Stock Market Analysis ... Retail Sales ... Industrial Production ... NAHB Housing Index ... Crude Inventories ... Trading DOW Stocks ... Trading ETFs …

 
“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
I think [Trump] is ...the only Republican who could lose ... [in 2024]" – Mick Mulvaney, Former Trump Chief of Staff.
 

RETAIL SALES (ABC News)
“Americans stepped up their spending at retailers, restaurants, and auto dealers last month, a sign of consumer resilience as the holiday shopping season begins amid painfully high inflation and rising interest rates. The government said Wednesday that retail sales rose 1.3% in October from September...” Story at...
https://abcnews.go.com/US/wireStory/us-retail-sales-rose-13-month-sign-resilience-93406929
 
INDUSTRIAL PRODUCTION (FX Street)
“Industrial Production in the United States (US) contracted by 0.1% on a monthly basis in October...” From...
https://www.fxstreet.com/news/us-industrial-production-contracts-by-01-in-october-202211161419
The Federal Reserve reported that “...total industrial production in October was 3.3 percent above its year-earlier reading.”
 
NAHB HOUSING INDEX (Trading Economics)
“The NAHB housing market index in the US extended losses for an 11th straight month to 33 in November of 2022 from 38 in October and below forecasts of 36. It is the lowest reading since 2012 excluding the immediate onset of the pandemic.” Story at...
https://historydaily.org/68-vintage-photos-so-beautiful-we-cant-look-away?utm_subid=11789966&utm_campaign=1789937&utm_source=ga&utm_medium=cpc&utm_term=tradingeconomics.com&gclid=EAIaIQobChMIzoeWnZ-z-wIVWRSKAx3HaAJ8EAEYASAAEgJJJfD_BwE
 
CRUDE OIL INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 5.4 million barrels from the previous week. At 435.4 million barrels, U.S. crude oil inventories are about 4% below the five-year average for this time of year...” Story at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf
 
TARGET EARNINGS MISS (Yahoo Finance)
“In the latter weeks of the quarter, sales and profit trends softened meaningfully, with guests’ shopping behavior increasingly impacted by inflation, rising interest rates and economic uncertainty," Target Chairman and CEO Brian Cornell stated in the earnings release. "This resulted in a third quarter profit performance well below our expectations. Target stock dropped around 15% in morning trading. Shares of the retailer were down 22% year-to-date as of Monday's close...” Story at...
https://finance.yahoo.com/news/target-earnigs-miss-consumer-shopping-patterns-113025639.html
 
HERITAGE CAPITAL COMMENTARY (Heritage Capital)
“...the Dow Industrials have led this month. That’s not something to celebrate. It’s 30 price-weighted stocks where investors typically try to hide because liquidity is so high. Top notch action is when the NASDAQ and/or Russell 2000 lead which they have since the October 13th bottom. ...The stock market has rallied smartly and some retrenchment is appropriate. I do not believe the rally off the October 13th low is over. What fell the most has bounced the most. Let’s see if other leadership steps up.” – Paul Schatz. Commentary at...
https://investfortomorrow.com/blog/the-fall-of-sbf-continues-as-markets-yawn/
 
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 fell 0.8% to 3959.
-VIX bucked the trend and slipped about 2% to 24.11.
-The yield on the 10-year Treasury dipped to 3.690%.
 
PULLBACK DATA:
-Drop from Top: 17.5% as of today. 25.4% max (on a closing basis).
-Trading Days since Top: 220-days.
The S&P 500 is 2.8% Below its 200-dMA & 4.4% above 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 in the 3600 area and I am fully invested with a higher percentage of stocks than normal.
 
MY TRADING POSITIONS:
XLI – Industrial ETF  (XLI still looks good to me. Nearly 10% of XLI is in Boeing and Caterpillar and they are both strong performers in the DOW momentum analysis.) 
QLD – 2x Nas 100
DDM – 2x Dow 30. I may sell DDM and replace it with SSO (2x S&P 500), but for now, the DOW 30 is still doing well compared to the S&P 500.
XLK – Technology ETF
 
CVX – (I may hold this as a long-term position. I already owned a small position in CVX.)
 
TODAY’S COMMENT:
Looks like the missiles that landed in Poland were Ukraine anti-aircraft missiles. It appears that the markets have shrugged off fear of NATO involvement although some market angst remains. The S&P 500 has made a strong run higher since the October low, so consolidation was expected, although I thought the Index might make it to its 200-dMA before it stalled. The stall is happening now, but it looks like a normal pullback and not an end to the rally.
 
Today, the daily sum of 20 Indicators improved from +12 to +14 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations improved from +88 to +95. (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 BUY: SENTIMENT is neutral; VIX, VOLUME & PRICE are bullish.  (The important Buy signal from this indicator ensemble was 21 October (7 days after the low); my first buy indication was on 21 September (2% above the low) based on analysis of retests of the June low.) 
 
Bottom line: I’m a Bull. I think the bottom was 3577 on 12 October. There is always the possibility that the markets could retest those lows, but it seems less likely that a retest will occur in 2022.
 
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.
*For additional background on the ETF ranking system see NTSM Page at…
http://navigatethestockmarket.blogspot.com/p/exchange-traded-funds-etf-ranking.html
XLE has taken the top position in the ETF momentum index. I own CVX so I already have good exposure to energy.
 
BEST DOW STOCKS - TODAY’S MOMENTUM RANKING OF THE DOW 30 STOCKS (Ranked Daily)
DOW 30 momentum ranking follows:

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
 
WEDNESDAY 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.) 
 
 

...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.