Best DOW Stocks ... Best ETFs … Stock Market Analysis ... Composite Manufacturing / Services PMI ... Signs of a Bottom

 
“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
“For decades we disagreed with [Supreme] Court rulings when progressives held sway, but we never called the Court illegitimate. But now that the left has lost the Court as a backup legislature for its policy goals, the institution is supposedly broken. Tell us again who is the threat to democratic institutions?” – WSJ Editorial Board.
 
IHS COMPOSITE MANUFACTURING / SERVICES PMI (S&P Global)
“Private sector firms in the US recorded a further downturn in output at the start of the fourth quarter, according to latest ‘flash’ PMI™ data from S&P Global. The fall in business activity was solid and stronger than that seen in September, as service providers signaled a quicker decline. Manufacturers, on the other hand, saw output rise for the second month running, albeit only marginally. The headline Flash US PMI Composite Output Index registered 47.3 in October, down from 49.5 in September. With the exception of the initial pandemic period, the rate of decrease was the second-fastest since 2009.” Press release at...
https://www.pmi.spglobal.com/Public/Home/PressRelease/add9c8d7702e49c3ab0c3bbfa1822944
 
MORE SIGNS OF A BOTTOM (Heritage Capital)
“I saw a tweet from Wall Street Journal and Fed insider Nick Timiraos...Today [Friday, 21 Oct] we learned that the Fed may move from 3/4% hikes to 1/2% hikes as soon as December. The anticipated 3/4% rise in November remains. Is this the long-awaited pivot from the Fed? It’s too early to tell, but as I have been saying and writing, it [will] take 6-9 months for the economy to feel Fed moves. That means the real economic damage remains in front of us in 2023...
... the markets should find a low in Q4 which is right now. And October has the highest likelihood of that occurring. We just have to keep watching for confirmation signs like more buying stampedes and good leadership. We absolutely need to see the 2-Year stop going up along with the dollar. I am also keenly focused on high yield bonds which we started buying earlier this week for the first time in a few months.” – Paul Schatz, President Heritage Capital. Commentary at...
https://investfortomorrow.com/blog/more-signs-of-a-bottom-yankees-saying-goodbye/
 
MARKET REPORT / ANALYSIS
-Monday the S&P 500 rose about 1.2% to 3797.
-VIX bucked the trend and rose about 0.5% to 29.85.
-The yield on the 10-year Treasury slipped to 4.228%.
 
PULLBACK DATA:
-Drop from Top: 20.8% as of today. 25.4% max (on a closing basis).
-Trading Days since Top: 203-days.
The S&P 500 is 8.1% Below its 200-dMA & 2.1% Below its 50-dMA.
*I won’t call the correction over until the S&P 500 makes a new-high; however, evidence suggests the bottom was / is in the 3600 area and I am fully invested with a higher percentage of stocks than normal.
 
MY TRADING POSITIONS:
XLI – Industrial ETF
QLD – 2x Nas 100
DDM – 2x Dow 30
XLK – Technology ETF
 
CVX – (I may hold this as a long-term position. I already owned a small position in CVX.)
 
TODAY’S COMMENT:
10-dMA of Breadth (% of stocks advancing on NYSE) improved today to 51% indicating that over the last 10 days more than half of the issues traded on the NYSE were positive.  That’s a good sign and it shows that more stocks are participating in the advance. We really need to see the 100-dMA move above 50%.  That would be strong evidence of an end to the Bear Market.  On the charts, we’d also need to see the S&P 500 break above its 200-dMA.
 
The price action supports the view that investors are more bullish now than they were a month ago. The S&P 500 is up 4% since then. Volumes have been increasing, too, suggesting that the advance is likely to be durable. Volume over the last month is 5% higher than the previous month and 13% higher than it was 2 months ago, also reinforcing investor confidence.
 
Today, the daily sum of 20 Indicators jumped from +12 to +16 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations improved from +54 to +62. (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 improved to BUY: VIX is bearish; SENTIMENT, PRICE & VOLUME are bullish.  The Long-Term indicator can be slow to turn. It would be more comforting if the VIX indicator would also turn bullish.
 
Bottom line: I’m a Bull: I’m now invested with about 75% of the portfolio invested in stocks. (As a retiree, 50% invested in stocks is my “normal” portfolio.) 75% stocks is uber-bullish and that’s as far as I’ll go.
 
BEST ETFs - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily)
ETF ranking follows:
The top ranked ETF receives 100%. The rest are then ranked based on their momentum relative to the leading ETF.
#1. XLE  #2. ITA #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)
DOW 30 momentum ranking follows:
#1. CVX  #2. MRK #3. AMGN

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

MONDAY MARKET INTERNALS (NYSE DATA)

My basket of Market Internals improved to 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.) 
 
 

...My current invested position is about 75% stocks, including stock mutual funds and ETFs. I’m usually about 50% invested in stocks. I’ll cut back on stocks if we see serious bear signs.

 
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.