Retail Sales ... Industrial Production ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...
“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
RETAIL SALES (CNN)
“Spending at US retailers rose in June for the third
month in a row, in a subdued show of resilience from American consumers. Retail
spending, which is adjusted for seasonality but not inflation, rose 0.2% in
June...” Story at...
https://www.cnn.com/2023/07/18/economy/retail-sales-june/index.html
INDUSTRIAL PRODUCTION (Economic Times)
“Production at U.S. factories unexpectedly fell in June,
but rebounded in the second quarter as motor vehicle output accelerated after
two straight quarterly declines. Manufacturing output dropped 0.3% last month...”
Story at
https://economictimes.indiatimes.com/news/international/world-news/us-manufacturing-output-falls-in-june-rebounds-in-second-quarter/articleshow/101873146.cms
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 rose about 0.7% to 4555.
-VIX dipped about 1% to 13.30.
-The yield on the 10-year Treasury dipped to 3.790%.
PULLBACK DATA:
-Drop from Top: 5%. 25.4% max (on a closing basis).
-Trading Days since Top: 384-days.
The S&P 500 is 12.8% ABOVE its 200-dMA (overbought)
and 5.9% 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 we called a buy on 4 October 2022.
MY TRADING POSITIONS:
I am not trading as much as in the past. You may wish to
use the momentum charts and/or the Monday, 40-day gain charts for trading the
Dow stocks and ETFs.
MSFT – Microsoft.
XLK – Technology ETF.
XLY - Consumer Discretionary ETF.
KRE – Regional Banking ETF. This is a very small position
for me. KRE tested the May 4 low of 36.08 on much lower volume 11 &
12 May.
SHY – Short term bonds. 30-day yield is 5.04% - 9 June 2023.
(Trailing 1-year yield is 3.04%.) Once this weak period ends, I’ll sell SHY and
buy stocks/stock ETFs.
TODAY’S COMMENT:
Talk about cross-currents. Tuesday, the Bollinger Bands indicator
flashed “overbought” while RSI (that was overbought yesterday) did not. Further, another Top/Bottom Indicator,
Sentiment, flashed a buy-signal since, on a preliminary basis, sentiment has
gotten too bullish! I’ll find out later tonight if that is a valid indication –
the data comes in late.
Either way, I still don’t have the strong top-indicator I
have been expecting, meaning that the Index may continue to crawl along its
upper-trend line.
Still, Tuesday was a statistically significant up-day.
That just means that the price-volume move exceeded my statistical parameters.
Statistics show that a statistically-significant, up-day is followed by a
down-day about 60% of the time. Tops almost
always occur on Statistically-significant, up-days, but not all
statistically-significant, up-days occur at tops. Today could be a short-term
top, but as noted, I still do not have a strong top-signal. I’m afraid this is
another one of those frustrating “We’ll see” days
The daily spread of 20 Indicators (Bulls minus Bears) slipped
from +2 to -3 (a positive number is bullish; negatives are bearish); the 10-day
smoothed sum that smooths the daily fluctuations declined from +34 to +27.
(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
HOLD: PRICE is positive; SENTIMENT, VIX & VOLUME are neutral. (This
indicator ensemble is showing positive market conditions, but there may be a
better buying point ahead.) This indicator may turn bullish depending on
Sentiment. I get the data later tonight.
(The important BUY in this indicator was on 21 October,
7-days after the bottom. For my NTSM overall signal, I suggested that a
short-term buying opportunity occurred on 27 September (based on improved
market internals on the retest), although without market follow-thru, I was
unwilling to call a buy; however, I did close shorts and increased stock
holdings. I issued a Buy-Signal on 4 October, 6-days before the final bottom,
based on stronger market action that confirmed the market internals signal. The
NTSM sell-signal was issued 21 December, 9 sessions before the high of this
recent bear market, based on the bearish “Friday Rundown” of indicators.)
Bottom line: I remain a cautious Bull, expecting a
decline of around 5-6% on the S&P 500 to start soon. (The Broken Record
continues!)
ETF - 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
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
TUESDAY MARKET INTERNALS (NYSE
DATA)
My basket of Market Internals remained HOLD. (My basket of Market
Internals is 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 55% stocks, including stock mutual funds and ETFs. I’m
usually about 50% 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 as I did back in October.
