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

 
“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
UNIV OF MICHIGAN SENTIMENT (Univ f Michigan)
“Consumer sentiment slipped for the fourth straight month, falling 5% in November. While current and expected personal finances both improved modestly this month, the long-run economic outlook slid 12%, in part due to growing concerns about the negative effects of high interest rates. Ongoing wars in Gaza and Ukraine weighed on many consumers as well. Overall, lower-income consumers and younger consumers exhibited the strongest declines in sentiment. In contrast, sentiment of the top tercile of stock holders improved 10%, reflecting the recent strengthening in equity markets.” Press release at...
http://www.sca.isr.umich.edu/
 
ELECTRIC CAR DRIVERS SHOULD PAY FOR ROAD DAMAGE (The Telegraph {the Brits have a road problem})
“...the truth is that the battle against potholes is having to be fought against ever-heavier vehicles. This is partly down to the popularity of SUVs and the decision to allow heavier lorries on the road without doing much to make the roads fit for them. But another big part of it is electric cars, which are having to drag around huge, dense batteries wherever they go. Some electric SUVs are now pushing three tonnes. Even a tiny Renault Zoe weighs in at 1.6 tonnes. By contrast, a 1970s Cortina – a more than adequate family car of the day – weighed just over a tonne.
It is hardly surprising, then, that our roads can’t cope. 
Electric car drivers should pay for the damage they’re doing to our roads (msn.com)
 
MARKET REPORT / ANALYSIS
-Friday the S&P 500 rose about 1.6% to 4415.
-VIX fell about 7% to 14.17.
-The yield on the 10-year Treasury rose to 4.646%.
 
PULLBACK DATA:
-Drop from Top: 7.9%. 25.4% max (on a closing basis).
-Trading Days since All-Time Top: 467-days.
The S&P 500 is 3.7% ABOVE its 200-dMA and 1.8% ABOVE its 50-dMA.
*I won’t call the correction over until the S&P 500 makes a new-high; however, evidence suggests the major bear-market bottom (25% decline) was in the 3600 area and we called a buy on 4 October 2022.
 
MY TRADING POSITIONS:
XLK – Technology ETF (holding since the October 2022 lows).
XLY - Consumer Discretionary ETF. (Holding since the October 2022 lows - I bought more XLY Monday, 8/21.)
I took profits and then reestablished positions as follows:
SPY – I bought a large position in the S&P 500 Friday, 8/14, in my 401k (it has limited choices).
XLE – Added Tuesday, 8/22.
SSO – 2x S&P 500 ETF. Added 8/24.
CSCO – added 9/5.
 
TODAY’S COMMENT:
We look at a summary of indicators on Friday. (These indicators tend to be both long-term and short-term, so they are different than the 20 that I report on daily.) The weekly rundown of indicators made a sharp u-turn to the Bull side last week, and remained bullish this week: now 6-bear and 18-bull.
 
BULL SIGNS
-There was a Follow-thru Day 10 November. This cancels all Distribution Days/
-There have been 6 Statistically-Significant days (big moves in price-volume) in the last 15-days. Coming off the bottom, this reinforces bullishness.
-The smoothed advancing volume on the NYSE is rising.
-The 10-dMA percentage of issues advancing on the NYSE (Breadth) is below 50%.
-MACD of the percentage of issues advancing on the NYSE (breadth) made a bullish crossover 12 October.
-Smoothed Buying Pressure minus Selling Pressure.
-MACD of S&P 500 price made a bullish crossover 2 Nov.
-My Money Trend indicator is rising.
-Short-term new-high/new-low data.
-McClellan Oscillator.
-The graph of the 100-day Count (the 100-day sum of up-days).
-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.
-There were back-to-back, high up-volume days (80%+) on the NYSE 2 & 3 Nov.
-The 5-day EMA is above the 10-day EMA, so short-term momentum is bullish.
-The 5-10-20 Timer System is BUY.
-69% of the 15-ETFs that I track have been up over the last 10-days. (45-55% is neutral.)
-S&P 500 spread vs. Utilities (XLU-ETF) turned sharply and has been headed in a bullish direction for the last 8 days.
 
NEUTRAL
-Sentiment.
-Bollinger Band Squeeze 28 April - expired.
-Bollinger Bands.
-Overbought/Oversold Index (Advance/Decline Ratio).
-Issues advancing on the NYSE (Breadth) compared to the S&P 500.
-9 November there was a Bearish Outside Reversal Day. Since the McClellan Oscillator is bullish, I’ll call tis one neutral.
-There was a New-high/New-low spread reversal on 4 October (based on std deviation of spread). The spread doesn’t have to turn positive for this indicator to be bullish, it just has to improve a lot. - Expired
-The S&P 500 is 3.7% above its 200-dMA. (Bear indicator is 12% above the 200-day.)
-Slope of the 40-dMA of New-highs is flat.
-The short-term, 10-day EMA, Fosback Hi-Low Logic Index.
-The long-term, 50-dEMA, Fosback Hi-Low Logic Index.
-There were Hindenburg Omen signals 11 & 12 Sept 2023 – expired. The McClellan Oscillator turned positive.
-There have been 11 up-days over the last 20 sessions.
-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 top warning signal 15 Sept., but it may well have been a bottom signal. - Expired
-RSI.
-VIX indicator.
-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.
 
BEAR SIGNS
-The 50-dMA percentage of issues advancing on the NYSE (Breadth) is below 50%
-The 100-dMA percentage of issues advancing on the NYSE (Breadth) is below 50%
-The 50-dMA percentage of issues advancing on the NYSE (Breadth) has been below 50%, for more than 3 days in a row.
-Long-term new-high/new-low data.
-There have been 9 up-days over the last 10 sessions.
-XLI-ETF (Cyclical Industrials) vs the S&P 500.
 
On Monday’s update of the Friday summary of indicators (20 December 2021), 9 days before the top of the current 25% correction, there were 21 bear-signs and zero bull-signs. Now there are 6 bear-signs and 18-Bull. Last week, there were 4 bear-sign and 8 bull-signs.
 
Indicators are confirming what we have suspected all week – correction over The bottom WAS last Friday.
 
The daily spread of 20 Indicators (Bulls minus Bears) improved from +4 to +6 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations improved from +31 to +46. (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 slipped to HOLD: PRICE, & VOLUME are bullish; VIX & SENTIMENT are neutral.
 
(The important major BUY in this indicator was on 21 October 2022, 7-days after the bear-market 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 21 December, 9 sessions before the high of this recent bear market, based on the bearish “Friday Rundown” of indicators.)
 
BOTTOM LINE
I remain bullish.
 
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 improved to BUY. (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 75% stocks, including stock mutual funds and ETFs. I’m usually about 50% invested in stocks. I’m “over invested” now expecting new, all-time highs this year. That burns all the cash.  I have about 25% of the portfolio in bonds.
 
I trade about 15-20% of the total portfolio using the momentum-based analysis I provide here. When I see a definitive bottom, I add a lot more stocks to the portfolio using an S&P 500 ETF as I did back in October.