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

 
“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.

 

“The climate summit concluded without significant concessions from China, and demand for EVs dropped sharply.” —Michael Ramirez. Political commentary at...
https://michaelpramirez.com/index.html
 
CHRISTMAS QUIZ: In which carol do we learn that Jesus was not a crybaby?
 Answer at end of post.
 
GOLDMAN BULLISH (msn.com)
“The Federal Reserve’s pivot last week to an easier monetary policy made many investors more bullish toward stocks. You can count Goldman Sachs among them. It has raised its year-end 2024 target for the S&P to 5,100 from 4,700.” Story at... 
Goldman sharply shifts stocks forecast after Fed's policy pivot (msn.com)
 
MARKET REPORT / ANALYSIS
-Monday the S&P 500 rose about 0.5% to 4741. (Only 1.2% below its all-time high.)
-VIX rose about 2% to 12.56.
-The yield on the 10-year Treasury rose to 3.935%.
 
PULLBACK DATA:
-Drop from Top: 1.2%. 25.4% max (on a closing basis).
-Trading Days since All-Time Top: 492-days. (The top was 3 January 2022.)
The S&P 500 is 9.7% ABOVE its 200-dMA and 6.8% 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 of the 25% decline was in the 3600 area and we called a buy on 4 October 2022.
 
MY TRADING POSITIONS:
SSO – 2x S&P 500 ETF. SOLD 12/18/2023.
QLD – SOLD 12/18/2023.
 
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.)
 
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:
Again we see that there are enough Top indicators to suggest a retreat of some kind.  Both RSI and Bollinger Bands remain overbought along with a couple of other overbought indications. I decided to take profits in my leveraged, long positions in SSO and QLD very late in the day.  Leveraged ETFs are best sold when markets are on the upswing.  They can lose $ fast if markets retreat.
 
I predicted months ago that the S&P 500 would make a new high this year.  The Index is close, 1.2% to go.
 
The daily spread of 20 Indicators (Bulls minus Bears) declined +13 to +7 (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 +79 to +83. (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

MONDAY 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 65% 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. 
 
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.
 
CHRISTMAS QUIZ: In which carol do we learn that Jesus was not a cry baby? Ans.
“Away in a Manger” contains these words:
“The cattle are lowing
the poor baby wakes.
But little Lord Jesus,
No crying He makes.”