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

 
“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
JOBLESS CLAIMS (Bloomberg)
“Applications for US unemployment benefits fell for the first time in three weeks, suggesting employers are still largely holding on to their workers. Initial claims decreased by 9,000 to 218,000 in the week ended Feb. 3...” Story at...
https://www.bloomberg.com/news/articles/2024-02-08/us-initial-jobless-claims-drop-for-the-first-time-in-three-weeks
 
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 rose about 0.1% to 4998.
-VIX declined about 0.3% to 12.79.
-The yield on the 10-year Treasury rose to 4.154%.
 
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.
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:
5.4% of all issues traded on the NYSE made new, 52-week highs when the S&P 500 made a new all-time-high today, 8 February 2024. The 5-year average was for this stat is roughly 6.7%. The new-high data at the new all-time high is still below average, but not drastically so.
 
The below chart (Junk Bond vs S&P 500 spread) isn’t one of my indicators, but a lot of investors think that Junk Bonds foretell trouble when they diverge from the S&P 500.  We're seeing that now – the smoothed spread (green line) is falling hard while the Index is climbing.  There are also other bearish divergences that are in my system.  We’ll get a look at those tomorrow when I do the Friday rundown of indicators.
 

I’ll be selling UWM (leveraged Russel 2000) if Bollinger Bands & RSI become overbought.  They are both very close now. I don’t want to hold leveraged ETF’s if the markets become weak. 
 
Repeating yesterday’s note: The S&P 500 closed 12.1% above its 200-day moving average (200-dMA) and 5% above its 50-dMA.  Both of those suggest a stretched market that may be due for some weakness. This signal is a warning of possible trouble, but I am not going to make any investment changes unless I see more weakness in the indicators. These stats are not good for timing, but they are first warning signs.
 
The “Friday Summary of Indicators” (about 50 Indicators) has moved to the Bull side, but it remains close to neutral.
 
The daily spread of 20 short-term Indicators (Bulls minus Bears) improved from -1 to +4 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations declined from +24 to +23. (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 declined to HOLD: PRICE is bullish; VOLUME, SENTIMENT & VIX 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.  I am closely watching indicators.
 
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 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 continuation of bullish market action.
 
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.