ADP Employment ... Crude 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 (CNBC)
“Private sector job creation slowed further in November and wages showed their smallest growth in more than two years, payrolls processing firm ADP reported Wednesday. Companies added just 103,000 workers for the month, slightly below the downwardly revised 106,000 in October...” Story at...
https://www.cnbc.com/2023/12/06/private-payrolls-increased-by-103000-in-november-below-expectations-adp-says.html
 
EIA CRUDE INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 4.6 million barrels from the previous week. At 445.0 million barrels, U.S. crude oil inventories are about 1% below the five year average for this time of year.” Report at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf
 
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 slipped about 0.4% to 4549.
-VIX rose about 1% to 12.97.
-The yield on the 10-year Treasury dipped to 4.106%.
 
PULLBACK DATA:
-Drop from Top: 5.2%. 25.4% max (on a closing basis).
-Trading Days since All-Time Top: 484-days. (The top was 3 January 2022.)
The S&P 500 is 6% ABOVE its 200-dMA and 4% 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 – Sold 12/6/2023. I took a loss on this one – sold for tax loss purposes.
SSO – 2x S&P 500 ETF. Added 8/24.
MSFT – sold 12/6/2023. Momentum was fading.
INTC – Added 12/6/2023. I am late on this one.
BA – Added 12/6/2023. Boeing has been doing well recently.  They have the orders for new planes – can they execute? I’m guessing yes, since the market seems to think they will.
 
TODAY’S COMMENT:
Here are the Top 5 Holdings of the XLK-ETF:

The Top 2 holdings of the SPY-ETF are Microsoft (MSFT) and Apple (AAPL) at about 7% each. Since SPY and XLK are both heavily into Microsoft, and I own large positions in both, I decided to sell my individual shares of MSFT. Momentum has been slowing since I added it.
 
I’ve wanted to own Nvidia, but it bothers me that their chips are made by Taiwan Semiconductor and the Chinese will move on Taiwan – we just don’t know when. I saw a piece on Intel that said Intel has been testing manufacturing Nvidia chips and tests are going well. That news is several months old and is one reason Intel has been going up. I’ve held off buying Intel because they are still losing money; but it was the #1 stock in my DOW momentum analysis (it dropped to #2 today) so I added a small position in Intel today.  I’ve found that the best time to buy a new issue in my momentum system is to buy as soon as an issue becomes #1.  In that regard, I am very late into Intel and it may not work out. Still Intel is fairly valued by some analysts while Microsoft is well overvalued. It may continue to consolidate, so my position is a starter – I’ll add more if the price drops.
 
“Intel has an expected revenue and earnings growth rate of 13.7% and 98.5%, respectively, for next year. The Zacks Consensus Estimate for next-year earnings has improved 1.6% over the last 30 days.” – from Zacks posted at YahooFinance at...
https://finance.yahoo.com/news/tech-set-roar-2024-astounding-131800105.html
 
The Rusell 2000 is outperforming the S&P 500 recently, so tomorrow, I will move out of the S&P 500 and into the Wilshire 2000 in my retirement account.
 
The daily spread of 20 Indicators (Bulls minus Bears) declined from +7 to +6 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations remained  +44. (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 & VIX are bullish; VOLUME & 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
 
WEDNESDAY 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 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.