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“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
“With recent spending bills, including the student loan forgiveness, now approaching $2 trillion this year, we have the emergence of the Fiscal Put...Not just for COVID anymore. And will be as good for America’s economy as sugar for babies.”  – Michael “Big Short” Burry.

 Political commentary at...
https://michaelpramirez.com/index.html
 
ADP EMPLOYMENT CHANGE (CNBC)
“Companies sharply slowed the pace of hiring in August amid growing fears of an economic slowdown, according to payroll processing company ADP. Private payrolls grew by just 132,000 for the month, a deceleration from the 268,000 gain in July...” Story at...
https://www.cnbc.com/2022/08/31/adp-jobs-report-private-payrolls-grew-by-just-132000-in-august.html
 
CHICAGO PMI (Advisor Perspectives)
“The latest Chicago Purchasing Manager's Index, or the Chicago Business Barometer, inched up to 52.2 in August from 52.1 in July, which is still in expansion territory. Values above 50.0 indicate expanding manufacturing activity.” Commentary at...
https://www.advisorperspectives.com/dshort/updates/2022/08/31/chicago-pmi-mostly-unchanged-in-august
 
EIA CRUDE INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 3.3 million barrels from the previous week. At 418.3 million barrels, U.S. crude oil inventories are about 6% below the five year average for this time of year.” Report at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf
 
STOCKS MAY BE HEADED FOR A MAJOR DROP (The Street.com)
“The path for stocks from here will be determined by earnings, where we still see material downside,’ Morgan Stanley strategists wrote in a commentary cited by Bloomberg. ‘As a result, equity investors should be laser focused on this risk, not the Fed.’ Meanwhile, the S&P 500’s forward price-earnings multiple trailed its five-year average, but exceeded its 10-year average as of Aug. 5: 17.5 versus 18.6 and 17, according to FactSet. A high price-earnings multiple can point to lower stock prices ahead.” Story at...
https://www.thestreet.com/investing/stocks-may-be-headed-for-a-major-skid?puc=yahoo&cm_ven=YAHOO
 
WATCH ETFs AS FED ENDS RATE HIKES (ETF trends)
“Mark Hulbert on MarketWatch pointed out that money can be made by betting on the timing of the Fed’s so-called pivot, or when central bank policymakers end interest rate hikes. Based on the previous six distinct rate-hike cycles since the Fed began focusing on the Fed funds rate, the S&P 500 reached its low an average of 57 days before the end of the central bank’s rate-hike cycle, according to Hulbert...Given the uncertainty over the timing, investors could take a dollar-cost average approach to raise equity exposure before achieving their target exposure. While you won’t get the maximum return, one shouldn’t rely on accurately predicting a low.” Commentary at...
https://www.etftrends.com/keep-an-eye-on-stock-etfs-as-the-fed-eventually-ends-the-rate-hike-cycle/
Ok, but I’ll try and call the bottom. I can’t guess when the Fed will pivot.  We try to follow investors. Curiously, I had previously heard a commentator on CNBC who said bottoms are made when the FED stops hiking.
 
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 fell about 0.8% to 3955.
-VIX dropped (??!!) about 1% to 25.87. (Maybe the Options Folks think a bounce is due?)
-The yield on the 10-year Treasury rose to 3.194%.
 
PULLBACK DATA:
-Drop from Top: 17.5% as of today. 23.6% max.
-Trading Days since Top: 166-days.
The S&P 500 is 8% Below its 200-dMA & 1.5% Below its 50-dMA.
- Support points for the rally are around 3900, the early July highs, and the prior correction low of 3667. We will test the prior correctio low.
 
*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.
SDS, 2x short S&P 500 ETF.
I have built these positions to significantly large values, although I am still not net short.
 
TODAY’S COMMENT:
There have only been 3 up days in the last 10 and 7 in the last 20. The S&P 500 has dropped precipitously over the last 11 days with only 3 up-days. Wednesday was the 4^th down day in a row. That’s usually a bullish indication.  Markets don’t go down forever. But, as Jeffrey Saut wrote during another correction several years ago, “we could be in one of these ‘selling stampedes’ that tend to last 17 – 25 sessions, with only 1.5- to three-day pauses/throwback rallies, before they exhaust themselves on the downside.” Saut noted, “...that once the markets get into one of these weekly downside skeins, they rarely bottom on a Friday. Nope, they typically give participants over the weekend to brood about their losses and then they show up the next Monday in sell mode leading to Turning Tuesday.”
 
Based on Jeff Saut’s comments, we could be about half way through the current downdraft before we see some sort of reversal. On the other hand, there are a number of oversold indications suggesting we might see a bounce soon. RSI, Bollinger Bands and the 50-dEMA Fosback Logic indicators are all suggesting a short-term bottom. I think it won’t be a bottom, but rather a bounce for a few days at most.
 
A retest of the low is still in order.
 
Today, the daily sum of 20 Indicators improved from -2 to +2 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations slipped from +11 to +3. (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 declined to HOLD: PRICE is bullish; SENTIMENT & VIX are neutral; VOLUME is bearish. I expect the S&P 500 to test its prior low of 3667. Remember for the longer-term, one indicator trumps them all – “Don’t fight the FED.”
 
I’m a Bear; a retest of the prior lows (or close to the lows) seems very likely now. It’s only about 7% below today’s close.
 
BEST ETFs - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily)

*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
 
WEDNESDAY MARKET INTERNALS (NYSE DATA)

My basket of Market Internals remained 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 most useful when they diverge from the Index.) 

 

 My stock-allocation in the portfolio is now 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.
 

Best DOW Stocks ... Best ETFs … Stock Market Analysis ... FHFA Housing Price Index ... Consumer Confidence ... JOLTS Job Openings

 

Political commentary at...
https://michaelpramirez.com/index.html
...and Ramirez is a Conservative cartoonist.  Answering the question, "When did the GOP become jackasses?" When Sean Hannity (and other talk-show hosts) chose to sell their souls to Trump and lie about the election to non-critical-thinking, Trump-loving, suckers.
 
“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
FHFA HOUSING PRICE INDEX (Advisor Perspectives)
“U.S. house prices rose 17.7 percent from the second quarter of 2021 to the second quarter of 2022 according to the Federal Housing Finance Agency House Price Index (FHFA HPI®). House prices were up 4.0 percent compared to the first quarter of 2022. FHFA’s seasonally adjusted monthly index for June was up 0.1 percent from May.” Details at...
https://www.advisorperspectives.com/dshort/updates/2022/08/30/fhfa-house-price-index-up-just-0-1-in-june
 
CONSUMER CONFIDENCE (Confidence Board via prnewswire)
“The Conference Board Consumer Confidence Index® increased in August, following three consecutive monthly declines. The Index now stands at 103.2 (1985=100), up from 95.3 in July. The Present Situation Index—based on consumers' assessment of current business and labor market conditions—improved to 145.4 from 139.7 last month. The Expectations Index—based on consumers' short-term outlook for income, business, and labor market conditions—increased to 75.1 from 65.6... Looking ahead, August's improvement in confidence may help support spending, but inflation and additional rate hikes still pose risks to economic growth in the short term."  Press release at
https://www.prnewswire.com/news-releases/consumer-confidence-improved-in-august-301614705.html
 
JOLTS JOB OPENINGS (CNBC)
“There were nearly 1 million more job openings than expected in July, an inflationary sign that the U.S. labor market is still extremely tight, the Bureau of Labor Statistics reported Tuesday. Available positions totaled 11.24 million for the month...signs that hiring demand remains robust indicate that the rate increases may not be slowing growth as much as the Fed has hoped. Traders upped their bets that the Fed will enact a third consecutive three-quarter point interest rate hike at its September meeting.” Story at...
https://www.cnbc.com/2022/08/30/jolts-july-2022.html
 
FED PUSHES BACK ON MARKET EXPECTATIONS OF A RATE CUT NEXT YEAR (CNBC)
“New York Federal Reserve President John Williams said Tuesday he expects interest rates to continue higher and to remain at those levels until inflation is subdued. Echoing recent comments from Fed Chair Jerome Powell, Williams told The Wall Street Journal that he also is in the higher-for-longer camp when it comes to monetary policy.” Story at...
https://www.cnbc.com/2022/08/30/feds-williams-pushes-back-on-market-expectations-of-a-rate-cut-next-year.html
 
ONE WHOPPER OF A CORRECTION (CNBC)
“The U.S. economy is going to fall into a recession next year, according to Steve Hanke, a professor of applied economics at Johns Hopkins University, and that’s not necessarily because of higher interest rates. ‘We will have a recession because we’ve had five months of zero M2 growth, money supply growth, and the Fed isn’t even looking at it...’” Story at...
https://www.cnbc.com/2022/08/30/steve-hanke-were-going-to-have-one-whopper-of-a-recession-in-2023.html
 
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 fell about 1.1% to 3986.
-VIX was unchanged at 26.21.
-The yield on the 10-year Treasury rose to 3.110%.
 
PULLBACK DATA:
-Drop from Top: 16.9% as of today. 23.6% max.
-Trading Days since Top: 165-days.
The S&P 500 is 7.3% Below its 200-dMA & 0.6% Below its 50-dMA.
- Support points for the rally are around 3900, the early July highs, and the prior correction low of 3667. We will test the prior correctio low.
 
*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.
SDS, 2x short S&P 500 ETF.
I have built these positions to significantly large values, although I am still not net short.
 
TODAY’S COMMENT:
Market internals have deteriorated markedly in the last week or so.  New-52-week-lows are now exceeding 100 (147) while 2 weeks ago they were 21.
 
Price, too, is clearly in freefall for the time being suggesting a retest of the lows.  With recession being discussed more recently, it is possible that this downturn could really get ugly. I will admit with short positions in place, I am as bearishly positioned as I have ever been in my investing career. I’ve seen crashes in 1987, 2001, and 2007. The current downturn shares some similarity to 2001. We have irrational exuberance (high valuations) and an economy that is too hot (unemployment at record lows). This time we have the added problems of high inflation, high demand and low supply caused by supply chain shortfalls. Past major downturns have been in the 50% zone and a 50% drop from the top (about 33% below today’s close) is possible. I’d rather not guess.  Let’s just see what happens at the retest of the low.
 
There have been 4 Distribution Days in the last 8 sessions.  It is supposed to take 6 Distribution days over a three-week period to send a bear signal. Still, this looks like a pretty good bearish signal to me.
 
Today, the daily sum of 20 Indicators improved from -5 to -2 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations slipped from +29 to +11. (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 declined to HOLD: PRICE is bullish; SENTIMENT & VIX are neutral; VOLUME is bearish. I expect the S&P 500 to test its prior low of 3667. Remember for the longer-term, one indicator trumps them all – “Don’t fight the FED.”
 
There were some bullish signs today:
Bollinger Bands & Advance/Decline Ratio is now oversold so we might expect an up-day tomorrow. Of course, we have been expecting an up-day for the last 2 days based on the big down-day Friday. That hasn’t worked out. On the other side, the S&P 500 chart doesn’t look good – the Index broke down below the 50-dMA today.
 
I’m a Bear; a retest of the prior lows (or close to the lows) seems very likely now. It’s only about 7% below today’s close.
 
BEST ETFs - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily)

*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 remained 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 most useful when they diverge from the Index.) 
 
 

My stock-allocation in the portfolio is now 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.
 

Best DOW Stocks ... Best ETFs … Stock Market Analysis ...

In an effort to turn Virginia into California, liberal politicians who previously ran our government sold Virginia out by subjecting Virginia drivers to California vehicle laws. Now, under that pact, Virginians will be forced to adopt the California law that prohibits the sale of gas and diesel-fueled vehicles. I am already at work to prevent this ridiculous edict from being forced on Virginians. California’s out of touch laws have no place in our Commonwealth.” - Governor Glenn Youngkin.

 “Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
DANGEROUS ASSUMPTION EMBEDDED IN TODAY’S P/E RATIOS (The Felder Report)
“Today, the S&P 500 Index sports a price-to-earnings ratio of 21 on trailing 12-months’ operating earnings and 18 on analyst estimates of operating earnings over the next 12 months. Relative to the past five years, these levels are about average, leading many investors to the conclusion that stocks, after their decline so far this year, are now fairly valued... if profit margins fall, it will quickly become apparent that earnings were over-inflated and thus price-to-earnings ratios were misleadingly low. As my friend, John Hussman, points out (and small businesses have been suggesting for months now) there is a compelling case to be made that this is precisely the case.” Commentary at...
https://thefelderreport.com/2022/08/17/the-dangerous-assumption-embedded-in-todays-p-e-ratios/
 
MARKET REPORT / ANALYSIS
-Monday the S&P 500 fell about 0.7%% to 4031.
-VIX rose about 3% to 26.21.
-The yield on the 10-year Treasury was little changed at 3.090%.
 
PULLBACK DATA:
-Drop from Top: 16% as of today. 23.6% max.
-Trading Days since Top: 164-days.
The S&P 500 is 6.4% Below its 200-dMA & closed 0.7% Above its 50-dMA.
-A support point for the rally is 3996, the 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.
SDS, 2x short S&P 500 ETF.
I have built these positions to significantly large values, although I am still not net short.
 
TODAY’S COMMENT:
After the big down day Friday (-3.3%), it would not have been a surprise to seen some buying today.  That was not to be as the S&P 500 was down.  Indicators remain bearish. We might see an up-day Tuesday (futures are up as I write this), but overall, I am expecting the Index to fall and retest the June lows.  At that point we may have a better idea of whether there will be an end of the correction.
 
Today, the daily sum of 20 Indicators remained -5 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations slipped from +48 to +29. (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 declined to HOLD: PRICE is bullish; SENTIMENT & VIX are neutral; VOLUME is bearish. I expect the S&P 500 to test its prior low of 3667. Remember for the longer-term, one indicator trumps them all – “Don’t fight the FED.”
 
I’m a Bear at this point; a retest of the prior lows (or close to the lows) seems very likely at this point.
 
BEST ETFs - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily)

*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

MONDAY MARKET INTERNALS (NYSE DATA)

My basket of Market Internals remained 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 most useful when they diverge from the Index.) 
 

My stock-allocation in the portfolio is now 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.

Best DOW Stocks ... Best ETFs … Stock Market Analysis ... Powell Comments ... Personal Spending / Income ... PCE Prices

 
“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
POWELL COMMENTS FUEL 1000-POINT DOW SELLOFF (CNBC)
“Stocks plummeted Friday after Federal Reserve Chair Jerome Powell said in his Jackson Hole speech the central bank won’t back off in its fight against rapid inflation... Powell reiterated a tough stance against inflation, spurring investors to weigh the implications of higher interest rates kept in place for a longer time.” Story at...
https://www.cnbc.com/2022/08/25/stock-market-futures-open-to-close-news.html
 
PERSONAL SPENDING / INCOME (MishTalk)
“The BEA's Personal Income and Outlays report for July 2022 was weaker than expected on both the spending and income side. The saving grace from a GDP standpoint was a reported month-over-month inflation rate of -0.1 percent.” Story at...
https://mishtalk.com/economics/personal-income-and-spending-in-july-badly-miss-economists-estimates
 
PCE PRICES (CNBC)
“A key measure of inflation closely watched by U.S. policymakers showed that price increases slowed in July, the Bureau of Economic Analysis said Friday. The personal consumption expenditures price index came in with a year-over-year rise of 6.3% in July, down from 6.8% in June. The index actually fell 0.1% month over month.” Story at...
https://www.cnbc.com/2022/08/26/feds-preferred-inflation-measure-shows-price-pressures-eased-in-july.html
 
UNIV OF MICHIGAN SENTIMENT (Univ of Michigan)
“The final August reading continued the early month improvement in consumer sentiment, rising 13.0% above July but remaining 17% below a year ago. Most of this increase was concentrated in expectations, with a 59% surge in the year-ahead outlook for the economy following two months at its lowest reading since the Great Recession...” Press release at...
http://www.sca.isr.umich.edu/
 
MARKET REPORT / ANALYSIS
-Friday the S&P 500 fell about 3.4% to 4058.
-VIX rose about 17% to 25.56.
-The yield on the 10-year Treasury was little changed at 3.043%.
 
PULLBACK DATA:
-Drop from Top: 15.4% as of today. 23.6% max.
-Trading Days since Top: 163-days.
The S&P 500 is 5.8% Below its 200-dMA & closed 1.5% Above its 50-dMA.
-A support point for the rally is 3996, the 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.
SDS, 2x short S&P 500 ETF.
 
TODAY’S COMMENT:
I don’t understand why there was a surprise that the Fed is serious about inflation. Seems obvious to me. Perhaps the charts will help convince investors.
 
S&P 500 dropped below its 100-dMA support level. That’s a bearish sign. We’ll look for more deterioration next week. Only time will tell if we get it.
 
On Fridays, I summarize a number of indicators to get a weekly feel for trend. After today, it shouldn’t be too hard to guess the direction. Bull signs dropped and bear signs increased. As a result, the Friday rundown of indicators is solidly bearish (14-bear and 6-bull). These indicators tend to be both long-term and short-term, so they are different than the 20 that I report on daily. Details follow:
 
BULL SIGNS
-Overbought/Oversold Index (Advance/Decline Ratio).  
-The 50-dMA percentage of issues advancing on the NYSE (Breadth) is above 50.
-Long-term new-high/new-low data.
-The longer-term, 50-dEMA, Fosback Hi-Low Logic Index is Bullish.
-The size of up-moves has been larger than the size of down-moves over the last month.
-MACD of the percentage of issues advancing on the NYSE (breadth) made a bullish crossover 25 Aug. – go figure.
 
NEUTRAL
-There were 3 Distribution Days this week, but 3 is not enough to send a signal.
-Bollinger Bands, but close to oversold.
-VIX.
-There have been 10 up-days over the last 20 sessions –neutral.
-There have been 8 up-days over the last 10 sessions – neutral.
-Sentiment.
-RSI
-Cyclical Industrials (XLI-ETF) are out-performing the S&P 500, but falling so I’ll call it neutral.
-The 5-10-20 Timer System is HOLD; the 5-dEMA and 10-dEMA are NOT both above the 20-dEMA.
-Slope of the 40-dMA of New-highs is flat. This is one of my favorite trend indicators.
-The short-term, 10-day, Fosback Hi-Low Logic Index.
-The 50-dMA percentage of issues advancing on the NYSE (Breadth) is above 50% ending its streak of consecutive days. (3 days in a row is my “correction-now” signal)
-Cyclical Industrials (XLI-ETF) are out-performing the S&P 500, but falling so I’ll call it neutral.
-There have been 4 Statistically-Significant day (big moves in price-volume) in the last 15-days - neutral.
-The S&P 500 is 5.8% below its 200-dMA. (Bull indicator is 12% below the 200-day, although this is based on “normal” pullbacks.)
-There was an Inverse Zweig Breadth Collapse (negative Breadth Thrust) 21 June. That’s a rare, very-bearish sign, but it was several-weeks ago.
-The 52-week, New-high/new-low ratio improved by 0.7 standard deviations on 15 July – too small to send a signal.
-There was a Hindenburg Omen signal 8 April – it was canceled when the McClellan Oscillator turned bullish.
-The Calm-before-the-Storm/Panic Indicator.
-2.8% of all issues traded on the NYSE made new, 52-week highs when the S&P 500 made a new all-time-high, 3 January. (There is no bullish signal for this indicator.) This indicated that the advance was too narrow and a correction was likely to be >10%. – It proved correct, but is now Expired
-S&P 500 is underperforming the Utilities (XLU), but not by much – call this one neutral.
 
BEAR SIGNS
-The 10-dMA % of issues advancing on the NYSE (Breadth) is below 50%.
-The 100-dMA percentage of issues advancing on the NYSE (Breadth) is below 50%
-26 Aug was a Bearish Outside Reversal Day.
-26 July was a bearish, 90%-down-volume day.
-Issues advancing on the NYSE (Breadth) compared to the S&P 500 were bearish 25 Aug.  This stays in effect for 5-days.
-Buying Pressure minus Selling Pressure is falling.
-My Money Trend indicator is falling.
-MACD of S&P 500 price made a bearish crossover 22 Aug.
-Short-term new-high/new-low data.
-McClellan Oscillator is negative.
-The graph of the 100-day Count (the 100-day sum of up-days) is falling.
-The Smart Money (late-day action) is headed down.
-The smoothed advancing volume on the NYSE is falling.
-Only 45% of the 15-ETFs that I track have been up over the last 10-days.
 
On Friday, 21 February, 2 days after the top before the Coronavirus pullback, there were 10 bear-signs and 1 bull-sign. Now there are 14 bear-signs and 6-Bull. Last week, there were 9 bear-signs and 10 bull-signs.
 
That’s a fair amount of deterioration in a week. That’s two weeks of drops. The Friday rundown is solidly bearish.
 
Today, the daily sum of 20 Indicators declined from ZERO to -5 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations slipped from +69 to +48. (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 declined to HOLD: PRICE is bullish; SENTIMENT & VIX are neutral; VOLUME is bearish. I expect the S&P 500 to test its prior low of 3667. Remember for the longer-term, one indicator trumps them all – “Don’t fight the FED.”
 
I’m a Bear at this point, still expecting a retest of the prior lows.
 
BEST ETFs - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily)

*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
 
FRIDAY MARKET INTERNALS (NYSE DATA)

My basket of Market Internals remained 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 most useful when they diverge from the Index.) 
 
 

My stock-allocation in the portfolio is now 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.

Best DOW Stocks ... Best ETFs … Stock Market Analysis ... GDP ... Jobless Claims

 
“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
“Gross Domestic Product (GDP). GDP is simply the total amount of spending in an economy. GDP, as currently measured, does not distinguish between “good” spending and “bad” spending. GDP does not distinguish between consumption spending and investment spending. GDP also does not distinguish whether spending is generated by existing wealth, by going into debt temporarily, or by going into debt permanently. In this world, every dollar spent on education Jobless Claims n or new means of production, is counted the same as every dollar spent on epic bachelor parties and video games.” – Michael Lebowitz, Real Investment Advice

Cool picture of John and Ringo from the 1960s SGT Pepper cover shoot.
 
GDP – 2ND ESTIMATE (FoxBusiness)
“The U.S. economy shrank at slightly slower pace in the second quarter than previously reported, but continued to meet the criteria for a so-called technical recession as raging inflation and higher interest rates weighed on spending. Gross domestic product (GDP), the broadest measure of goods and services produced across the economy, shrank by 0.6% on an annualized basis in the second quarter...” Story at...
https://www.foxbusiness.com/economy/us-economy-shrank-slightly-slower-pace-second-quarter-revised-figures-show
 
JOBLESS CLAIMS (NY Post)
“Fewer Americans filed for unemployment benefits last week as the labor market continues to stand out as one of the strongest segments of the US economy. Applications for jobless aid for the week ending Aug. 20 fell by 2,000 to 243,000...” Story at...
https://nypost.com/2022/08/25/jobless-claims-fall-for-second-straight-week/
 
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 rose about 1.4% to 4199.
-VIX fell about 5% to 21.78.
-The yield on the 10-year Treasury remained above 3% at 3.049%.
 
PULLBACK DATA:
-Drop from Top: 12.5% as of today. 23.6% max.
-Trading Days since Top: 162-days.
The S&P 500 is 2.6% Below its 200-dMA & closed 5.2% Above its 50-dMA.
-Support points for the rally, are 4079 & 3991, the 100-dMA & 50-dMA, respectively.
 
The S&P 500 closed at its 57% retracement level 16 August. 50% is about what we normally see in bounces during corrections, but that is only a rough guide. 62% is the next higher Fibonacci retracement level, but the S&P 500 failed to cross its 200-dMA so it didn’t get there.
 
*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.
SDS, 2x short S&P 500 ETF.
 
TODAY’S COMMENT:
No fear today! Internals were strong and even the new-highs outpaced the new-lows; that hasn’t happened in a while.  What’s up? Did someone leak Powell’s speech?? One would think there would be caution before the Jackson Hole speech by the Fed chair.  Usually, there is weakness leading up to a Fed decision. While Friday won’t be a decision, the speech is widely followed. I don’t get it, but today’s action was enough to shake Bears like me into questioning their positions, especially with the strong close. There were some new bull signs...
 
My MACD analysis of Breadth turned positive. Junk Bonds turned up. Buying Pressure is outpacing selling pressure on a 50-day basis. There were still plenty of bearish signs though...
 
...The 10-dMA of issues advancing on the NYSE remained below 50% so that trend in breadth has not been broken. When looking at Issues advancing on the NYSE vs the S&P 500, as of today there is a bearish indication – the Index has gotten too far ahead of most stocks and that normally show an increased risk for a pullback. (This indicator was bullish at the June correction-low.) The McClellan Oscillator remains bearish. The short-term-internals indicator remained bearish.
 
Today, the daily sum of 20 Indicators improved from -1 to ZERO (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations slipped from +85 to +69. (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: VIX & PRICE are bullish; SENTIMENT & VOLUME are neutral. I still expect the S&P 500 to test its prior low of 3667. Remember for the longer-term, one indicator trumps them all – “Don’t fight the FED.”
 
I’m a Bear at this point, still expecting a retest of the prior lows.
 
BEST ETFs - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily)

*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
 
THURSDAY MARKET INTERNALS (NYSE DATA)

My basket of Market Internals remained 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 most useful when they diverge from the Index.) 
 
 

My stock-allocation in the portfolio is now 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.
 
 

Best DOW Stocks ... Best ETFs … Stock Market Analysis ... Durable Orders ... Pending Home Sales ... Crude Inventories

 
“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
DURABLE ORDERS (forexlive)
"US July durable goods orders 0.0% vs +0.6% expected."

Chart from...
https://www.forexlive.com/news/us-july-durable-goods-orders-00-vs-06-expected-20220824/
 
PENDING HOME SALES (NAR)
“Pending home sales decreased in June, following a slight increase in May, according to the National Association of REALTORS®. All four major regions posted month-over-month and year-over-year pullbacks, the largest of which occurred in the West...Year-over-year, transactions shrank 20.0%.”  Press release at... 
https://www.nar.realtor/newsroom/pending-home-sales-fell-8-6-in-june
 
EIA CRUDE INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 3.3 million barrels from the previous week. At 421.7 million barrels, U.S. crude oil inventories are about 6% below the five year average for this time of year.” Report at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf
This suggests demand remains strong.
 
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 rose about 0.3% to 4141.
-VIX fell about 5% to 22.82.
-The yield on the 10-year Treasury rose to 3.112%.
 
PULLBACK DATA:
-Drop from Top: 13.7% as of today. 23.6% max.
-Trading Days since Top: 161-days.
The S&P 500 is 4% Below its 200-dMA & closed 4% Above its 50-dMA.
-Support points for the rally, are 4082 & 3982, the 100-dMA & 50-dMA, respectively.
 
The S&P 500 closed at its 57% retracement level 16 August. 50% is about what we normally see in bounces during corrections, but that is only a rough guide. 62% is the next higher Fibonacci retracement level, but the S&P 500 failed to cross its 200-dMA so it didn’t get there.
 
*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.
SDS, 2x short S&P 500 ETF. (I added more Monday.)
 
TODAY’S COMMENT:
Not much new information today. After 4 down-days in a row we expected that Wednesday would be positive; it was.
 
I was surprised to see that only 1 Dow stock is above its 10-dMA. That’s not a bullish sign. A little more than a week ago 29 Dow stocks were above their 10-dMAs.
 
I report on 20 indicators daily. Here’s a plot of the 10-day SUM of 20 indicators (RED) and the S&P 500 (BLACK). The daily sum is the purple line. Peaks in the 10-day SUM have marked recent rally tops. We also note the weak peak in January that coincided with the all-time-high in the S&P 500.

Today, the daily sum of 20 Indicators declined from +1 to 11 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations slipped from +102 to +85. (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 improved to BUY: VIX & PRICE are bullish; SENTIMENT & VOLUME are neutral. I still expect the S&P 500 to test its prior low of 3667. Remember for the longer-term, one indicator trumps them all – “Don’t fight the FED.”
 
I’m a Bear at this point, still expecting a retest of the prior lows.
 
BEST ETFs - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily)

*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
 
WEDNESDAY MARKET INTERNALS (NYSE DATA)

My basket of Market Internals dropped back to 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 most useful when they diverge from the Index.) 
 
 

My stock-allocation in the portfolio is now roughly 30% 40% invested in stocks, although technically, SSO isn’t a stock, but an options-based ETF.
 
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.