“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
https://michaelpramirez.com/index.html
FOMC MINUTES (Reuters)
“Federal Reserve officials said last month that the pace of future interest rate increases would hinge on incoming data, with some saying rates would need to stay at a "sufficiently restrictive level" for "some time" in order to control inflation, according to the minutes of the July 26-27 session. Participants at the session said it may take longer than anticipated for inflation to dissipate, and that a slowdown in aggregate demand engineered by the central bank "would play an important role in reducing inflation pressures," said the minutes, which were released on Wednesday.” Story at...
https://www.reuters.com/markets/us/fed-minutes-may-hint-rationale-size-coming-rate-hikes-2022-08-17/
The S&P 500 immediately improved after the minutes of the FMC meeting were released. No new news is good news, I guess.
RETAIL SALES (CNBC)
“Retail activity was flat in July as falling fuel prices held back gas station sales and consumers turned more heavily to online shopping, the Census Bureau reported Wednesday. While advance retail sales were unchanged, total receipts excluding autos rose 0.4%.” Story at...
https://www.cnbc.com/2022/08/17/retail-sales-july-2022.html
CRUDE OIL INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 7.1 million barrels from the previous week. At 425.0 million barrels, U.S. crude oil inventories are about 6% below the five year average for this time of year.” Story at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf
“Changes to both production and consumption of global liquid fuels have changed our forecast for balances between the two for the rest of 2022 and 2023. For most of 2021, more liquid fuels were consumed globally than produced. Starting in the second quarter of 2022, global liquid fuels production rose above consumption. According to our August Short-Term Energy Outlook, we expect that during 2023, global supply and demand will be very closely matched.” – EIA.
BURRY’S SURPRISING DECISION (Yahoo Finance)
“Scion Asset Management, his [Michael “Big Short” Burry’s] firm, liquidated its entire portfolio of U.S. stocks as of June 30... Burry thinks...that the worst is yet to come. He says he foresees a household debt crisis that would pose a serious danger to the economy.” Story at...
https://www.thestreet.com/investing/mr-big-short-michael-burry-makes-a-shocking-decision?puc=yahoo&cm_ven=YAHOO
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 fell about 0.7% to 4274.
-VIX rose about 1% 19.90.
-The yield on the 10-year Treasury rose to 2.900%.
PULLBACK DATA:
-Drop from Top: 10.9% as of today. 23.6% max.
-Trading Days since Top: 157-days.
The S&P 500 is 1.2% Below its 200-dMA & closed 7.9% Above its 50-dMA.
-Resistance points for the rally, are: (1) 4325 & 4350, the 200-dMA & upper longer-term trend line, respectively; (2) or 4370, the 62% Fibonacci retracement point for those who believe in that sort of thing.
The S&P 500 closed at its 57% retracement level
Tuesday. 50% is about what we normally see in bounces during corrections, but
that is only a rough guide.
*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.
SSO, 2xLong S&P 500 ETF - SOLD.
TODAY’S COMMENT:
The downward sloping red line below zero indicates that Utilities
are outperforming the S&P 500 and getting more bearish. This suggests
investors are worried and may be tlling us they are shifting toward a risk-off
positioning. Other signs are more bearish too.
Breadth indicators are falling; XLI is turning more
bearish relative the S&P 500; junk bonds are falling; my money trend is
turning down.
Unchanged volume was high again today suggesting investor
indecision and a possible turning point when considering that this is the
second day in a row with above normal unchanged volume (yesterday was very
high).
Yesterday the Index traded up to its 200-dMA, but was
unable to push above it.
It could be that the Index topped yesterday, but I didn’t
see a smoking gun. RSI improved today and is no longer overbought. Bollinger Bands were close, but never got to
an overbought level.
Today, the daily sum of 20 Indicators slipped from +16 to
+10(a positive number is bullish; negatives are bearish); the 10-day smoothed
sum that smooths the daily fluctuations improved from +121 to +126. (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, VIX, PRICE & VOLUME are
bullish. 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 Sold SSO (2x S&P500 ETF) around mid-day. There are
enough bear worries that I figured it was time to take profits, although I didn’t
see any strong sell signals.
I’m a Bear longer-term; short-term, the bulls are probably
still in control of the markets.
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
Looking at the above chart, 80% of the ETFs are above their 120-dMA. That chart looks like there is no correction.
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 slipped to HOLD.
(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 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.
https://michaelpramirez.com/index.html
“Federal Reserve officials said last month that the pace of future interest rate increases would hinge on incoming data, with some saying rates would need to stay at a "sufficiently restrictive level" for "some time" in order to control inflation, according to the minutes of the July 26-27 session. Participants at the session said it may take longer than anticipated for inflation to dissipate, and that a slowdown in aggregate demand engineered by the central bank "would play an important role in reducing inflation pressures," said the minutes, which were released on Wednesday.” Story at...
https://www.reuters.com/markets/us/fed-minutes-may-hint-rationale-size-coming-rate-hikes-2022-08-17/
The S&P 500 immediately improved after the minutes of the FMC meeting were released. No new news is good news, I guess.
“Retail activity was flat in July as falling fuel prices held back gas station sales and consumers turned more heavily to online shopping, the Census Bureau reported Wednesday. While advance retail sales were unchanged, total receipts excluding autos rose 0.4%.” Story at...
https://www.cnbc.com/2022/08/17/retail-sales-july-2022.html
“U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 7.1 million barrels from the previous week. At 425.0 million barrels, U.S. crude oil inventories are about 6% below the five year average for this time of year.” Story at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf
“Changes to both production and consumption of global liquid fuels have changed our forecast for balances between the two for the rest of 2022 and 2023. For most of 2021, more liquid fuels were consumed globally than produced. Starting in the second quarter of 2022, global liquid fuels production rose above consumption. According to our August Short-Term Energy Outlook, we expect that during 2023, global supply and demand will be very closely matched.” – EIA.
“Scion Asset Management, his [Michael “Big Short” Burry’s] firm, liquidated its entire portfolio of U.S. stocks as of June 30... Burry thinks...that the worst is yet to come. He says he foresees a household debt crisis that would pose a serious danger to the economy.” Story at...
https://www.thestreet.com/investing/mr-big-short-michael-burry-makes-a-shocking-decision?puc=yahoo&cm_ven=YAHOO
-Wednesday the S&P 500 fell about 0.7% to 4274.
-VIX rose about 1% 19.90.
-The yield on the 10-year Treasury rose to 2.900%.
-Drop from Top: 10.9% as of today. 23.6% max.
-Trading Days since Top: 157-days.
The S&P 500 is 1.2% Below its 200-dMA & closed 7.9% Above its 50-dMA.
-Resistance points for the rally, are: (1) 4325 & 4350, the 200-dMA & upper longer-term trend line, respectively; (2) or 4370, the 62% Fibonacci retracement point for those who believe in that sort of thing.
SH, short the S&P 500 ETF.
SSO, 2xLong S&P 500 ETF - SOLD.
BEST ETFs - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily)
http://navigatethestockmarket.blogspot.com/p/exchange-traded-funds-etf-ranking.html
Looking at the above chart, 80% of the ETFs are above their 120-dMA. That chart looks like there is no correction.
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.
https://navigatethestockmarket.blogspot.com/p/a-system-for-trading-dow-30-stocks-my_8.html
