“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
PAYROLL REPORT / UNEMPLOYMENT RATE / AVG EARNINGS / AVG
WORKWEEK (CNBC)
“Payrolls in the public and private sector increased by 339,000 for the month, better than the 190,000 Dow Jones estimate and marking the 29th straight month of positive job growth. The unemployment rate rose to 3.7% in May... On an annual basis, wages increased 4.3%, which was 0.1 percentage point below the estimate. The average workweek fell by 0.1 hour to 34.3 hours...” Story at...
https://www.cnbc.com/2023/06/02/jobs-report-may-2023-.html
MARKET REPORT / ANALYSIS
-Friday the S&P 500 rose about 1.5% to 4282.
-VIX fell about 7% to 14.6.
-The yield on the 10-year Treasury rose to 3.699%.
PULLBACK DATA:
-Drop from Top: 10.7%. 25.4% max (on a closing basis).
-Trading Days since Top: 355-days.
The S&P 500 is 7.7% ABOVE its 200-dMA and 3.9% 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.
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:
Breadth improved today. We see it in the improvement in the 10-dMA of issues advancing on the NYSE and also in the Russell 2000. The Russel was the big index winner today, up over 3.5%. That’s a good sign.
On the negative side, top indicators are close to issuing
a top-warning. This isn’t necessarily a
major top. In fact, we can argue confidently it’s not a major top or we wouldn’t
see so many bullish indicators. What it does suggest is that the S&P 500
may be due for a 3-5% pullback. My guess is that it would happen when the RSI
joins the other top-indicators and the Index has reached or exceeded its upper
trend-line. That might be in the range of 4400-4500. It shouldn’t be a big
deal. Retracements of 3-5% happen all
the time and timing short-term moves is a losing game for the most part so
there’s no action to take now.
Here’s my weekly review of indicators:
The weekly rundown of indicators jumped strongly to the Bull side (now 2-bear and 21-bull). (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
-June was a Follow Thru day that cancels prior 2 Distribution Days
-The smoothed advancing volume on the NYSE is rising.
-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 the percentage of issues advancing on the NYSE (breadth) made a bullish crossover 19 May.
-Smoothed Buying Pressure minus Selling Pressure is rising.
-MACD of S&P 500 price made a bullish crossover 26 May.
-My Money Trend indicator is rising.
-Short-term new-high/new-low data.
-Long-term new-high/new-low data.
-McClellan Oscillator.
-Slope of the 40-dMA of New-highs is rising.
-The graph of the 100-day Count (the 100-day sum of up-days) is moving higher.
-The Smart Money (late-day action).
-On average, the size of up-moves has been larger than the size of down-moves over the last month.
-VIX indicator.
-XLI-ETF (Cyclical Industrials) is underperforming the S&P 500, but the trend direction is now up - Bullish.
-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).
NEUTRAL
-There have been 4 Statistically-Significant days (big moves in price-volume) in the last 15-days.
-Sentiment.
-The 50-dMA percentage of issues advancing on the NYSE (Breadth) has not been below 50%, for more than 3 days in a row.
-Bollinger Band Squeeze 28 April - expired.
-Overbought/Oversold Index (Advance/Decline Ratio).
-The long-term, 50-dEMA, Fosback Hi-Low Logic Index is neutral.
-The short-term, 10-day EMA, Fosback Hi-Low Logic Index is neutral.
-There have been 6 up-days over the last 10 sessions – neutral.
-There have been 12 up-days over the last 20 sessions - neutral.
-RSI
-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 S&P 500 is 7.7% above its 200-dMA. (Bear indicator is 12% above the 200-day.)
-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 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.
-45% of the 15-ETFs that I track have been up over the last 10-days.
BEAR SIGNS
-Bollinger Bands are overbought.
-Issues advancing on the NYSE (Breadth) compared to the S&P 500. The Index is too far ahead of Breadth.
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 2 bear-signs and 21-Bull. Last week, there were 7 bear-sign and 13
bull-signs.
This is bullish enough that I plan to add to stock
holdings next week; buying on Monday may work out to be a better deal.
Today was a statistically significant up-day. That just means
that the price-volume move exceeded my statistical parameters. Statistics show
that a statistically-significant, up-day is followed by a down-day about 60% of
the time so I may get an opportunity to increase stock holdings on Monday.
The daily spread of 20 Indicators (Bulls minus Bears) improved
from -5 to +5 (a positive number is bullish; negatives are bearish); the 10-day
smoothed sum that smooths the daily fluctuations declined from -28 to -30.
(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 improved
to 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.)
Bottom line: I remain a Bull and I’ll add to stock
holdings next week unless there are more top-signs. If so, I’ll hold off a
little for a better buy point.
ETF - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily)
ETF ranking follows:
“Payrolls in the public and private sector increased by 339,000 for the month, better than the 190,000 Dow Jones estimate and marking the 29th straight month of positive job growth. The unemployment rate rose to 3.7% in May... On an annual basis, wages increased 4.3%, which was 0.1 percentage point below the estimate. The average workweek fell by 0.1 hour to 34.3 hours...” Story at...
https://www.cnbc.com/2023/06/02/jobs-report-may-2023-.html
-Friday the S&P 500 rose about 1.5% to 4282.
-VIX fell about 7% to 14.6.
-The yield on the 10-year Treasury rose to 3.699%.
-Drop from Top: 10.7%. 25.4% max (on a closing basis).
-Trading Days since Top: 355-days.
The S&P 500 is 7.7% ABOVE its 200-dMA and 3.9% 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.
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.
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.
Breadth improved today. We see it in the improvement in the 10-dMA of issues advancing on the NYSE and also in the Russell 2000. The Russel was the big index winner today, up over 3.5%. That’s a good sign.
The weekly rundown of indicators jumped strongly to the Bull side (now 2-bear and 21-bull). (These indicators tend to be both long-term and short-term, so they are different than the 20 that I report on daily.)
-June was a Follow Thru day that cancels prior 2 Distribution Days
-The smoothed advancing volume on the NYSE is rising.
-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 the percentage of issues advancing on the NYSE (breadth) made a bullish crossover 19 May.
-Smoothed Buying Pressure minus Selling Pressure is rising.
-MACD of S&P 500 price made a bullish crossover 26 May.
-My Money Trend indicator is rising.
-Short-term new-high/new-low data.
-Long-term new-high/new-low data.
-McClellan Oscillator.
-Slope of the 40-dMA of New-highs is rising.
-The graph of the 100-day Count (the 100-day sum of up-days) is moving higher.
-The Smart Money (late-day action).
-On average, the size of up-moves has been larger than the size of down-moves over the last month.
-VIX indicator.
-XLI-ETF (Cyclical Industrials) is underperforming the S&P 500, but the trend direction is now up - Bullish.
-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).
-There have been 4 Statistically-Significant days (big moves in price-volume) in the last 15-days.
-Sentiment.
-The 50-dMA percentage of issues advancing on the NYSE (Breadth) has not been below 50%, for more than 3 days in a row.
-Bollinger Band Squeeze 28 April - expired.
-Overbought/Oversold Index (Advance/Decline Ratio).
-The long-term, 50-dEMA, Fosback Hi-Low Logic Index is neutral.
-The short-term, 10-day EMA, Fosback Hi-Low Logic Index is neutral.
-There have been 6 up-days over the last 10 sessions – neutral.
-There have been 12 up-days over the last 20 sessions - neutral.
-RSI
-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 S&P 500 is 7.7% above its 200-dMA. (Bear indicator is 12% above the 200-day.)
-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 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.
-45% of the 15-ETFs that I track have been up over the last 10-days.
-Bollinger Bands are overbought.
-Issues advancing on the NYSE (Breadth) compared to the S&P 500. The Index is too far ahead of Breadth.
TODAY’S RANKING OF 15 ETFs (Ranked Daily)
ETF ranking follows:
*For additional background on the ETF ranking system see NTSM Page at…
http://navigatethestockmarket.blogspot.com/p/exchange-traded-funds-etf-ranking.html
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)
