Best DOW Stocks ... Best ETFs … Stock Market Analysis ...Small Business Optimism
“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
NFIB SMALL BUSINESS OPTIMISM (NFIB)
“The NFIB Small Business Optimism Index dropped 3.6
points in June to 89.5, marking the sixth consecutive month below the 48-year
average of 98. Small business owners expecting better business conditions over
the next six months decreased seven points to a net negative 61%, the lowest
level recorded in the 48-year survey...’On top of the immediate challenges
facing small business owners including inflation and worker shortages, the
outlook for economic policy is not encouraging either as policy talks have shifted
to tax increases and more regulations.’” Press release at...
https://www.nfib.com/content/press-release/economy/small-business-expectations-for-future-conditions-hit-all-time-low/
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 slipped about 0.9% to 3819.
-VIX increased about 4% to 27.29.
-The yield on the 10-year Treasury slipped to 2.985%.
PULLBACK DATA:
-Drop from Top: 20.4% as of today. 23.6% max.
-Trading Days since Top: 130-days.
The S&P 500 is 12.7% BELOW its 200-dMA & 3.5%
BELOW its 50-dMA.
*I won’t call the correction over until the S&P 500
makes a new-high; however, we hope to be able to call the bottom when we see
it.
MY TRADING POSITIONS:
SH
I added a small short position 7/11. I’ll add more if market declines
continue. Calling a top in this market
is nearly impossible so I am scaling into a position in SH, short the S&P
500 ETF.
TODAY’S COMMENT:
As we guessed, we got more choppy trading Tuesday. It’s
all about the CPI now. Markets don’t
always move as expected, so guessing how they will move isn’t important. We’ll just have to watch the market reaction
tomorrow morning.
Today, the daily sum of 20 Indicators improved from -3 to
-2 (a positive number is bullish; negatives are bearish); the 10-day smoothed
sum that smooths the daily fluctuations declined from +59 to +47. (The trend
direction is more important than the actual number for the 10-day value.) These
numbers sometimes change after I post the blog based on data that comes in
late. Most of these 20 indicators are short-term so they tend to bounce
around a lot.
LONG-TERM INDICATOR: The Long
Term NTSM indicator remained BUY: SENTIMENT, PRICE, & VIX are bullish;
VOLUME is neutral. While this is a strong bullish indication, it means that the
markets have been strong. I don’t
consider this a good time to buy since I expect the S&P 500 to retreat to
its prior low and possibly make new lows. (Depends on recession; or
no-recession.)
I’m a Bear, longer-term. In the short-term, I am in
wait-and-see mode. This week may give some clues regarding the direction of the
markets. Everyone is waiting for CPI at 0830 Wednesday morning.
BEST ETFs - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs
(Ranked Daily)
Highest ranked ETFs are
conservative, “investors-are-playing-defense,” leaders.
*For additional background on
the ETF ranking system see NTSM Page at…
http://navigatethestockmarket.blogspot.com/p/exchange-traded-funds-etf-ranking.html
BEST DOW STOCKS - TODAY’S MOMENTUM
RANKING OF THE DOW 30 STOCKS (Ranked Daily)
Here’s the revised DOW 30 and
its momentum analysis. 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
TUESDAY MARKET INTERNALS (NYSE
DATA)
My basket of Market Internals are still signaling SELL.
Market Internals are a decent
trend-following analysis of current market action, but should not be used alone
for short term trading. They are usually right, but they are often late. They are most useful when they diverge from
the Index.
My stock-allocation in the
portfolio is roughly 30% invested in stocks.
I trade about 15-20% of the
total portfolio using the momentum-based analysis I provide here. If I can see
a definitive bottom, I’ll add a lot more stocks to the portfolio using an
S&P 500 ETF.
You may wish to have a higher
or lower % invested in stocks depending on your risk tolerance. 50% is a
conservative position that I consider fully invested for most retirees.
As a general rule, some
suggest that the % of portfolio invested in the stock market should be one’s
age subtracted from 100. So, a
30-year-old person would have 70% of the portfolio in stocks, stock mutual
funds and/or stock ETFs. That’s ok, but
for older investors, I usually don’t recommend keeping less than 50% invested
in stocks (as a fully invested position) since most people need some growth in
the portfolio to keep up with inflation.
