“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
“Rising energy bills have forced companies to scale back industrial operations, threatening a greater drag on the economy. As of May, electrical energy costs are up 24.4 percent from a year ago. Producer Price Index (PPI) data suggests things are getting worse.” Commentary at...
https://mishtalk.com/economics/us-industries-are-buckling-under-pressure-of-surging-electricity-costs
“Consumer sentiment moved up very slightly this month to about 5 index points above the all-time low reached in June. All components of the expectations index improved this month, particularly among low and middle income consumers for whom inflation is particularly salient... the share of consumers blaming inflation for eroding their living standards remained near 48%.” Report at...
http://www.sca.isr.umich.edu/
“...A pullback is likely coming, mild or moderate. In the strongest bull runs all we really ever see is 1-3 days on the downside before the bulls gore the bears again. And that’s what we have seen for 6 weeks. While the easiest money has been made the rally should roll on into September.” – Paul Schatz, President, Heritage Capital. Commentary at...
https://investfortomorrow.com/blog/face-ripping-rally/
“...one strategist argues markets aren't out of the woods just yet ...While that might very well be the case [that inflation has peaked]," Agati [PNC Asset Management Chief Investment Officer Amanda Agati] said, "the market has rallied an awful lot assuming that the Fed's forward guidance and ultimately the terminal rate assigned by the current dot plot is really where policy is going to ultimately end... I think the Fed is very much fixated on needing to do more, and that's a very vague term." Story at...
https://finance.yahoo.com/news/inflation-one-data-point-does-not-make-a-trend-strategist-says-172847141.html
“Researchers at Lawrence Livermore National Laboratory's (LLNL's) National Ignition Facility (NIF) recorded the first case of ignition on August 8, 2021, the results of which have now been published in three peer-reviewed papers... Ignition during a fusion reaction essentially means that the reaction itself produced enough energy to be self-sustaining, which would be necessary in the use of fusion to generate electricity... In this latest milestone at the LLNL, researchers recorded an energy yield of more than 1.3 megajoules (MJ) during only a few nanoseconds.” Story at...
Nuclear Fusion Breakthrough Confirmed: California Team Achieved Ignition (msn.com)
It’s an important start.
-Friday the S&P 500 rose about 1.7% to 4280.
-VIX fell about 3% 19.53.
-The yield on the 10-year Treasury slipped to 2.844%.
-Drop from Top: 10.8% as of today. 23.6% max.
-Trading Days since Top: 153-days.
The S&P 500 is 1.1% Below its 200-dMA & closed 8.3% Above its 50-dMA.
-Resistance points for the rally, are: (1) 4342 & 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. Can’t seem to trim my short position, but instead, I am trading against it with SSO.
SSO, 2xLong S&P 500 ETF.
As shown in the chart below, the S&P 500 has broken above its short-term trend line (black) and its June highs (dashed blue line) and is headed for its correction trendline shown in green. At the same time, the % of issues advancing on the NYSE (in red) has also moved up and broken its downward sloping trendline (also in red). Now there is a concern for the bulls. The % of advancing issues has stalled at the 50% level. If it can’t break higher the rally will fail. In another indicator, MACD of Breadth (% of issues advancing on the NYSE) has given a bearish signal.
At this point, the key indicators are Bollinger Bands and RSI. They are both nearly overbought. When they are both overbought, it will be time to close out long, trading-positions, especially if it coincides with a big up-day on high volume. That would signal a blow-off top.
-The 10-dMA % of issues advancing on the NYSE (Breadth) is above 50%.
-The 50-dMA percentage of issues advancing on the NYSE (Breadth) is above 50.
-The 100-dMA percentage of issues advancing on the NYSE (Breadth) is above 50%
-MACD of S&P 500 price made a bullish crossover 24 June.
-The longer-term, 50-dEMA, Fosback Hi-Low Logic Index is Bullish.
-Short-term new-high/new-low data.
-Long-term new-high/new-low data.
-McClellan Oscillator is positive.
-The 5-10-20 Timer System is BUY; the 5-dEMA and 10-dEMA are both ABOVE the 20-dEMA.
-The size of up-moves has been larger than the size of down-moves over the last month.
-The smoothed advancing volume on the NYSE is rising.
-Cyclical Industrials (XLI-ETF) are out-performing the S&P 500.
-Buying Pressure minus Selling Pressure is rising.
-VIX.
-There was a 90% Up-volume days 10 August.
-Slope of the 40-dMA of New-highs is rising. This is one of my favorite trend indicators.
-The Smart Money (late-day action) is headed up.
-59% of the 15-ETFs that I track have been up over the last 10-days.
-Sentiment.
-Bollinger Bands but close to overbought.
-RSI
-The short-term, 10-day, Fosback Hi-Low Logic Index.
-The 50-dMA percentage of issues advancing on the NYSE (Breadth) popped above 50% ending its streak of consecutive days. (3 days in a row is my “correction-now” signal)
-There was a Follow-thru Day 10 August cancelling prior Distribution Days
-Issues advancing on the NYSE (Breadth) compared to the S&P 500.
-There have been 3 Statistically Significant days (big moves in price-volume) in the last 15-days.
-The S&P 500 is 1.1% 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 4-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.
-1 July was a Bullish Outside Reversal Day – expired.
-There have been 10 up-days over the last 20 sessions –neutral.
-There have been 3 up-days over the last 10 sessions – neutral.
-My Money Trend indicator is flat.
-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
-The graph of the 100-day Count (the 100-day sum of up-days) is falling sharply.
-Overbought/Oversold Index (Advance/Decline Ratio).
-S&P 500 is underperforming the Utilities (XLU), and quickly turning more bearish.
-MACD of the percentage of issues advancing on the NYSE (breadth) made a bearish crossover 9 Aug.
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 4 bear-signs and 18-Bull. Last week, there were 5 bear-signs and 14
bull-signs.
Today, the daily sum of 20 Indicators remained +16 (a
positive number is bullish; negatives are bearish); the 10-day smoothed sum
that smooths the daily fluctuations improved from +107 to +110. (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. With a more bullish 10-dMA, the call is muddied regarding
whether the Index made a top on 9 August.
LONG-TERM INDICATOR: The Long
Term NTSM indicator remained BUY: VIX, PRICE & VOLUME are bullish;
SENTIMENT is 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.”
We got a very bullish Friday run-down of indicators. The Index is within striking distance of its
200-dMA. We may see a slow down as it tries
to work its way above that level. As noted above, the key indicators are
Bollinger Bands and RSI. They are both
nearly overbought. When they are both overbought, it will be time to close out long,
trading-positions.
I’m a Bear longer-term; short-term, the bulls are back 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
FRIDAY MARKET INTERNALS (NYSE
DATA)
My basket of Market Internals remained 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.)
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.
For more details, see NTSM Page at…
https://navigatethestockmarket.blogspot.com/p/a-system-for-trading-dow-30-stocks-my_8.html
