Best DOW Stocks ... Best ETFs … Stock Market Analysis ... Payroll Report ... Unemployment Rate

 
“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.
 
PAYROLL REPORT / AVG HOURLY EARNINGS / UNEMPLOYMENT RATE / AVG WORKWEEK
“Job growth slowed for a second month in September as a series of supersized interest rate hikes permeated the U.S. economy, but the softer nonfarm payroll gain is still unlikely to deter policymakers from aggressive monetary action to fight inflation that remains at a decades-high....
-Non-farm payrolls: +263,000 vs. +255,000 expected
-Unemployment rate: 3.5% vs. 3.7% expected
-Average hourly earnings, month-over-month: +0.3% vs. +0.3% expected
-Average hourly earnings, year-over-year: +5.0% vs. +5.0% expected” Story at...
https://finance.yahoo.com/news/september-jobs-report-october-7-2022-203836987.html
My cmt: Markets said, “Ruh, Roh. No Fed pivot yet.”
 
NATIONAL DEBT TOPS 31 TRILLION DOLLLARS (Yahoo.com)
“The gross national debt in America has hit new heights, surpassing $31 trillion, according to a U.S. treasury report released this week. If you find that hard to wrap your head around, it basically boils down to more than $93,000 of debt for every person in the country, according to the Peter G. Peterson Foundation.” Story at...
https://finance.yahoo.com/news/us-national-debt-now-tops-210000112.html
 
MARKET REPORT / ANALYSIS
-Friday the S&P 500 fell about 2.8% to 3640.
-VIX rose about 3% to 31.36.
-The yield on the 10-year Treasury rose to 3.889%.
 
PULLBACK DATA:
-Drop from Top: 24.1% as of today. 25.2% max (on a closing basis).
-Trading Days since Top: 192-days.
The S&P 500 is 13.1% Below its 200-dMA & 8.7% Below its 50-dMA.
Support is around 3585, the low of 5 October 2020.
 
*I won’t call the correction over until the S&P 500 makes a new-high; however, we may have seen the bottom, or at least near the bottom.
 
MY TRADING POSITIONS:
CVX – (I may hold this as a long-term position. I already owned a small position in CVX.)
SPY – S&P 500 (I may hold this as a long-term position.)
IWM - Russell 2000. (I may hold this as a long-term position.)
 
TODAY’S COMMENT:
Going back to 16 June, there have been 5 new lows.  Today was not a new low, but it was a big down-day in an ongoing Bear Market. We might expect volume to be very high. It wasn’t. The volume today was lower than every one of those prior new lows and it was nearly 6% below the average volume for the month. That suggests fear isn’t increasing and is thus, bullish. I also would have expected the VIX to jump more than 2.7% on a big down day – that’s another sign of falling fear.
 
If markets fall much farther, I’ll be buying leveraged long positions (QLD or UWM), but I want to wait until there are more bullish signs.
 
On Fridays, I summarize a number of indicators to get a weekly feel for trend. The Friday rundown of indicators improved, but remained slightly bearish (15-bear and 11-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 longer-term, 50-dEMA, Fosback Hi-Low Logic Index is Bullish.
-The S&P 500 is 13.1% below its 200-dMA. (Bull indicator is 12% below the 200-day, although this is based on “normal” pullbacks.)
-The smoothed advancing volume on the NYSE is rising.
-Issues advancing on the NYSE (Breadth) compared to the S&P 500 are bullish. (The Index is lagging Breadth.)
-My Money Trend indicator is strongly bullish.
-Sentiment.
-On average, the size of up-moves has been larger than the size of down-moves over the last month.
-28 Sept and 3 and 4 Oct were all bullish 90% up-volume days. (Today there was a 90% down-volume day, but the close was not within the lower 10% of the day’s range, so it won’t negate the bullish 90% up-volume day on 4 October.)
-MACD of S&P 500 price made a bullish crossover 5 Oct.
-Short-term new-high/new-low data.
-S&P 500 is outperforming the Utilities (XLU).
 
NEUTRAL
-The short-term, 10-day, Fosback Hi-Low Logic Index.
-Overbought/Oversold Index (Advance/Decline Ratio). 
-RSI
-Bollinger Bands.
-There have been 4 Statistically-Significant days (big moves in price-volume) in the last 15-days...neutral.
-There have been 6 up-days over the last 20 sessions. – This works with sentiment. Sentiment is too high so this is neutral.
-There have been 3 up-days over the last 10 sessions – leaning bullish, but neutral.
-The Calm-before-the-Storm/Panic Indicator warned on 13 September - expired.
-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 2.7 standard deviations on 28 Sep – 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
-The graph of the 100-day Count (the 100-day sum of up-days) is flat.
-Cyclical Industrials (XLI-ETF) are neutral vs. the S&P 500.
 
BEAR SIGNS
-The 10-dMA percentage of issues advancing on the NYSE (Breadth) is below 50%. It is improving.
-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%
-The 50-dMA percentage of issues advancing on the NYSE (Breadth) has been below 50%, for 3 days in a row below 50% for my “correction-now” signal. – It hardly matters now.
-McClellan Oscillator is negative.
-Slope of the 40-dMA of New-highs is falling.
-There have been 2 Distribution Days since the Follow-thru day on 28 Sept.
-MACD of the percentage of issues advancing on the NYSE (breadth) made a bearish crossover 30 Aug.
-21 Sep 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.)
-VIX is rising quickly.
-Long-term new-high/new-low data.
-The Smart Money (late-day action) is headed down.
- Only 38% of the 15-ETFs that I track have been up over the last 10-days.
 
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 15 bear-signs and 11-Bull. Last week, there were 19 bear-signs and 8 bull-signs. Friday indicators are still leaning to the bear side.
 
Today was a statistically significant, down-day. That just means that the price-volume move exceeded my statistical parameters. Statistics show that a statistically-significant, down-day is followed by an up-day about 60% of the time.
 
Today, the daily sum of 20 Indicators declined from +6 to +4 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations improved from -28 to -12. (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 to HOLD: VIX is bearish; SENTIMENT and PRICE are bullish; VOLUME is neutral. 
 
Bottom line: I’m a Bull; I’m now invested with about 65% invested in stocks. I’ll cut back to 50% if I see bearish indicators sharply warning. I’ll add leveraged long positions (QLD, UWM) if we see a pullback to the prior lows and bullish signs. (As a retiree, 50% invested in stocks is my “normal” portfolio.)
 
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. IBB  #3. XLV

*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. UNH  #3. WMT

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 HOLD.
(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 65% 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.