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.
CRUDE OIL INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those
in the Strategic Petroleum Reserve) increased by 1.3 million barrels from the
previous week. At 432.4 million barrels, U.S. crude oil inventories are about
2% below the five year average for this time of year.” Story at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 rose about 0.6% to 4783.
-VIX dipped about 0.6% to 12.69.
-The yield on the 10-year Treasury slipped to 4.03
PULLBACK DATA:
-Drop from Top: 0.3%. 25.4% max (on a closing basis).
-Trading Days since All-Time Top: 507-days. (The top was
3 January 2022.)
The S&P 500 is 9.2% ABOVE its 200-dMA and 4.5% ABOVE
its 50-dMA.
*I won’t call the correction over until the S&P 500
makes a new all-time-high; however, 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:
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:
Same story: The summary of indicators last Friday was
10-bear and 10-bull for a spread of zero. The spread is still zero today, (as
it was Monday & Tuesday) so I can’t say the mild pullback we have been
observing is over.
There is a bit of an art to drawing charts. They can vary due to the scales chosen for
the x and y axis. They also vary depending on the time frame chosen. If I look at
the charts going back to October 2023, one can make an argument that the
S&P 500 bounced from its lower trend line last week. That would be nice,
but it isn’t likely. The 50-dMA of the S&P 500 is usually close to the lower S&P 500 trendline
but now the S&P 500 is nearly 5% above the 50-dMA. It is unusual for the Index to get too
much higher than 5% except when the markets are coming off a major bottom.
If we look at a longer-term chart, going back to the
October 2022 lows for example, it does look like this pullback could fall to mid-4500’s.
That does line up with the 50-dMA; it is now 4577.
If I had to guess (and it is mostly a guess) I think
markets still need to pullback to near the lower trend line and reset.
The daily spread of 20 Indicators (Bulls minus Bears) declined
from -2 to -4 (a positive number is bullish; negatives are bearish); the 10-day
smoothed sum that smooths the daily fluctuations declined from +8 to -6.
(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 HOLD: PRICE is bullish; VIX, VOLUME & SENTIMENT are neutral.
(One warning: The Long-Term Indicator is not a good
top-indicator. It can signal BUY at a top.)
(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 don’t try to time the market for small short-term
pullbacks so I remain bullish. We still may be in a routine pullback to the
lower trend line. A decline of about 4-5% from Wednesday’s close would be
perfectly normal.
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 declined to SELL. (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. 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.
