Empire State Manufacturing... Industrial Production ... Composite PMI ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

 
“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
EMPIRE STATE MANUFACTURING (New York Fed)
“Business activity declined in New York State, according to firms responding to the December 2023 Empire State Manufacturing Survey. The headline general business conditions index fell twenty-four points to -14.5, continuing to oscillate around -8.6—the average observed over the past year. New orders fell for a third consecutive month, and shipments also declined. Unfilled orders continued to shrink significantly, and delivery times shortened at the fastest pace since well before the pandemic. Inventories moved lower. Employment declined modestly, and the average workweek edged down. The pace of input price increases moderated, while the pace of selling price increases held steady. After reporting a steep drop in the outlook last month, firms were a little more positive in December, but their optimism remained quite subdued.” Report at...
https://www.newyorkfed.org/survey/empire/empiresurvey_overview
 
INDUSTRIAL PRODUCTION (Floor Daily)
“In November, industrial production increased 0.2%, and manufacturing output rose 0.3%, reports the Federal Reserve. The increase in manufacturing output was more than accounted for by a 7.1% bounceback in motor vehicles and parts production following the resolution of strikes at several major automakers.” Story at...
https://www.floordaily.net/flooring-news/industrial-production-rose-02-in-november
 
S&P GLOBAL COMPOSITE PMI (S&P Global)
“US businesses signaled a slightly stronger close to 2023 as activity rose at the fastest pace for five months in December. The quicker upturn in output was supported by the sharpest increase in new orders since July. Nonetheless, rates of expansion remained historically subdued as firms continued to highlight challenges stimulating demand. Growth was driven by the service sector, as manufacturers registered a further downturn in new orders and a renewed drop in production.” Press release at...
https://www.pmi.spglobal.com/Public/Home/PressRelease/435137fa5a754c79988b22a4378ce135
 
MARKET REPORT / ANALYSIS
-Friday the S&P 500 was little changed at 4719. (Still only 1.6% below its all-time high.)
-VIX dipped about 2% to 12.28.
-The yield on the 10-year Treasury dipped to 3.915%.
 
PULLBACK DATA:
-Drop from Top: 1.6%. 25.4% max (on a closing basis).
-Trading Days since All-Time Top: 491-days. (The top was 3 January 2022.)
The S&P 500 is 9.3% ABOVE its 200-dMA and 6.6% 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 8/21/23.)
 
I took profits and then reestablished positions as follows:
SSO – 2x S&P 500 ETF. Added 8/24/23.
QLD – Added 8/30/23.
 
INTC – Added 12/6/2023.
BA – Added 12/6/2023.
 
DWCPF - Dow Jones U.S. Completion Total Stock Market Index. – Added 12/7/2023. This is a large position in my retirement account betting on Small Caps.
 
TODAY’S COMMENT:
There are enough Top indicators to suggest a retreat of some kind.  Both RSI and Bollinger Bands are overbought along with a couple of other overbought indications. I’m not making any portfolio changes at this time.  There are enough bull signs that if there is a pullback, it should be small.  That could always change so I’ll watch indicators. I predicted months ago that the S&P 500 would make a new high this year.  The Index is close, 1.6% to go. It may be close.
 
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 remained very bullish this week: now 5-bear and 23-bull.
 
BULL SIGNS
-There was a Follow-Thru Day 13 December that cancels any 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%
-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 12 Dec.
-My Money Trend indicator is rising.
-Long-term new-high/new-low data.
-Short-term new-high/new-low data.
-Slope of the 40-dMA of New-highs is rising.
-The graph of the 100-day Count (the 100-day sum of up-days).
-McClellan Oscillator.
-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.
-There was a high up-volume day on 13 December. In addition, there were back-to-back, high up-volume days (80%+) on the NYSE 13 & 14 Dec.
-XLI-ETF (Cyclical Industrials) vs the S&P 500. The 40-dMA of spread is turning up – call it bullish.
-S&P 500 spread vs. Utilities (XLU-ETF) is turning bullish.
-The 5-day EMA is above the 10-day EMA, so short-term momentum is bullish.
-The 5-10-20 Timer System is BUY.
-There was a Zweig Breadth Thrust 3 November. That’s a rare, very-bullish sign, that will remain bullish until the McClellan Oscillator turns negative.
-63% of the 15-ETFs that I track have been up over the last 10-days. (45-55% is neutral.)
 
NEUTRAL
-Overbought/Oversold Index (Advance/Decline Ratio).
-Sentiment.
-Bollinger Band Squeeze 28 April - expired.
-The 50-dMA percentage of issues advancing on the NYSE (Breadth) has not been below 50%, for more than 3 days in a row.
-27 November there was a Bearish Outside Reversal Day, but since the McClellan Oscillator is bullish and low volumes on the prior day may have screwed this indicator, I’ll call this one neutral.
-There have been 13 up-days over the last 20 sessions.
-There have been 6 up-days over the last 10 sessions.
-There was a New-high/New-low spread reversal on 4 October (based on std deviation of spread). - Expired
-The S&P 500 is 9.3% above its 200-dMA. (Bear indicator is 12% above the 200-day.)
-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.
-The Calm-before-the-Storm/Panic Indicator flashed a top warning signal 15 Sept., but it may well have been a bottom signal. - 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.
 
BEAR SIGNS
-There have been 5 Statistically-Significant days (big moves in price-volume) in the last 15-days.
-Bollinger Bands.
-RSI.
-The 100-dMA percentage of issues advancing on the NYSE (Breadth) is below 50%
-Issues advancing on the NYSE (Breadth) compared to 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 5 bear-signs and 23-Bull. Last week, there were 5 bear-sign and 17 bull-signs.
 
The daily spread of 20 Indicators (Bulls minus Bears) declined +14 to +13 (a positive number is bullish; negatives are bearish-14 is a very high number); the 10-day smoothed sum that smooths the daily fluctuations improved from +71 to +79. (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, VOLUME & VIX are bullish; SENTIMENT is 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 remained 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.