Empire State Manufacturing ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis

 
NY FED MANUFACTURING (NY Fed)
“Business activity held steady in New York State in December, according to firms responding to the Empire State Manufacturing Survey. After rising sharply last month, the headline general business conditions index retreated thirty-one points to 0.2. New orders and shipments increased modestly. Delivery times shortened somewhat, and supply availability was little changed. Inventories increased at a substantial clip. Labor market indicators pointed to small decline in employment and a slightly shorter average workweek. Both input and selling price increases moderated. Firms remained optimistic about the six-month outlook, though somewhat less so than in November.” Report at...
https://www.newyorkfed.org/survey/empire/empiresurvey_overview
 
MARKET REPORT / ANALYSIS AS OF 1PM FRIDAY
-Monday the S&P 500 rose about 0.4% to 6074.
-VIX was up about 6% to 14.69.
-The yield on the 10-year Treasury was unchanged (compared to about this time, prior trading day) at 4.395%.
 
MY TRADING POSITIONS:
XLK – Holding since the October 2022 lows.  Added more 9/20.
SSO – added 10/16.
SPY – added 9/19 & more 10/16
QLD – added 11/5.
UWM – added 11/11
 
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
Today, of the 50-Indicators I track, 18 gave Bear-signs and 8 were Bullish. The rest are neutral. (It is normal to have a lot of neutral indicators since many of the indicators are top or bottom indicators that will signal only at extremes.)

The daily Bull/Bear, 50-Indicator spread (Bull Indicators minus Bear Indicators, red curve in the chart above) remained -10 (10 more Bear indicators than Bull indicators).
 
TODAY’S COMMENT
There was another Hindenburg Omen today...
Hindenburg Omen: (https://www.investopedia.com/terms/h/hindenburgomen.asp). As we’ve noted before, the Omen sends a lot of false warnings, but there have been 2 Omens in the last 3 days. Clusters of Omens are supposed to be more reliable than a single warning. The short-term Fosback New-high/new-low Logic indicator uses a similar analytic approach; it is not close to giving a sell warning so no need to panic yet. Unfortunately, there are other bearish signs.
 
Today’s Bull-Bear spread of -10 is bearish. The 10-dMA of the 50-Indicator Spread (purple line in the chart above) continued down today so that is a bearish signal. (I follow the 10-dMA for trading buy-signals and as an indicator for sell signals.)
 
The “Calm-Before-the-Storm” indicator flashed a warning to expect a correction within the next 20-days. (Markets have been too calm recently.) By some measures, the S&P 500 is already in correction mode – the 50-dMA of issues advancing on the NYSE has been below 50% for 3 days in a row and that’s a “correction now” signal. This doesn’t mean there is a crash coming, but more weakness is suggested. In mid-October there was a “calm-before-the-storm” warning without much of a decline. Back in July when there was a storm warning the Index corrected about 9%.
 
The S&P 500 is only about 0.3% below its all-time high
 
BOTTOM LINE
I thought this market weakness would end by now. There was an 8.5% correction back in October – it seems too soon for another. Indicators are not confirming my optimism. It may be time to take profits in my retirement accounts (to avoid paying taxes on the gains). If I do make changes I’ll post before the close.  
 
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

MONDAY MARKET INTERNALS (NYSE DATA)

My basket of Market Internals remained SELL. (My basket of Market Internals is a decent trend-following analysis that is most useful when it diverges from the Index.) 
 
 
 

...My current invested position is about 70% stocks, including stock mutual funds and ETFs. I’m usually about 50% invested in stocks when markets are stretched. (75% is my max stock allocation when I am confident that markets will continue higher.)
 
I trade about 15-20% of the total portfolio using the momentum-based analysis I provide here. When I see bullish signs, 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.