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

 
“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
“Far more money has been lost by investors in preparing for corrections, or anticipating corrections, than has been lost in the corrections themselves.” - Peter Lynch, former manager of Fidelity’s Magellan® fund.
 
"I, like an awful lot of people in this audience, was the first in my family to go to college and watched by dad struggle to help me get there." – President Joe Biden.
Fact check: It’s a Lie. “He acknowledged it was untrue more than 35 years ago when his 1987 presidential campaign unraveled in a plagiarism scandal that saw him lift remarks from a British politician.” – NY Post.
 
UNIV OF MICHIGAN SENTIMENT (Univ of Michigan)
“Sentiment moved sideways for the fourth straight month, as consumers perceived few meaningful developments in the economy. Since January, sentiment has remained remarkably steady within a very narrow 2.5 index point range, well under the 5 points necessary for a statistically significant difference in readings. Consumers perceived little change in the state of the economy since the start of the new year. Expectations over personal finances, business conditions, and labor markets have all been stable over the last four months. However, a slight uptick in inflation expectations in April reflects some frustration that the inflation slowdown may have stalled.” Press release at... 
http://www.sca.isr.umich.edu/
 
MARKET REPORT / ANALYSIS
-Friday the S&P 500 fell about 1.5% to 5123.
-VIX rose about 16% to 17.31.
-The yield on the 10-year Treasury slipped to 4.518%.
 
MY TRADING POSITIONS:
QLD- Sold 4/8/2024
UWM – Sold 4/8/2024.
INTC – Sold 4/8/2024.
 
XLK – Technology ETF (holding since the October 2022 lows). I don’t want to pay taxes on this gain, so I am holding this position.
CRM – Added 1/22/2024
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 tax-deferred, retirement account betting on Smaller Caps. (This position captures smaller cap and micro-cap stocks that are not included in the Dow Jones US Total Stock Market Index .)
 
TODAY’S COMMENT:
The spread for the Summary of 50-Indicators slipped more to the bear side. It would be nice if I had this data going back for years, then we might be able to say that when the 10-dMA reaches “x”, it’s time to sell.  Unfortunately, I was unable to automate all the decision making for the various indicators. Some must be input manually. Thus, to back-test this chart would take an enormous effort going back thru the data and manually inputting daily numbers for some indicators - I can’t do it. We can look at the recent total of Bull and Bear signals for the sell decision. In the past when the number of Bull signals has been zero, it was a good time to sell. That was true during the Coronavirus bear-market and the 25% bear-market that ended recently when the S&P 500 made new highs. There are now 16 bear-signs and 5-Bull. So, this is not giving a clear sell signal. Other Indicators aren’t there either.
 
The Long-Term Indicator is not yet giving a sell signal. We also note that Bollinger Bands and RSI are approaching Buy-signals and the S&P 500 is close to its 50-dMA.  The Index touched the 50-dMA (5111) in the afternoon and bounced higher. That’s about where the lower trend-line for the Index usually occurs. This all suggests that holding on may be the best course of action. It is also possible that this recent weakness ended today. 
 
Today was a statistically-significant, down-day. That just means that the price-volume move exceeded my statistical parameters. Statistics show that a statistically-significant, down-day is followed by an up-day about 60% of the time.  Bottoms often occur on statistically-significant, down-days, so today could be the end of the pullback. Unfortunately, all statistically-significant, down-days are not bottoms so we can’t be certain that weakness is over.  
 

This is the correct Friday chart.

CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
Today, there are 16 bear-signs and 5-Bull. Last Friday they were 16 bear-signs and 6-Bull so we haven’t seen much deterioration over the week.
 
Here are a few of the indicators:
BULL
-The 50-dMA percentage of issues advancing on the NYSE (Breadth) is above 50%.
-The 100-dMA percentage of issues advancing on the NYSE (Breadth) is above 50%
-Smart Money.
-XLI-ETF (Cyclical Industrials) vs the S&P 500.
 
NEUTRAL
-Sentiment.
-Bollinger Bands.
-RSI.
-Overbought/Oversold Index (Advance/Decline Ratio).
-Issues advancing on the NYSE (Breadth) compared to the S&P 500.
-On average, the size of up-moves has been smaller than the size of down-moves over the last month, but not enough to send a message.
-The short-term, 10-day EMA, Fosback Hi-Low Logic Index.
-The long-term, 50-dEMA, Fosback Hi-Low Logic Index.
-There have been 10 up-days over the last 20 sessions.
-There have been 4 up-days over the last 10 sessions.
-VIX indicator. (The Options players finally woke up. This indicator signaled sell at one point during the day, but recovered to a neutral indication.)
 
BEAR
-There have been 7 Distribution Days since 19 Jan Follow-thru day.
-The 10-dMA percentage of issues advancing on the NYSE (Breadth) is below 50%.
-The smoothed advancing volume on the NYSE is falling.
-My Money Trend indicator.
-McClellan Oscillator.
-Short-term new-high/new-low data.
-Long-term new-high/new-low data.
-MACD of S&P 500 price.
 
More than 90% of the volume today was down-volume. That can be a bearish sign, but not all of the tests for a Bearish, 90% Down-Volume-day were met (per Lowry Research methodology).   Still, if we have another 90% down-volume day it would be a bad omen.
 
LONG-TERM INDICATOR: The Long Term NTSM indicator remained HOLD: PRICE, SENTIMENT & VIX are neutral; VOLUME is bearish.
(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 am bullish longer-term, but Neutral for now. I took profit in some positions last week. I may trim more, but that will depend on the indicators. The S&P 500 is only 2.5% below its all-time high, so no reason to panic. My guess is that the markets may retreat a little farther until we see some bottom indications. But, as noted above, Friday could hae been the bottom.  
 
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
 
FRIDAY MARKET INTERNALS (NYSE DATA)

My basket of Market Internals remained 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 50% stocks, including stock mutual funds and ETFs. I’m usually about 50% invested in stocks, so this is a fully-invested position.
 
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.