Jobless Claims ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...
“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
"The corrupt Biden Administration has informed my
attorneys that I have been Indicted...I AM AN INNOCENT MAN!" – Former President
Donald Trump responding to his indictment for the classified documents
obstruction at Mara Lago.
JOBLESS CLAIMS (CNBC)
“First-time jobless claims rose sharply last week in a
potential sign that the labor market is softening up after more than a year of
interest rate hikes. Initial filings for unemployment benefits totaled a
seasonally adjusted 261,000 for the week ended June 3.. Markets are expecting
the Fed to skip a rate hike at the two-day meeting that concludes Wednesday.” Story
at...
https://www.cnbc.com/2023/06/08/jobless-claims-increase-more-than-expected-to-their-highest-since-october-2021.html
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 rose about 0.6% to 4294.
-VIX dipped about 2% to 13.65.
-The yield on the 10-year Treasury slipped to 3.720%.
PULLBACK DATA:
-Drop from Top: 10.5%. 25.4% max (on a closing basis).
-Trading Days since Top: 359-days.
The S&P 500 is 8% ABOVE its 200-dMA and 3.6% 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.
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 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 below chart shows the big divergence between the
Nasdaq Composite (top curve), the S&P 500 (middle curve) and the Russell
2000 on the bottom since the October lows. It’s probably hard to read, but the
Russell is underperforming the Nasdaq Composite by 16.5% in the last 8 months
or so. That sort of underperformance doesn’t last forever. In addition, usually
after a major market bottom the Russell outperforms; that didn’t happen after
the October low. I think the move in the Russell that occurred this week will
continue. I already own the momentum leaders (XLK, XLY & SPY) so I added
IWM today.
The daily spread of 20 Indicators (Bulls minus Bears) remained
+8 again (a positive number is bullish; negatives are bearish); the 10-day
smoothed sum that smooths the daily fluctuations improved from -14 to +3.
(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 & VIX are positive; SENTIMENT is 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
THURSDAY MARKET INTERNALS
(NYSE DATA)
My basket of Market Internals remained BUY. (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 65-70% 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.
