Best DOW Stocks ... Best ETFs … Stock Market Analysis ... University of Michigan Sentiment

 

 Political commentary at...
https://michaelpramirez.com/index.html
 
“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
“We are experiencing a near total failure of leadership in our country. Politicians on both sides are fueling rage for personal and political advantage. It is a dangerous and craven form of demagoguery. James Freeman Clarke once said that “a politician thinks of the next election; a statesman thinks of the next generation.” We have far too many politicians today and far too few statesmen at an increasingly perilous time for our country.” – Jonathan Turley, Shapiro Chair for Public Interest Law at the George Washington University Law School. From...
https://jonathanturley.org/2022/09/08/a-dangerous-escalation-fifty-six-percent-of-voters-president-biden-sought-to-incite-conflict/#more-193577
 
FED EX CEO PREDICTS WORLDWIDE RECESSION (CNBC)
“We’re seeing...volume decline in every segment around the world, and so you know, we’ve just started our second quarter,” he said. “The weekly numbers are not looking so good, so we just assume at this point that the economic conditions are not really good. We are a reflection of everybody else’s business, especially the high-value economy in the world...” Story at...
https://www.cnbc.com/2022/09/15/fedex-ceo-says-he-expects-the-economy-to-enter-a-worldwide-recession.html
Fed EX closed down 21% today and the news dragged down markets.
 
UNIVERSITY OF MICHIGAN SENTIMENT (Univ of Michigan)
“Consumer sentiment was essentially unchanged in September, just 1.3 index points above August. The one-year economic outlook continued lifting from the extremely low readings earlier in the summer, but these gains were largely offset by modest declines in the long run outlook. Personal finance components of the index as well as buying conditions for durables remained at similar, relatively low levels from last month. After the marked improvement in sentiment in August, consumers showed signs of uncertainty over the trajectory of the economy.” Report at...
https://search.yahoo.com/search?fr=mcafee&type=E211US0G0&p=2022SepAugSepM-MY-Y202220222021ChangeChangeIndex+of+Consumer+Sentiment59.558.272.8%2B2.2%25-18.3%25Current+Economic+Conditions58.958.680.1%2B0.5%25-26.5%25Index+of+Consumer+Expectations59.958.068.1%2B3.3%25-12.0%25
 
MARKET REPORT / ANALYSIS
-Friday the S&P 500 fell about 0.7% to 3873.
-VIX rose about 0.1% to 26.30.
-The yield on the 10-year Treasury slipped slightly to 3.453%.  
 
PULLBACK DATA:
-Drop from Top: 19.2% as of today. 23.6% max.
-Trading Days since Top: 177-days.
The S&P 500 is 9% Below its 200-dMA & 4.2% Below its 50-dMA.
Support looks like the prior low, 3667.
 
*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:
Friday was an options expiration day and there was extremely high volume (about twice the average for the month) on the NYSE. Most of that volume came late in the day and it rescued the markets from huge declines.  Instead, declines were moderate.
 
On Fridays, I summarize a number of indicators to get a weekly feel for trend. The Friday rundown of indicators turned sharply bearish (20-bear and 2-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
-The smoothed advancing volume on the NYSE is rising.
-The longer-term, 50-dEMA, Fosback Hi-Low Logic Index is Bullish.
 
NEUTRAL
-Overbought/Oversold Index (Advance/Decline Ratio).  
-There have been 2 Statistically-Significant day (big moves in price-volume) in the last 15-days...neutral.
-Sentiment.
-The 50-dMA percentage of issues advancing on the NYSE (Breadth) is below 50%, but it takes 3 days in a row below 50% for my “correction-now” signal. – It hardly matters now.
-Bollinger Bands.
-RSI
-Issues advancing on the NYSE (Breadth) compared to the S&P 500 now neutral.
-The size of up-moves has been smaller than the size of down-moves over the last month, but not enough to send a signal.
-The short-term, 10-day, Fosback Hi-Low Logic Index.
-There have been 8 up-days over the last 20 sessions –neutral.
-There have been 5 up-days over the last 10 sessions – neutral.
-The S&P 500 is 8.5% 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 - expired.
-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.
-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
-Slope of the 40-dMA of New-highs is flat. This is one of my favorite trend indicators.
- 51% of the 15-ETFs that I track have been up over the last 10-days.
 
BEAR SIGNS
-13 Sept was a bearish, 90%-down-volume day.
-The 10-dMA percentage of issues advancing on the NYSE (Breadth) is below 50%.
-The 50-dMA percentage of issues advancing on the NYSE (Breadth) is below 50.
-The 100-dMA percentage of issues advancing on the NYSE (Breadth) is below 50%
-MACD of the percentage of issues advancing on the NYSE (breadth) made a bearish crossover 30 Aug.
-MACD of S&P 500 price made a bearish crossover 22 Aug.
-26 Aug was a Bearish Outside Reversal Day.
-Smoothed Buying Pressure minus Selling Pressure is falling.
-The 5-10-20 Timer System is SELL; the 5-dEMA and 10-dEMA are both below the 20-dEMA. (The 5-day is below the 10-day so short-term momentum is bearish too.)
-There have been 8 Distribution Days over the last 4 weeks.
-VIX is rising quickly.
-My Money Trend indicator is falling.
-McClellan Oscillator is negative.
-The Calm-before-the-Storm/Panic Indicator warned on 13 September and remains in effect for 6 days.
-The graph of the 100-day Count (the 100-day sum of up-days) is falling.
-The Smart Money (late-day action) is down.
-Long-term new-high/new-low data.
-Short-term new-high/new-low data.
-Cyclical Industrials (XLI-ETF) are under-performing the S&P 500 and falling sharply so I’ll call it bearish.
-S&P 500 is sharply underperforming the Utilities (XLU).
 
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 20 bear-signs and 2-Bull. Last week, there were 12 bear-signs and 10 bull-signs. Friday indicators are giving an extreme bearish indication.
 
Today, the daily sum of 20 Indicators declined from -2 to -3 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations declined from +21 to +19. (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 SELL: VOLUME and the Panic Indicator are bearish; SENTIMENT, PRICE & VIX are neutral. 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.”
 
Carter Worth was on the Options Action show on CNBC and charted a test of the prior low with a possible final low in the vicinity of 3300. For now, he said, “This just isn’t over.”
 
I have been saying for a while that I think we remain in a selling stampede. Maybe-maybe not. Selling stampedes usually last 17 – 25 sessions, with only 1.5-to three-day pauses/throwback rallies, before they exhaust themselves on the downside. As of today, this downturn has lasted 21-days, but we might need to start a new count since we did recently have 4 up-days in a row.
 
I’m a Bear; a retest of the prior lows (or close to the lows) seems likely.
 
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 NEUTRAL.
 
(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.