Trump Indicted ... COVID Came from a Chinese Lab ... Climate Change Isn’t Causing Fires ... ISM Manufacturing ... JOLTS – Job Openings ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

 
TRUMP INDICTED (CNBC)
“Trump was hit with four serious felonies in the new indictment, accusing him of fraudulently trying to undo his loss in the 2020 election.
-The first charge, conspiracy to defraud the United States, has a maximum possible sentence of five years in prison if convicted.
-Two other charges — conspiracy to obstruct an official proceeding, and obstruction of an official proceeding — carry much heavier maximums: 20 years in prison.
-The fourth charge against Trump, conspiracy against rights, has a maximum possible sentence of 10 years behind bars.” Story at...
https://www.cnbc.com/2023/08/01/trump-indictment-live-updates-former-president-predicts-charges.html
 
“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
“I have never seen a more insidious, inane, exploitative, and cruel plan put forth to the American public...In San Francisco, you’re asking non-slave owners to pay $5 million to people that were never slaves. The average household is going to have to pay about $600,000.” - Tony Hall former member of the San Francisco Board of Supervisors.
My cmt: Very strange. California was a “free state” whose Constitution outlawed slavery.
 
CLIMATE CHANGE HASN’T SET THE WORLD ON FIRE (WSJ)
“One of the most common tropes in our increasingly alarmist climate debate is that global warming has set the world on fire. But it hasn’t. For more than two decades, satellites have recorded fires across the planet’s surface. The data are unequivocal: Since the early 2000s, when 3% of the world’s land caught fire, the area burned annually has trended downward.” - Bjorn Lomborg, president of the Copenhagen Consensus, visiting fellow at Stanford University’s Hoover Institution and author of “False Alarm: How Climate Change Panic Costs Us Trillions, Hurts the Poor, and Fails to Fix the Planet.”
 
ISM MANUFACTURING (ISM)
“The July Manufacturing PMI® registered 46.4 percent, 0.4 percentage point higher than the 46 percent recorded in June. Regarding the overall economy, this figure indicates an eighth month of contraction after a 30-month period of expansion... “Of the six biggest manufacturing industries, only one — Petroleum & Coal Products — registered growth in July.
https://www.ismworld.org/supply-management-news-and-reports/reports/ism-report-on-business/pmi/july/
 
JOLTS – JOB OPENINGS (fxstreet)
“The number of job openings on the last business day of June stood at 9.58 million, the US Bureau of Labor Statistics (BLS) reported in the Job Openings and Labor Turnover Survey (JOLTS) on Tuesday. This reading followed 9.82 million openings in May and came in slightly below the market expectation of 9.62 million.” Story at...
https://www.fxstreet.com/news/us-jolts-preview-fed-expects-job-openings-to-decline-202308010900
 
CONSTRUCTION SPENDING (Yahoo Finance)
“U.S. construction spending increased solidly in June and the prior month's data was revised higher, boosted by outlays in both single and multifamily housing projects. The Commerce Department said on Tuesday that construction spending rose 0.5%.” Story at...
https://finance.yahoo.com/news/us-construction-spending-rises-strongly-143713112.html
 
IT’S BECOMING UNDENIABLE: COVID CAME FROM A CHINESE LAB (NY POST)
“Evidence that COVID came from a Chinese lab mounted toward a conclusive level last week: “Multiple government sources” say the very first people infected by the bug were Wuhan Institute of Virology researchers, a new report reveals...More, they were allegedly modifying a close relative of the virus with a key feature unique to it.” Story at...
It's becoming undeniable: COVID came from a Chinese lab (nypost.com)
My cmt: The story also notes that GAO reported that the Wuhan Lab was partially funded by at least $2 million of US taxpayer funds in 2014-2021.
 
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 was down about 0.3% to 4577.
-VIX rose about 2% to 13.93.
-The yield on the 10-year Treasury rose to 4.032.
 
PULLBACK DATA:
-Drop from Top: 4.3%. 25.4% max (on a closing basis).
-Trading Days since Top: 395-days.
The S&P 500 is 12.1% ABOVE its 200-dMA (overbought) and 4.3% 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.
 
I’d look at Intel (INTC) since it is the leading momentum stock in the DOW 30 and is a leader in the Dow stocks in gains over the last 40-days. I’ll wait though, since a pullback of some kind is overdue.
 
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.
 
TODAY’S COMMENT:
Not much change today. The standard deviation of daily market moves still indicates a top within the month, although we don’t expect a major top. Bear signs remain: MACD of price is bearish; the S&P 50 remains too far ahead of breadth; Smart Money (late day action is headed down and maybe a few others.
 
All pundits on the CNBC Halftime Report were suggesting a pullback is coming soon.  That’s always a warning – the market almost never does what the majority expects. I wouldn’t be surprised to see the market push higher before we have that pullback.
 
The daily spread of 20 Indicators (Bulls minus Bears) declined from +1 to -3 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations remained +6. (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; VIX, VOLUME & 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. There is a decline of around 5% on the S&P 500 coming. The timing remains unclear.
 
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 slipped to 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 50% 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.