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.
 
“It was miraculous. It was almost no trick at all, he saw, to turn vice into virtue and slander into truth, impotence into abstinence, arrogance into humility, plunder into philanthropy, thievery into honor, blasphemy into wisdom, brutality into patriotism, and sadism into justice. Anybody could do it; it required no brains at all. It merely required no character.” - Joseph Heller, Catch-22
My cmt: While I am tempted to suggest this describes Trump (rather than a character in a book published in 1961), it is unfortunate that the above could describe a number of US politicians.
 
“Providence has ordained that I should be the greatest liberator of humanity. I am freeing man from the restraints of an intelligence that has taken charge, from the dirty and degrading self-mortifications of a false vision called conscience and morality…The Ten Commandments have lost their validity. Conscience is a Jewish invention; it is a blemish like circumcision.” – Adolf Hitler.
 
Why do they hate us? “Who knows, it might even be our religion from which the world and all peoples learn good, and for that reason and that reason only do we now suffer.” - Anne Frank
 
PAYROLL REPORT (Reuters)
“U.S. job growth slowed more than expected in April and annual wage gains cooled, signs of a looser labor market which are good news for markets and the Federal Reserve that will likely require more such signals before pivoting from a higher for longer policy. Nonfarm payrolls increased by 175,000 jobs last month...”
https://www.reuters.com/markets/us/view-april-us-jobs-report-shows-looser-labor-market-good-news-fed-2024-05-03/
 
ISM NON-MANUFACTURING PMI (ISM via Cision PR Newswire and  Fox 44 News)
“Economic activity in the services sector contracted in April for the first time since December 2022, ending a period of 15 consecutive months of growth, say the nation's purchasing and supply executives... "The decline in the composite index in April is a result of lower business activity, slower new orders growth, faster supplier deliveries and the continued contraction in employment. Survey respondents indicated that overall business is generally slowing, with rates varying by company and industry.” Press release at...
https://www.fox44news.com/business/press-releases/cision/20240503LA03045/services-pmi-at-49-4-april-2024-services-ism-report-on-business/
 
MARKET REPORT / ANALYSIS
-Friday the S&P 500 rose about 1.3% to 5129.
-VIX declined about 6% to 13.74.
-The yield on the 10-year Treasury declined to 4.497%.
 
MY TRADING POSITIONS:
UWM – Added 5/2/2024
QLD – Added 4/29/2024
SSO – Added 4/29/2024.
 
XLE – Added 4/24/2024
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.
“The Dow Jones U.S. Completion Total Stock Market Index, also known as the DWCPF, is a widely used financial index that provides a comprehensive measure of the US equity market. The DWCPF includes all US stocks that are not included in the Dow Jones US Total Stock Market Index, which comprises large-cap and mid-cap companies. As a result, the DWCPF provides a complete picture of the US stock market, including small-cap and micro-cap companies, which are often overlooked by other indexes.” From...
https://fi.money/blog/posts/what-is-dow-jones-u-s-completion-total-stock-market-index-dwcpf
 
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
The Bull/Bear Spread (Bull Indicators minus Bear Indicators) moved into Bull territory  with 8 Bear-signs and 13-Bull and the 10-dMA continued higher. (The rest are neutral. It is normal to have a lot of neutral indicators since many of those are top or bottom indicators that will signal only at extremes.) I’m skipping the chart today – indicators improved to Bullish; not much more to say.
 
TODAY’S COMMENT:
Bad news was good news today. The payroll report and Services-PMI showed less hiring, higher unemployment, slower growth and markets loved the news. One piece of good news was in the payroll report: wage growth cooled. I’ll just go-with-the-flow. All this news suggests the Fed’s next move will be down and perhaps sooner than expected.
 
“Looking good, Billy Ray!  Feeling good, Louis!”
 
LONG-TERM INDICATOR: The Long Term NTSM indicator remained HOLD: VOLUME is bullish; VIX, PRICE & SENTIMENT are neutral.
(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. The S&P 500 is headed back towards all-time, new highs.
 
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)
I forgot to update this chart yesterday, but below is Friday’s chart. 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 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 75% stocks, including stock mutual funds and ETFs. I’m usually about 50% invested in stocks, so this is a bullish, over-invested position. This is my max % for stock allocation.
 
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, usually by using an S&P 500 ETF as I did back in October 22 and 23.