Jobless Claims ... Philly Fed ... Housing ... Crude Inventories ... 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.
 
“Nobody can ever trust Fox News, and I am one of them, with the weak and ineffective RINO, Paul Ryan, on its Board of Directors. He’s a total lightweight, a failed and pathetic Speaker of the House, and a very disloyal person.” – Donald Trump.
My cmt: What a joke.  If it weren’t for Fox and their lying, talking-heads, no-one would have believed Trump’s “stolen election” sedition and Trump wouldn’t have a political career.  
 
SOARING US DEBT IS A SPENDING PROBLEM (WSJ)

“...CBO projects that this year’s budget deficit will clock in at roughly $2 trillion, some $400 billion more than it forecast in February and $300 billion larger than last year’s deficit. This is unprecedented when the economy is growing and defense spending is nearly flat. The deficit this fiscal year will be 7% of GDP, which is more than during some recessions.” Opinion at...
https://www.wsj.com/articles/u-s-debt-spending-congressional-budget-office-taxes-entitlements-biden-6b6f3ece?mod=opinion_lead_pos1
 
FED IS ‘PLAYING WITH FIRE’ (CNBC)
“The Federal Reserve is risking tipping the economy into contraction by not cutting interest rates now, according to the author of a time-tested rule for when recessions happen... ‘My baseline is not recession,’ Sahm [chief economist at New Century Advisors] said. ‘But it’s a real risk, and I do not understand why the Fed is pushing that risk. I’m not sure what they’re waiting for.’” Story at...
https://www.cnbc.com/2024/06/18/economist-sahm-who-devised-recession-rule-says-the-fed-is-playing-with-fire-.html
My cmt: Market technicals are looking bad and investors are worried about the Fed. The double whammy might lead to a pullback. Time will tell.
 
JOBLESS CLAIMS (ABC News)
“The Labor Department reported Thursday that jobless claims fell by 5,000 to 238,000 from a 10-month high of 243,000 the week before. The four-week average of claims, which evens out weekly ups and downs, rose by 5,500 to 232,750, highest since September.” Story at...
https://abcnews.go.com/Business/wireStory/us-jobless-claims-fall-238000-10-month-high-111272953
 
PHILLY FED BUSINESS INDEX (Advisor Perspectives)
“The latest Philadelphia Fed manufacturing index remained in positive territory for a fifth straight month as manufacturing activity remained steady overall. In June, the index fell to 1.3 from 4.5 in May, coming in below the forecast of 4.8.” Analysis at...
https://www.advisorperspectives.com/dshort/updates/2024/06/20/philadelphia-fed-manufacturing-index-steady-activity-june-2024?topic=covid-19-coronavirus-coverage
My cmt: Manufacturing is growing, but slightly slower than last month.
 
BUILDING PERMITS (Advisor Perspectives)
“In May, building permits fell to their lowest level since June 2020... This marks a 3.8% decrease from April and a 9.5% decline compared to one year ago.” Analysis at... 
https://www.advisorperspectives.com/dshort/updates/2024/06/20/building-permits-fall-to-nearly-4-year-low
 
CRUDE INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 2.5 million barrels from the previous week. At 457.1 million barrels, U.S. crude oil inventories are about 4% 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 0.2% to 5477.
-VIX rose about 7% to 13.13.
-The yield on the 10-year Treasury declined to 4.261%.
 
MY TRADING POSITIONS:
UWM – Added 5/2/2024
QLD – Added 4/29/2024
XLK – Holding since the October 2022 lows.
 
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) declined to 13 Bear-signs and 12-Bull. (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.) The 10-dMA of spread (purple line in the chart below) continues moving higher, a bullish sign.

TODAY’S COMMENT:
I didn’t mention it Tuesday, but there was extremely high, unchanged-volume on Tuesday. As I’ve often said, many believe that this indicator suggests investor confusion at market turning points. The trend has been up so I would interpret this signal as predicting a turn down. Still, “High-unchanged-volume” is not one of my indicators because it is often wrong.
 
Thursday, there was a Bearish outside reversal day. There was another one just 8 sessions ago.
-According to Investopedia: “This demonstrates that the bulls had control over the market before the bears took the reins in a meaningful way, signaling a shift in the overall trend... For instance, a stock may have a small move higher on the first day, climb even higher the second day, but then sharply decline by the second day’s end... This formation is considered a strong indicator that the prior upward momentum is waning and a reversal is on the horizon.”
https://www.investopedia.com/terms/o/outsidereversal.asp#:~:text=A%20bearish%20outside%20reversal%2C%20also,by%20the%20second%20day's%20end
 
Thursday there was another Hindenburg Omen. That’s 3 in a row.
Investopedia says, “The Hindenburg Omen is a technical indicator that was designed to signal the increased probability of a stock market crash. It compares the percentage of new 52-week highs and new 52-week lows in stock prices to a predetermined reference percentage that is supposed to predict the increasing likelihood of a market crash... The Hindenburg Omen looks for a statistical deviation from the premise that under normal conditions, some stocks are either making new 52-week highs or new 52-week lows. It would be abnormal if both were occurring at the same time.” From Investopedia at...
https://www.investopedia.com/terms/h/hindenburgomen.asp
 
The Short-term Fosberg Hi/Low Logic Index is also close to bearish. This indicator also looks at the number of new-highs and new-lows in a somewhat similar style of analysis as the Hindenburg Omen indicator. It is well known that the Hindenburg is not always right, but there were Hindenburg and short-term Fosback Hi/Low Logic warnings around the top in November of 2021 before the 25% decline. Hindenburg warnings are more likely to be correct when there are a number of Omens clumped together, as they have been recently.
 
The 10-dMA of issues advancing on the NYSE is still below 50%, indicating that for the periods 2-weeks, less than half of all issues on the NYSE have up. These stats just reinforce the narrow advance.
 
The Bull/Bear, 50-Indicator spread is -1 (1 more Bear indicator than Bull indicators). This is a Neutral indication, but the S&P 500 is 13.2% above the 200-dMA. The bear sign is greater than 12%.
 
A correction could start now (one could start any time for that matter); but my guess, based on the indicator spread, is that a correction is not here yet. A top may be indicated by a big up-day.
 
LONG-TERM INDICATOR: The Long Term NTSM indicator slipped to HOLD: PRICE is bullish; VOLUME, VIX & SENTIMENT is 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
No change: I am neutral. Markets are stretched and breadth is looking weak. A 10% retreat is possible, although we don’t have a sell signal at this point.  
 
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)
 

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, so this is a bullish, over-invested position. 75% is my max stock allocation so I have some cash now.
 
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 2022 and 2023.