Best DOW Stocks ... Best ETFs … Stock Market Analysis ... Durable Orders ... Consumer Confidence ... New Home Sales

 
“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
DURABLE ORDERS (Nasdaq.com)
“The Commerce Department said durable goods orders slipped by 0.2 percent in August after edging down by 0.1 percent in July. Economists had expected durable goods orders to decline by 0.4 percent.” Story at...
https://www.nasdaq.com/articles/u.s.-durable-goods-orders-edge-slightly-lower-for-second-straight-month
 
CONSUMER CONFIDENCE (Conference Board vis prnewswire)
"Consumer confidence improved in September for the second consecutive month supported in particular by jobs, wages, and declining gas prices," said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. "The Present Situation Index rose again, after declining from April through July. The Expectations Index also improved from summer lows, but recession risks nonetheless persist. Concerns about inflation dissipated further in September—prompted largely by declining prices at the gas pump—and are now at their lowest level since the start of the year." Press release at...
https://www.prnewswire.com/news-releases/consumer-confidence-improved-again-in-september-301634267.html
 
NEW HOME SALES (yahooFinance)
“New home sales unexpectedly increased in August from the month before, but the decline in median and average prices suggests that home builders are open for negotiation as the overall housing market cools.
Sales of newly constructed homes came in at a seasonally adjusted annual rate of 685,000, up 28.8% from July's revised pace of 532,000 and 0.1% below the year ago...” Story at...
https://finance.yahoo.com/news/new-home-sales-jump-august-142456527.html
 
BEAR MARKET BOTTOM (YahooFinance)
"I think this will be a bear market with a recession," Stovall said on Yahoo Finance Live (video above). "Bear markets with recessions have ended up being deeper and lasting longer than those without a recession, with the average decline being 35%. So I think we will probably end up seeing this bear market bottom around 3,200." Story at...
https://finance.yahoo.com/news/stock-market-may-bottom-according-to-one-strategist-173117343.html
 
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 fell about 0.2% to 3647.
-VIX rose about 1% to 32.60.
-The yield on the 10-year Treasury was 3.946%.
 
PULLBACK DATA:
-Drop from Top: 24% as of today. 24% max (on a closing basis).
-Trading Days since Top: 184-days.
The S&P 500 is 13.7% Below its 200-dMA & 9.5% Below its 50-dMA.
Support is around 3250, the lows of September 2020.
 
VIX WATCH: VIX is now about 32.6. At the bottom of the Financial Crisis in 2009 the VIX was 50 or so. During that bear market VIX hit 80 at one point. This doesn’t say for certain that this correction has a lot further to fall, but it does cause one to wonder.
 
*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 – sold Tuesday.
 
TODAY’S COMMENT:
Was the bottom today? On the recent new lows, yesterday and today, volume has been dropping. That’s suggesting that selling is fading. Investors are less fearful at these lows than they were in June. We also note that the “Buying-Pressure minus Selling-Pressure” indicator ticked up slightly today (bullish), even though the Index fell. More than half of the volume on the NYSE was up today, dramatically better than at prior lows.
 
Breadth has improved at recent lows over the June low and were better Tuesday than Monday. New-high, new-low numbers improved too.
 
Tuesday unchanged volume was high. As I’ve often said, many believe that this indicator suggests investor confusion at market turning points. My problem is that it is frequently a false signal, but I will say this; this indicator has been correct the last three times we’ve seen it. Days with high unchanged volume are shown as RED triangles on the following chart.  Circles indicate statistically significant days and boxes designate outside reversal days.

If the indicator is sending a decent signal now, it is suggesting a reversal upward.
 
Today, the daily sum of 20 Indicators improved from -11 to -8 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations declined from -63 to -70. (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 & VIX are bearish; SENTIMENT & PRICE are neutral. Remember for the longer-term, one indicator trumps them all – “Don’t fight the FED.”
 
All in all, the numbers are suggesting a bottom, or at least a bounce. There are issues though; we didn’t see much buying at the close - the S&P 500 fell in the last hour. Also, the Smart Money indicator (that tracks late day action) is falling and that’s a bearish sign.
 
If the bottom was in, I would have expected to see the Pros buying late in the day, today, so that’s a worry. Still, S&P 500 futures are up 0.35% as I write this. We’ll have to wait and see tomorrow whether there is significant buying that would confirm a bullish move. If nothing else, the signs are suggesting at least a bounce higher.
 
Bottom line: I’m a skeptical Bull; I’ll buy some stocks tomorrow and see what other investors are doing. Perhaps I’ll get back to 40 or 50% invested.
 
BEST ETFs - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily)
None of the ETFs I track are above their 120-dMA so the chart is no good. ETF ranking follows:
#1 XLU; #2. XLV #3. IBB
*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.
My momentum chart for the Dow has blown up. DOW 30 momentum ranking follows:
#1 UNH; #2. WMT #3. MCD
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.) 
 

...BUT I’LL MOVE TO 40 OR 50% INVESTED IN STOCKS WEDNESDAY..
 
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.