PMI ... Crude Oil Inventories ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

 
“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
S&P COMPOSITE PMI (S&P Global)
“Businesses in the US signalled a stronger upturn in activity at the start of the year, as output growth quickened to the sharpest rate in seven months. The expansion was driven by service providers, as manufacturers continued to see a drop in production amid intensifying supply issues. Nonetheless, a broad-based improvement in demand conditions was reported, as firms reported stronger new order growth for both goods and services, helping push business confidence for the year ahead to a 20-month high.” Story at...
https://www.pmi.spglobal.com/Public/Home/PressRelease/e378d753625f446d9d4ef29b3f71a1c4
 
EIA CRUDE INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 9.2 million barrels from the previous week. At 420.7 million barrels, U.S. crude oil inventories are about 5% below the five year average for this time of year.” Report at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf
 
PRIMARY ELECTION MUSING
I, along with many others, have been suggesting that the public abhors the possibility of a Biden/Trump rematch. After the results in Iowa and New Hampshire, it is clear that I am wrong.  Apparently, the electorate loves the match-up. Why? I haven’t got a clue. - M. Stith
 
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 rose about 0.1% to 4869.
-VIX rose about 5% to 13.14.
-The yield on the 10-year Treasury rose to 4.180
 
MY TRADING POSITIONS:
UWM – Added 1/22/2024
XLK – Technology ETF (holding since the October 2022 lows).
INTC – Added 12/6/2023.
 
CRM – Added 1/22/2024
BA – Added 12/6/2023. I plan to hold Boeing for the time being. Could it get any worse for them? Yes, it could – more loose bolts found Tuesday.
DWCPF - Dow Jones U.S. Completion Total Stock Market Index. – Added 12/7/2023 when I sold the S&P 500. This is a large position in my retirement account betting on Small Caps.
 
TODAY’S COMMENT:
The chart below is a plot of the S&P 500 (GSPC) and the Russel 2000 (IWM) from 7 December (when I purchased the small caps) thru 24 January at about 3 pm.  At the end of December, my switch into small-caps looked like a brilliant move.  Since then, small-caps pulled back and have slightly underperformed the S&P 500. It’s something to watch.  Since interest rates have remained relatively high, small caps are under performing. If the under-performance continues, I may switch back to the large caps.  The smalls will outperform when the Fed gives more optimistic clues on rate cuts.

 
The S&P 500 made another new all-time high Tuesday and 5% of issues on the NYSE made new, 52-week highs. That’s an OK number. I’ll continue to watch this stat since it can be an early warning for the markets.
 
RSI is very close to overbought, but today, Bollinger Bands were not overbought.  Still, indicators are not far from signaling another short-term top and markets could come under some pressure, but I don’t expect anything big.
 
The daily spread of 20 Indicators (Bulls minus Bears) declined from +2 to +1 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations declined from -50 to -47. (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; VOLUME, VIX & 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.
 
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 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 sooner rather than later.  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.