Best DOW Stocks ... Best ETFs … Stock Market Analysis ... Consumer Confidence ... New Home Sales

 
“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
CONSUMER CONFIDENCE (Conference Board)
“The Conference Board Consumer Confidence Index® decreased in July, following a larger decline in June. The Index now stands at 95.7 (1985=100), down 2.7 points from 98.4 in June... “Consumer confidence fell for a third consecutive month in July,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “The decrease was driven primarily by a decline in the Present Situation Index—a sign growth has slowed at the start of Q3. The Expectations Index held relatively steady, but remained well below a reading of 80, suggesting recession risks persist.” Report at...
https://www.conference-board.org/topics/consumer-confidence/press/CCI-July-2022
 
NEW HOME SALES (Forbes)
“New home sales unexpectedly plunged much more than economists projected in June, according to data released Tuesday, adding to signs that the housing market is abruptly unraveling pandemic-era gains as experts start to worry the downturn could spill over into the broader economy—potentially even triggering a recession... In a note to clients last week, Bank of America economist Michael Gapen downgraded his economic forecast as a result of the steeper-than-expected housing market decline, saying gross domestic product likely shrank 1.5% last quarter.” Story at...
https://www.forbes.com/sites/jonathanponciano/2022/07/26/housing-market-collapse-deepening-fast-new-home-sales-crater-again-as-experts-worry-downturn-could-spark-recession/?sh=5419fca015de
 
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 fell about 1.2% to 3921.
-VIX rose about 6% to 24.69. (VIX bucked trend today)
-The yield on the 10-year Treasury rose to 2.810%.
 
PULLBACK DATA:
-Drop from Top: 18.3% as of today. 23.6% max.
-Trading Days since Top: 140-days.
The S&P 500 is 9.9% BELOW its 200-dMA & closed ON 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, short the S&P 500 ETF.
 
TODAY’S COMMENT:
Microsoft (MSFT) missed on revenue and earnings, but issued an optimistic forecast – it was up in after-hours trading and finished above its closing price. Alphabet (GOOG) missed on revenue and earnings and issued an uncertain future based on the economic environment. It too was up in after-hours trading and finished higher than its price at the close. As Paul Schatz noted yesterday, rising stocks on bad news is very bullish. Futures were up as I write this. Let’s see how the market trades tomorrow as the FED makes its interest rate decision at 2PM. 75 basis point is the expectation, but will Powell tip the Fed’s hand for future hikes?
 
This still looks like a rally in a bear market to me.
 
Today, the daily sum of 20 Indicators advanced from +7 to +10 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations improved from +54 to +67. (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: PRICE, SENTIMENT & VOLUME are bullish; VIX is neutral. I still expect the S&P 500 to test its prior low of 3667, but it may be possible to trade this market now, but remember, one indicator trumps them all – “Don’t fight the FED.”
 
I’m a Bear although it is possible that the rally will get to the 100-dMA and it is not impossible for the Index to reach the 200-dMA.
 
BEST ETFs - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily)
My chart of this data is looking funky again. The top four ETF ranking follows:
(1)  IBB (2) XLV (3) XLU (4) XLE
*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 improved to BUY.
 
(Market Internals are 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 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.