Trump Should be Disqualified ... PPI ... Univ of Michigan Sentiment ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

 
“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
PPI (CNN)
“US wholesale inflation rose more than expected in July, reversing a yearlong cooling trend, the Bureau of Labor Statistics reported Friday. The Producer Price Index, which tracks the average change in prices that businesses pay to suppliers, rose 0.8% annually. That’s above June’s upwardly revised increase of 0.2% and higher than expectations for a 0.7% gain... core PPI rose 2.4% annually in July. That’s in line with what was seen in June but a tick above economists’ expectations for a slight cooling.”  Story at...
https://www.cnn.com/2023/08/11/economy/ppi-producer-inflation-july/index.html
 
UNIV OF MICHIGAN SENTIMENT (U of M)
“Consumer sentiment was essentially unchanged from July, with small offsetting increases and decreases within the index. At 71.2 index points, sentiment is now about 42% above the all-time historic low reached in June of 2022 and is approaching the historical average reading of 86. In general, consumers perceived few material differences in the economic environment from last month, but they saw substantial improvements relative to just three months ago.” Press release at...
http://www.sca.isr.umich.edu/
 
TRUMP SHOULD BE DISQUALIFIED (MSN.com)
“Donald Trump should be disqualified from serving as president under Section Three of the 14th Amendment to the US Constitution, according to a new paper published by two conservative law professors. William Baude and Michael Stokes Paulsen argue for their interpretation that the 14th Amendment contains a clause that any former elected official who engages in insurrection or rebellion is prohibited from holding office in the future...
..There is...a recent precedent for a judge acting to bar someone who was involved in an insurrection attempt from holding office: former Otero County, New Mexico Commissioner Couy Griffin was banned for life from public office for leading the Cowboys for Trump group during the Capitol riot.” Story at...
Trump has already disqualified himself from White House return – say two conservative law professors (msn.com)
 
My cmt: Let’s not forget the 25th Amendment: “The 25th Amendment allows the vice-president to become acting president when a president is unable to continue his duties, if for example, he or she becomes incapacitated due to a physical or mental illness.” Physical or mental illness? Sounds like Biden qualifies due to his incapacitation from declining mental capacities. Getting rid of Trump and Biden would be a big plus for the country. Dump Trump now. Wait 6-months to get rid of Biden so that Kamala Harris’ time as President is minimized. None of this is likely, but it is my favorite fantasy.
 
MARKET REPORT / ANALYSIS
-Friday the S&P 500 dipped about 0.1% to 4464.
-VIX slipped about 6% to 14.84. (Do the Options Players know something we don’t?)
-The yield on the 10-year Treasury rose to 4.157
 
PULLBACK DATA:
-Drop from Top: 7%. 25.4% max (on a closing basis).
-Trading Days since Top: 403-days.
The S&P 500 is 8.4% ABOVE its 200-dMA and 0.6% 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.
 
XLK – Technology ETF.
XLY - Consumer Discretionary ETF.
 
SHY – Short term bonds.
 
TODAY’S COMMENT:
I just noticed that I had a bull sign yesterday: 10 August was a Bullish outside reversal day.
 
Today, 10 August, there was extreme high unchanged-volume. As I’ve often said, many believe that this indicator suggests investor confusion at market turning points. This is not in my system (because it gives a lot of false signals), but given other indications, this may indeed be a turning point. The Index is only 0.6% above its 50-dMA, about where I guessed the pullback might end and yesterday there was a bullish outside reversal day. We can also consider the Friday summary of indicators.
 
We look at a summary of indicators on Friday: The weekly rundown of indicators improved, but remained on the Bear side (now 14-bear and 6-bull). That is a bearish indication, but there are still enough bull signs to keep me fully invested. (These indicators tend to be both long-term and short-term, so they are different than the 20 that I report on daily.) I am sitting on a fair amount of cash that I will put back in stocks at some point as market conditions improve.
 
BULL SIGNS
-The 50-dMA percentage of issues advancing on the NYSE (Breadth) is above 50%.
-The 100-dMA percentage of issues advancing on the NYSE (Breadth) is above 50%.
-10 August there was a Bullish Outside Reversal Day. I’ll keep this in effect for 5 days and until the McClellan Oscillator turns bearish.
-My Money Trend indicator reversed higher 10 August.
-The long-term, 50-dEMA, Fosback Hi-Low Logic Index.
-XLI-ETF (Cyclical Industrials) is slightly underperforming the S&P 500, but improving sharply – call it bullish.
 
NEUTRAL
-There have been 3 Distribution Days, 27 July & 2 Aug, but 2 are not enough to send a signal
-There have been 3 Statistically-Significant days (big moves in price-volume) in the last 15-days.
-Sentiment.
-Bollinger Band Squeeze 28 April - expired.
-Bollinger Bands.
-The S&P 500 is 8.4% above its 200-dMA. (Bear indicator is 12% above the 200-day.)
-Overbought/Oversold Index (Advance/Decline Ratio).
-Issues advancing on the NYSE (Breadth) compared to the S&P 500. This indicator has improved enough to clear the bear sign.
-RSI.
-The 50-dMA percentage of issues advancing on the NYSE (Breadth) has not been below 50%, for more than 3 days in a row.
-There was a Zweig Breadth Thrust 31 March. That’s a rare, very-bullish sign, but the McClellan Oscillator subsequently turned negative, so this indicator has expired.
-The short-term, 10-day EMA, Fosback Hi-Low Logic Index is neutral.
-There have been 3 up-days over the last 10 sessions – neutral.
-There have been 10 up-days over the last 20 sessions - neutral.
-On average, the size of up-moves has been larger than the size of down-moves over the last month, but not enough to send a signal.
-The Calm-before-the-Storm/Panic Indicator flashed a top warning signal 31 July & 1 August. That looks like it was the short-term top.
-VIX indicator.
-There was a 90% down-volume day 9 March.
-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 2022. (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 5-10-20 Timer System is HOLD.
-S&P 500 spread vs. Utilities (XLU-ETF) shows the Index outpacing Utilities but the trend has been down all week – call it neutral.
 
BEAR SIGNS
-There was a Hindenburg Omen signal 6 Aug 2023. This remains in effect until the McClellan Oscillator turns positive.
-The 10-dMA percentage of issues advancing on the NYSE (Breadth) is below 50%.
-The smoothed advancing volume on the NYSE is falling.
-MACD of the percentage of issues advancing on the NYSE (breadth) made a bearish crossover 3 August.
-Smoothed Buying Pressure minus Selling Pressure is falling.
-MACD of S&P 500 price made a bearish crossover 27 July.
-Long-term new-high/new-low data.
-Short-term new-high/new-low data.
-McClellan Oscillator.
-Slope of the 40-dMA of New-highs is falling.
-The graph of the 100-day Count (the 100-day sum of up-days).
-The Smart Money (late-day action).
-The 5-day EMA is below the 10-day EMA so short-term momentum is bearish.
-42% of the 15-ETFs that I track have been up over the last 10-days. (45-55% is neutral.)
 
On Monday’s update of the Friday summary of indicators (20 December 2021), 9 days before the top of the current 25% correction, there were 21 bear-signs and zero bull-signs. Now there are 14 bear-signs and 6-Bull. Last week, there were 17 bear-sign and 5 bull-signs.
 
The daily spread of 20 Indicators (Bulls minus Bears) remained -6 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations declined from -52 to -58. (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. I may put some money to work Monday.  It is not possible to call a bottom on small dips so averaging my way back to a higher invested position makes sense.  Seasonally, this may be questionable (the fall is not always a friend to the markets). Let’s see what happens Monday.
 
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
 
FRIDAY 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’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.