a
surprise. That doesn’t mean the markets liked the news – they didn’t, but
stocks recovered late in the day and finished mixed.
Still, some were encouraged by the today’s PPI news that
came out before the Fed meeting ended: Chris Rupkey economist
at FwdBonds wrote in a research note today, “We can’t keep getting inflation
data like this and maintain inflation is out of control. Inflation is
moderating, that’s the bottom line, and that means Fed officials can take the
summer off from the spate of rate hikes delivered at every meeting since last
March.” If Chris is right, the news will be better further down
the road.
There are still signs of a short-term top. 8 of the last
10-days have been up days for the S&P 500.
RSI was overbought today, too. We’re due for some downside, but as is
frequently the case, it’s not clear cut. One of my top-indicators flashed buy
today. The 50-day EMA Fosback High-Low indicator says now is the time to buy,
not sell. How can we interpret that?! Let’s just say the short-term top may
have been further postponed.
The daily spread of 20 Indicators (Bulls minus Bears) remained
+7 (a positive number is bullish; negatives are bearish); the 10-day smoothed
sum that smooths the daily fluctuations improved from +45 to +55. (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 & VOLUME are positive; SENTIMENT & VIX 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:
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
WEDNESDAY MARKET INTERNALS
(NYSE DATA)
My basket of Market Internals remained BUY. (My basket of Market
Internals is 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 75% 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.
