Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...
“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
“As math and reading scores plummet, perhaps public
education should focus on teaching fundamentals.” - Michael Ramirez.
“...the demand from figures like former Sen. Claire McCaskill
(D-Mo.) for people to “back off” on the story [by whistleblowers that there was
interference in the Hunter Biden investigation] is being heeded by some in the
media, in again blacking out or downplaying the story. While many of us have
stressed the need to authenticate these statements, Hunter Biden has notably
not denied that he sent the message and the allegations from the investigation
have self-verifying elements. The news blackout again raises concerns over
a de facto state media in the United States that operates by
consent rather than coercion. This is a major story either way it turns out but
networks and newspapers are again showing a distinct lack of curiosity.”
Jonathon Turley.
https://jonathanturley.org/2023/06/24/everybody-needs-to-back-off-the-media-and-political-figures-continue-to-ignore-the-biden-corruption-scandal/
CASS FREIGHT INDEX (CASS Information Systems)
“The shipments component of the Cass Freight Index® rose
1.9% m/m in May, but fell 0.8% m/m in seasonally adjusted (SA) terms and fell
5.6% y/y. While it was a softer-than-normal seasonal increase from April, it
was nonetheless an increase.
Freight markets continue to work through a downcycle
which featured its first y/y decline 17 months ago. The past three downcycles
have ranged from 21 to 28 months.
Declining real retail sales trends and ongoing destocking
remain the primary headwinds to freight volumes, but dynamics are shifting as
real incomes improve and the worst of the destock is in the rearview.”
https://www.cassinfo.com/freight-audit-payment/cass-transportation-indexes/may-2023
Freight doesn’t seem to support the recession call that
many pundits continue to make. This
could change, of course, but for now, recession is not in sight.
BEARISH TREND PLAYING OUT (Heritage Capital)
“I do not believe the bull market has ended. Let’s get
that out of the way. I don’t even think this phase of the rally has ended. As
we all know, the stock market has seen a really nice move over the past month,
especially in the NASDAQ 100. No secrets there. This looks to me like a normal,
healthy and telegraphed mild pullback. And one that I would be a buyer of for
another run to new highs in early July.” - Paul Schatz, President Heritage
Capital. Commentary at...
https://investfortomorrow.com/blog/bearish-trend-playing-out-bonds-need-to-shape-up/
MARKET REPORT / ANALYSIS
-Monday the S&P 500 dropped about 0.5% to 4329.
-VIX rose about 6% to 14.25.
-The yield on the 10-year Treasury dipped to 3.724%.
PULLBACK DATA:
-Drop from Top: 9.8%. 25.4% max (on a closing basis).
-Trading Days since Top: 370-days.
The S&P 500 is 8.4% ABOVE its 200-dMA and 2.9%
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.
MSFT – Microsoft.
XLK – Technology ETF.
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.
I said earlier that I’ll probably sell this position – it has been
very weak recently. But I forgot to and I haven't sold yet - in my defense, it is a small
position.
SHY – Short term bonds. 30-day yield is 5.04% - 9 June
2023. (Trailing 1-year yield is 3.04%.) Once this weak period ends, I’ll sell
SHY and buy stocks/stock ETFs.
TODAY’S COMMENT:
The close wasn’t pretty (late-day, sell-off) and a couple
of other bear signs popped up, too.
MACD (Moving Average Convergence Divergence) switched to a
bear signal today. The 50-dMA of issues advancing on the NYSE has been down for
more than 3 sessions. That’s my
definition of a correction. Ok, but I still don’t expect a large pullback.
Repeating: While my Friday summary of indicators last Friday was well
to the Bear side, some of the bull indicators are reasonably reliable. This tends to bolster the view that the
current pullback is likely to be small. The markets do not appear to be
starting a major correction, so I’ll stick with my suggestion that the S&P
500 is most likely to decline about 2-3% below today’s close. I’d be surprised if the Index drops below its
50-dMA, but it certainly could happen.
The daily spread of 20 Indicators (Bulls minus Bears) declined
from -8 to -9 (a positive number is bullish; negatives are bearish); the 10-day
smoothed sum that smooths the daily fluctuations declined 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 declined
to HOLD: PRICE is positive; SENTIMENT, VIX & 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.)
Bottom line: I remain a cautious Bull, expecting a
decline of another 2-3% on the S&P 500.
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
MONDAY MARKET INTERNALS (NYSE
DATA)
My basket of Market
Internals remained SELL. (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 55% 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.
