Retail Sales ... Empire State Manufacturing ... 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 (Fox Business)
“Retail sales, a measure of how much consumers spent on a number of everyday goods, including cars, food and gasoline, rose 0.7% in July, the Commerce Department said Tuesday. That is above both the 0.4% increase projected by Refinitiv economists and the 0.2% gain recorded in June.” Story at...
https://www.foxbusiness.com/economy/retail-sales-july-2023
 
EMPIRE STATE MANUFACTURING (Advisor Perspectives)
“Business activity declined in New York State, according to firms responding to the August 2023 Empire State Manufacturing Survey. The headline general business conditions index fell twenty points to -19.0. New orders and shipments fell significantly. Delivery times were steady, and inventories moved lower. Labor market indicators pointed to steady employment levels but a shorter average workweek. Input and selling price increases picked up, and capital spending plans firmed somewhat. Looking ahead, firms grew more optimistic about the six-month outlook.” Charts and commentary at...
https://www.advisorperspectives.com/dshort/commentaries/2023/08/15/empire-state-manufacturing-survey-activity-falls?topic=covid-19-coronavirus-coverage
 
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 fell about 1.2% to 4437.
-VIX rose about 11% to 16.46.
-The yield on the 10-year Treasury rose to 4.218
 
PULLBACK DATA:
-Drop from Top: 7.5%. 25.4% max (on a closing basis).
-Trading Days since Top: 405-days.
The S&P 500 is 7.7% ABOVE its 200-dMA and 0.2% 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 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.
 
XLK – Technology ETF.
XLY - Consumer Discretionary ETF.
 
SHY – Short term bonds.
 
TODAY’S COMMENT:
Utilities underperformed today, especially relative to the S&P 500. That seems odd.  During most corrections I expect Utilities to outperform as investors run to safety. The PE for XLU is 22.2 while the S&P 500 PE is 22.3 (for SPY). That may be the answer. Investors have bid-up utilities and the big money is worried about overpaying for utilities. Cyclical Industrials (XLI) have been underperforming too. That is what I’d expect. If investors are worried about the economy, cyclical stocks should suffer.
 
The S&P 500 dropped a little below its 50-dMA, but I still haven’t added any stocks. There aren’t many bull signs and the old wall Street adage, “Don’t try to catch a falling knife” applies. I’ll try to identify a bottom, but it’s not likely since calling a bottom for a minor correction is mostly dumb luck. Am I dumb enough to get lucky?.
 
My Money Trend indicator remains negative as does Buying-Pressure, Minus Selling-Pressure.
 
The daily spread of 20 Indicators (Bulls minus Bears) declined from -6 to -9 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations declined from -65 to -71. (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: VOLUME is bearish; PRICE, VIX & SENTIMENT are neutral.
 
(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. The pullback (underway) is needed to bring the markets back into balance.
 
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 SELL. (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 50% stocks, including stock mutual funds and ETFs. I do have a fair amount of cash on hand.  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.