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.
