Jobless Claims .... ADP Employment ... Crude Oil Inventories ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

 
CHRISTMAS QUIZ: Name the Christmas Carol about a Quadruped with Crimson Proboscis. Answer at end of Blog.
 
“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
“My 40-year career in the U.S. Forest Service leads me to believe that your editorial “Biden’s New Forest Plan Will Backfire” (Dec. 22) is correct. Banning the harvest of timber on 25 million acres of “old growth” forest will have the direct opposite effect on carbon emissions that the Biden administration wants by precluding the effective protection of those lands from devastating wildfires.” - Richard Chase, WSJ letters to the Editor.
My cmt: The Democrats keep doing things that sound good instead of actually helping the environment. The Keystone pipeline was another example.  There, they canceled the pipeline to reduce global warming, but oil still has to get to the refineries. Now it travels by rail at higher carbon impact, more risk of spills and at higher cost. Go figure....?
 
ADP EMPLOYMENT CHANGE (ADP)
“Private sector employment increased by 164,000 jobs in December and annual pay was up 5.4 percent year-over-year, according to the December ADP® National Employment Report produced by the ADP Research Institute® in collaboration with the Stanford Digital Economy Lab ("Stanford Lab").” Press release at...
https://www.prnewswire.com/news-releases/adp-national-employment-report-private-sector-employment-increased-by-164-000-jobs-in-december-annual-pay-was-up-5-4-302026295.html
 
JOBLESS CLAIMS (AP News)
“The number of Americans applying for unemployment benefits fell last week as the labor market continues to show resilience despite elevated interest rates. Jobless claims fell to 202,000 for the week ending Dec. 30, down by 18,000 from the previous week...” Story at...
https://apnews.com/article/unemployment-benefits-jobless-claims-layoffs-labord0c029590a524133ab596fd5ed3ad6bd
 
EIA CRUDE OIL INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 5.5 million barrels from the previous week. At 431.1 million barrels, U.S. crude oil inventories are about 2% below the five-year average for this time of year.” Report at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf
 
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 declined about 0.1% to 4699.
-VIX dipped about 1% to 13.91. (The Options Crowd isn’t worried about this pullback.)
-The yield on the 10-year Treasury rose to 4.003%.
 
PULLBACK DATA:
-Drop from Top: 1.9%. 25.4% max (on a closing basis).
-Trading Days since All-Time Top: 503-days. (The top was 3 January 2022.)
The S&P 500 is 7.4% ABOVE its 200-dMA and 3.5% ABOVE its 50-dMA.
*I won’t call the correction over until the S&P 500 makes a new all-time-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:
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:
Apple and Microsoft are selling due to their relatively high PEs. Those 2 stocks make up half of XLK and that explains recent price action for the XLK. It has fallen out of my top 3 momentum plays so I will take profits in XLK. I’m leaning toward IBB as a replacement. ITA is a reasonable choice, but I already own Boeing and that’s nearly 20% of ITA. I can’t bring myself to buy the Financials (XLF), but I don’t have a good reason for avoiding them.
 
Once again, the S&P 500 faded toward the end of the day and that isn’t encouraging for ending the ongoing pullback.  Indicators fell into a neutral zone from a very bullish point suggesting a pullback.
The 50-dMA is now 4531.  It is not likely that the S&P 500 will fall that far; the 50-dMA is rising so my guess for worst case pullback is still in the 4550-4600 area (about 3% below today’s close).
 
The daily spread of 20 Indicators (Bulls minus Bears) improved from -4 to -3 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations declined from +58 to +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 HOLD: PRICE, 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 remain bullish, but indicators and markets are weak and a decline of 3-4% more 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
 
THURSDAY MARKET INTERNALS (NYSE DATA)

My basket of Market Internals remained 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 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.
 
CHRISTMAS QUIZ: Ans.
Rudolf the Red Nosed Reindeer. “Robert L. May created Rudolph in 1939 as an assignment for Chicago-based Montgomery Ward. The retailer had been buying and giving away coloring books for Christmas every year and it was decided that creating their own book would save money... While May was pondering how best to craft a Christmas story about a reindeer, while staring out his office window in downtown Chicago, a thick fog from Lake Michigan blocked his view—giving him a flash of inspiration. "Suddenly I had it!" he recalled. "A nose! A bright red nose that would shine through fog like a spotlight...” - Wikipedia.
 
Gene Autry wrote the song "Rudolph, the Red-Nosed Reindeer" along with “Santa Claus Is Comin' to Town", "Here Comes Santa Claus" and "Frosty the Snowman."