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.