Payroll Report ... Michigan Sentiment ... Jobless Claims ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis

 

Michael Ramirez, Political Commentary, “Something in the Water. ”From...
https://michaelramirez.substack.com/
 
“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.
 
JOBLESS CLAIMS (Reuters)
“The number of Americans filing new applications for unemployment benefits rose slightly last week, pointing to steadily easing labor market conditions heading into the final stretch of 2024... Claims remain low by long-run standards, but still high enough to perpetuate the rising trend in the unemployment rate, given very modest hiring," said Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics. Initial claims for state unemployment benefits rose 9,000 to a seasonally adjusted 224,000 for the week ended Nov. 30...” Story at...
https://www.reuters.com/markets/us/us-weekly-jobless-claims-rise-moderately-2024-12-05/
 
PAYROLL REPORT / UNEMPLOYENT RATE (CNBC)
“Nonfarm payrolls increased by 227,000 for the month, compared with an upwardly revised 36,000 in October and the Dow Jones consensus estimate for 214,000... The unemployment rate edged higher to 4.2%, as expected.”  Story at... 
https://www.cnbc.com/2024/12/06/jobs-report-november-2024.html
 
UNIV MICHIGAN SENTIMENT (Trading Economics)
“The University of Michigan consumer sentiment for the US increased for a fifth consecutive month to 74 in December 2024, the highest level since April, compared to 71.8 in November and above forecasts of 73, preliminary estimates showed.” Story at... 
https://tradingeconomics.com/united-states/consumer-confidence
 
MARKET REPORT / ANALYSIS
-Friday the S&P 500 rose about 0.3% to 6090.
-VIX declined about 6% to 12.77.
-The yield on the 10-year Treasury declined (compared to about this time, prior trading day) to 4.149%.
 
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, 11 gave Bear-signs and 12 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) improved to +1 (1 more Bull indicator than Bear indicators).
 
TODAY’S COMMENT
Today’s Bull-Bear spread of +1 is Neutral. The 10-dMA of the 50-Indicator Spread (purple line in the chart above) is moving higher today so that is still bullish. The overall 50-Indicator spread signal is Bullish. (I follow the 10-dMA for trading buy-signals and as an indicator for sell signals.)
 
Repeating, more or less... The S&P 500 closed at a new all-time high Friday and again, about 5% of issues on the NYSE made new, 52-week highs today. Breadth has narrowed, but the number at the close did not give a bear sign. It doesn’t feel like there is significant trouble ahead, but I’ll be following the indicators rather than guessing.
 
There are 2 top-indicators warning of a top – breadth is too far ahead of the S&P 500 and RSI was overbought.  The ensemble of top-indicators is not yet suggesting we need to do anything more than pay attention - so no point in worrying about it yet.
 
If more top indicators start acting up, I may be forced to take profits in leveraged positions (SSO, QLD, & UWM), especially if the S&P 500 is at its upper trend line.
 
For now, I won’t be making any changes in the portfolio. A noted earlier, a few down days would be good for the markets.
 
BOTTOM LINE
I’m cautiously bullish.
 
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
 
FRIDAY MARKET INTERNALS (NYSE DATA)

My basket of Market Internals remained HOLD. (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.