PPI ... 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.
 
“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.
 
PPI (CNBC)
“The producer price index, a gauge of prices that producers get for their goods and services in the open market, declined 0.2% for the month... Excluding food, energy and trade services, the PPI was unchanged, compared with expectations for a 0.3% increase.” Story at...
https://www.cnbc.com/2024/06/13/ppi-report-wholesale-prices-unexpectedly-fell-0point2percent-in-may.html
 
JOBLESS CLAIMS (Fox Business)
“Figures released Thursday by the Labor Department show initial claims for the week ending June 8 increased by 13,000 to 242,000, above the 2019 pre-pandemic average of 218,000 claims. It marks the highest level for jobless claims since August 2023.” Story at...
https://www.foxbusiness.com/economy/number-americans-filing-jobless-benefits-unexpectedly-spikes-10-month-high
My cmt: This news was a surprise.
 
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 rose about 0.2% to 5435.
-VIX fell about 1% to 11.94.
-The yield on the 10-year Treasury declined to 4.250%.
 
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) shifted to neutral (red line in the chart below). Today, there were 13 Bear-signs and 15-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.) While indicators are more bearish, I rarely get concerned by the daily numbers. The 10-dMA of spread (purple line in the chart below) is moving higher, a bullish sign.

TODAY’S COMMENT:
“CNBC’s Jim Cramer on Thursday said tech stocks have been integral to the market rally, and other sectors can’t quite say the same. Cramer pointed to weakness in sectors like banking, health care, transport and food and beverage.” From CNBC at...
https://www.cnbc.com/2024/06/13/cramer-says-the-market-cant-broaden-out-due-to-uncertainty-away-from-tech.html
 
That seems to be the case.  We are seeing a back-and-forth movement in Breadth.  Today, the 10-dMA of issues advancing on the NYSE slipped back below 50% (a bearish sign) and my Breadth vs the S&P 500 indicator signaled that the S&P 500 has gotten too far ahead of advancing issues.  Both are signs that the advance is narrow. We’ll just have to watch this going forward to see if it improves.
 
LONG-TERM INDICATOR: The Long Term NTSM indicator remained BUY: PRICE, VOLUME & VIX are bullish; 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
I am bullish, but somewhat cautiously so, since markets are stretched and breadth is once again looking weak.
 
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 slipped to 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.