Jobless Claims ... ISM Non-Manufacturing Index ... JOLTS ... Crude Oil Inventories ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

 
“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
ADP EMPLOYMENT CHANGE (ADP via PR Newswire)
“Private employers added 497,000 jobs in June
Job creation surged in June, led by consumer-facing services. Leisure and hospitality, trade and transportation, and education and health services showed strong gains. Still, the market was fragmented, with manufacturing, information, and finance showing declines.” Press release at...
https://www.prnewswire.com/news-releases/adp-national-employment-report-private-sector-employment-increased-by-497-000-jobs-in-june-annual-pay-was-up-6-4-301871086.html
 
JOBLESS CLAIMS (Yahoo Finance)
“The number of Americans filing new claims for unemployment benefits increased moderately last week, pointing to only a gradual easing in labor market conditions.
Initial claims for state unemployment benefits rose 12,000 to a seasonally adjusted 248,000 for the week ended July 1...” Story at...
https://finance.yahoo.com/news/us-weekly-jobless-claims-rise-124623086.html
 
ISM NON-MANUFACTURING INDEX (PR Newswire)
“Economic activity in the services sector expanded in June for the sixth consecutive month as the Services PMI® registered 53.9 percent, say the nation's purchasing and supply executives in the latest Services ISM® Report On Business®. The sector has grown in 36 of the last 37 months, with the lone contraction in December of last year.” Story at...
https://www.prnewswire.com/news-releases/services-pmi-at-53-9-june-2023-services-ism-report-on-business-301870344.html
 
JOLTS JOB OPENINGS (CNN)
“The number of available jobs in the United States dropped in May after an uptick the month before, the Bureau of Labor Statistics reported Thursday. Job openings fell to 9.82 million at the end of May, dropping from an upwardly revised 10.3 million in April, according to the BLS’ latest Job Openings and Labor Turnover Survey report.” Story at...
https://www.cnn.com/2023/07/06/economy/jolts-job-openings-may/index.html
 
CRUDE OIL INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 1.5 million barrels from the previous week. At 452.2 million barrels, U.S. crude oil inventories are approximately 1% below the five year average for this time of year.” Report at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf
 
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 dropped about 0.8% to 4412.
-VIX rose about 9% to 15.44.
-The yield on the 10-year Treasury rose to 4.051%.
 
PULLBACK DATA:
-Drop from Top: 8%. 25.4% max (on a closing basis).
-Trading Days since Top: 377-days.
The S&P 500 is 10% 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.
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 haven’t sold yet. On the positive side, it has not breached its recent low around 36.
 
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 expectation was that private employers would add 220,000 jobs. Today’s ADP report was more than twice that value, a stunning high in job creation.  This report was concerning for the markets (according to many) because it is not the direction desired by the FED and may give them impetus to hike rates. That’s possible, but we have been suggesting a pullback for a week or two so today could simply be a sign of that pullback. It doesn’t really matter. As noted yesterday, there is not much change in my view – I’m expecting a small, normal retreat of 4-5%.
 
The pundits were all about how a rise above 4% in the 10-year yield would be a disaster for stocks. It hasn’t been that long ago when the same pundits said a rise above 3% would spell disaster for stocks, so I won’t worry too much. Instead, I’ll wait for Mr. Market to give us more clues.
 
The daily spread of 20 Indicators (Bulls minus Bears) slipped from +3 to -6 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations declined from -20 to -21. (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 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, still expecting a decline of around 4-5% on the S&P 500 to start soon.
 
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 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 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.