“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
ISM MANUFACTURING (ISM via prnewswire)
"The Manufacturing PMI® registered 46.7 percent in November, unchanged from the 46.7 percent recorded in October. The overall economy continued in contraction for a second month after one month of weak expansion preceded by nine months of contraction and a 30-month period of expansion before that. (A Manufacturing PMI® above 48.7 percent, over a period of time, generally indicates an expansion of the overall economy.)” Press release at...
https://www.prnewswire.com/news-releases/manufacturing-pmi-at-46-7-november-2023-manufacturing-ism-report-on-business-302002512.html
NET ZERO FAILS THE COST BENEFIT TEST (WSJ)
“...each dollar spent [to meet Paris Accord environmental promises] will avoid less than 17 cents of climate damage. The total, undiscounted loss over the century is beyond $1,800 trillion. For comparison, global GDP last year was a little over $100 trillion. Although well-intentioned, current climate policy would end up destroying a sizable fraction of future prosperity... A study by a researcher for the Copenhagen Consensus shows that competitive government investment in green R&D would be 66 times as effective as Paris policies, while costing between 1% and 10% as much. Unfortunately for the world, a serious cost-benefit discussion isn’t likely to make the Dubai agenda.” – Bjorn Lomborg, President of the Copenhagen Consensus & a visiting fellow at Stanford University’s Hoover Institution. Commentary at...
https://www.wsj.com/articles/net-zero-fails-the-cost-benefit-test-paris-climate-accord-cop28-748ae52d
My cmt: I continue to be troubled by the massive expenditures in green giveaways, for which taxpayers are responsible. These tax subsidies and outright giveaways have been established by Presidential fiat. Given the cost and societal change associated with these “agreements,” i.e., the Paris accords, they should have been ratified by the Senate.
MARKET REPORT / ANALYSIS
-Friday the S&P 500 rose about 0.6% to 4595.
-VIX dipped about 2% to 12.63.
-The yield on the 10-year Treasury dipped to 4.209%.
PULLBACK DATA:
-Drop from Top: 4.2%. 25.4% max (on a closing basis).
-Trading Days since All-Time Top: 481-days. (The top was 3 January 2022.)
The S&P 500 is 7.2% ABOVE its 200-dMA and 5.4% 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 – Added Tuesday, 8/22.
SSO – 2x S&P 500 ETF. Added 8/24.
MSFT – added 11/16/2023.
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 remained bullish this week: now 5-bear and 20-bull.
BULL SIGNS
-There was a Follow-thru Day 30 November. This cancels all 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 2 Nov.
-Long-term new-high/new-low data.
-Short-term new-high/new-low data.
-Slope of the 40-dMA of New-highs is rising.
-McClellan Oscillator.
-The graph of the 100-day Count (the 100-day sum of up-days).
-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 14 November. In addition, there were back-to-back, high up-volume days (80%+) on the NYSE 2 & 3 Nov.
-XLI-ETF (Cyclical Industrials) vs the S&P 500. The 40-dMA of spread is turning up – call it 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.
-70% of the 15-ETFs that I track have been up over the last 10-days. (45-55% is neutral.)
NEUTRAL
-There have been 4 Statistically-Significant days (big moves in price-volume) in the last 15-days.
-Sentiment.
-Bollinger Band Squeeze 28 April - expired.
-Bollinger Bands.
-The 50-dMA percentage of issues advancing on the NYSE (Breadth) has not been below 50%, for more than 3 days in a row.
-Issues advancing on the NYSE (Breadth) compared to the S&P 500.
-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 14 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 7.2% 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.
-The Smart Money (late-day action).
BEAR SIGNS
-Overbought/Oversold Index (Advance/Decline Ratio).
-The 100-dMA percentage of issues advancing on the NYSE (Breadth) is below 50%
-My Money Trend indicator is falling.
-RSI – overbought.
-S&P 500 spread vs. Utilities (XLU-ETF).
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 20-Bull.
Last week, there were 8 bear-sign and 20 bull-signs.
The S&P 500 is climbing out of a 25% correction that
bottomed in October of 2022 and it just finished coming out of a 10% correction
that bottomed on 27 October 2023. I think that most of the bearish TV pundits are
overthinking the rally and worrying too much about economic slowdowns. We haven’t
even made a new high on the S&P 500 yet.
I won’t worry until the S&P 500 makes a new, all-time high; then we’ll
keep a sharp eye on indicators. The markets are telling us a recession is not
near even though there are some signs of an economic slowdown.
Thursday and Friday were statistically significant up-days.
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.
The daily spread of 20 Indicators (Bulls minus Bears) declined improved from -1 to +5 (a positive number is bullish; negatives are bearish); the 10-day
smoothed sum that smooths the daily fluctuations declined from +37 to +34.
(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
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.)
"The Manufacturing PMI® registered 46.7 percent in November, unchanged from the 46.7 percent recorded in October. The overall economy continued in contraction for a second month after one month of weak expansion preceded by nine months of contraction and a 30-month period of expansion before that. (A Manufacturing PMI® above 48.7 percent, over a period of time, generally indicates an expansion of the overall economy.)” Press release at...
https://www.prnewswire.com/news-releases/manufacturing-pmi-at-46-7-november-2023-manufacturing-ism-report-on-business-302002512.html
“...each dollar spent [to meet Paris Accord environmental promises] will avoid less than 17 cents of climate damage. The total, undiscounted loss over the century is beyond $1,800 trillion. For comparison, global GDP last year was a little over $100 trillion. Although well-intentioned, current climate policy would end up destroying a sizable fraction of future prosperity... A study by a researcher for the Copenhagen Consensus shows that competitive government investment in green R&D would be 66 times as effective as Paris policies, while costing between 1% and 10% as much. Unfortunately for the world, a serious cost-benefit discussion isn’t likely to make the Dubai agenda.” – Bjorn Lomborg, President of the Copenhagen Consensus & a visiting fellow at Stanford University’s Hoover Institution. Commentary at...
https://www.wsj.com/articles/net-zero-fails-the-cost-benefit-test-paris-climate-accord-cop28-748ae52d
My cmt: I continue to be troubled by the massive expenditures in green giveaways, for which taxpayers are responsible. These tax subsidies and outright giveaways have been established by Presidential fiat. Given the cost and societal change associated with these “agreements,” i.e., the Paris accords, they should have been ratified by the Senate.
-Friday the S&P 500 rose about 0.6% to 4595.
-VIX dipped about 2% to 12.63.
-The yield on the 10-year Treasury dipped to 4.209%.
-Drop from Top: 4.2%. 25.4% max (on a closing basis).
-Trading Days since All-Time Top: 481-days. (The top was 3 January 2022.)
The S&P 500 is 7.2% ABOVE its 200-dMA and 5.4% 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.
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.)
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.
MSFT – added 11/16/2023.
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 bullish this week: now 5-bear and 20-bull.
-There was a Follow-thru Day 30 November. This cancels all 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 2 Nov.
-Long-term new-high/new-low data.
-Short-term new-high/new-low data.
-Slope of the 40-dMA of New-highs is rising.
-McClellan Oscillator.
-The graph of the 100-day Count (the 100-day sum of up-days).
-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 14 November. In addition, there were back-to-back, high up-volume days (80%+) on the NYSE 2 & 3 Nov.
-XLI-ETF (Cyclical Industrials) vs the S&P 500. The 40-dMA of spread is turning up – call it 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.
-70% of the 15-ETFs that I track have been up over the last 10-days. (45-55% is neutral.)
-There have been 4 Statistically-Significant days (big moves in price-volume) in the last 15-days.
-Sentiment.
-Bollinger Band Squeeze 28 April - expired.
-Bollinger Bands.
-The 50-dMA percentage of issues advancing on the NYSE (Breadth) has not been below 50%, for more than 3 days in a row.
-Issues advancing on the NYSE (Breadth) compared to the S&P 500.
-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 14 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 7.2% 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.
-The Smart Money (late-day action).
-Overbought/Oversold Index (Advance/Decline Ratio).
-The 100-dMA percentage of issues advancing on the NYSE (Breadth) is below 50%
-My Money Trend indicator is falling.
-RSI – overbought.
-S&P 500 spread vs. Utilities (XLU-ETF).
I remain bullish.
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 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
