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

Monday is Juneteenth, the new federal holiday, so no blog Monday – markets are closed.
 
“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
UNIV OF MICHIGAN SENTIMENT (Univ of Michigan)
“Consumer sentiment lifted 8% in June, reaching its highest level in four months, reflecting greater optimism as inflation eased and policymakers resolved the debt ceiling crisis. The outlook over the economy surged 28% over the short run and 14% over the long run. Sentiment is now 28% above the historic low from a year ago and may be resuming its upward trajectory since then. As it stands, though, sentiment remains low by historical standards as income expectations softened. A majority of consumers still expect difficult times in the economy over the next year.” Press release at...
http://www.sca.isr.umich.edu/
 
MARKET REPORT / ANALYSIS
-Friday the S&P 500 slipped about 0.4% to 4410.
-VIX fell about 7% to 13.54. (I can’t begin to explain that.)
-The yield on the 10-year Treasury rose to 3.769%.
 
PULLBACK DATA:
-Drop from Top: 8.1%. 25.4% max (on a closing basis).
-Trading Days since Top: 365-days.
The S&P 500 is 10.7% ABOVE its 200-dMA and 5.5% 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 - SOLD
MSFT – Microsoft.
“Microsoft shares climbed to a record Thursday after analysts at JPMorgan Chase touted the software maker’s growth prospects in artificial intelligence.” Story at...
https://www.cnbc.com/2023/06/15/microsoft-stock-hits-record-as-leaders-see-10-billion-in-ai-revenue.html
 
XLK – Technology ETF.
XLE – Energy Sector ETF. - SOLD
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:
Today was an options expiration day so volumes were extremely high. That can skew the daily results.  I still suspect that Thursday was a short-term top and we may see a 4-6% drop in the S&P 500 in the near term.

 
I trimmed some stocks in the morning (not much), but was pushed for time so I couldn’t post my moves as I made them. I sold IWM at a small profit and sold XLE at a 7% loss. XLE is irritating since I didn’t follow my own advice. Trade what you see, not what you think. I thought energy would recover faster than it has, while my momentum charts have consistently shown XLE in the tank this year.
 
Here’s my weekly review of indicators:
The weekly rundown of indicators remained to the Bull side (now 8-bear and 15-bull), but not quite as bullish as last week. (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
-The 10-dMA percentage of issues advancing on the NYSE (Breadth) is above 50%.
-The 50-dMA percentage of issues advancing on the NYSE (Breadth) is above 50%.
-The 100-dMA percentage of issues advancing on the NYSE (Breadth) is above 50%.
-MACD of S&P 500 price made a bullish crossover 26 May.
-Short-term new-high/new-low data.
-Long-term new-high/new-low data.
-The long-term, 50-dEMA, Fosback Hi-Low Logic Index.
-McClellan Oscillator.
-Slope of the 40-dMA of New-highs is rising.
-On average, the size of up-moves has been larger than the size of down-moves over the last month.
-The graph of the 100-day Count (the 100-day sum of up-days) is up.
-The 5-10-20 Timer System is BUY.
-The 5-day EMA is above the 10-day EMA so short-term momentum is bullish.
-S&P 500 spread vs. Utilities (XLU-ETF) shows the Index outpacing Utilities.
-56% of the 15-ETFs that I track have been up over the last 10-days.
 
NEUTRAL
-There has been 2 Distribution Days since the Follow-thru day on 2 June.
-There have been 3 Statistically-Significant days (big moves in price-volume) in the last 15-days.
-Sentiment.
-Bollinger Band Squeeze 28 April - expired.
-Bollinger Bands. They were overbought yesterday.
-The 50-dMA percentage of issues advancing on the NYSE (Breadth) has not been below 50%, for more than 3 days in a row.
-Overbought/Oversold Index (Advance/Decline Ratio).
-There was a Zweig Breadth Thrust 31 March. That’s a rare, very-bullish sign, but the McClellan Oscillator subsequently turned negative, so this indicator has expired.
-The S&P 500 is 10.7% above its 200-dMA. (Bear indicator is 12% above the 200-day.) It was 11.1% above the 200-day yesterday.
-The short-term, 10-day EMA, Fosback Hi-Low Logic Index is neutral.
-There have been 7 up-days over the last 10 sessions – neutral.
-There have been 13 up-days over the last 20 sessions - neutral.
-VIX indicator.
-There was a 90% down-volume day 9 March.
-There was a Hindenburg Omen signal 3 May 2023. The McClellan Oscillator turned positive 18 May. – Expired.
-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.
-10 May there was a Bullish Outside Reversal Day – Expired.
 
BEAR SIGNS
-The smoothed advancing volume on the NYSE is falling.
-MACD of the percentage of issues advancing on the NYSE (breadth) made a bearish crossover 12 June.
-Issues advancing on the NYSE (Breadth) compared to the S&P 500. The Index is too far ahead of Breadth.
-Smoothed Buying Pressure minus Selling Pressure is falling.
-My Money Trend indicator is falling.
-RSI
-The Smart Money (late-day action) is down.
-XLI-ETF (Cyclical Industrials) is underperforming the S&P 500 and the trend direction is down.
 
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 8 bear-signs and 15-Bull. Last week, there were 2 bear-sign and 18 bull-signs.
 
The daily spread of 20 Indicators (Bulls minus Bears) slipped from +5 to -1 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations declined from +65 to +59. (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 indicator can signal a “Buy” at the top because it is designed to call a buy when conditions become good at a bottom; but conditions are good at tops too. Since I think the S&P 500 was at a short-term top Friday, this may not be the best time to buy.
 
(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 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 HOLD. (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 70% stocks, including stock mutual funds and ETFs. I’m usually about 50% invested in stocks. I’ll may cut back some more next week to reduce risk.
 
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.