Durable Orders ... Crude Inventories ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

 
“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
“I think leaders should endeavor to be honest, ethical, moral people who try to set standards for themselves and lead by example across the country. Donald Trump doesn’t try to do any of that. He does the opposite, frankly. So I just don't think he's fit for the job here...The party that puts the first fresh face forward wins this election.” - Paul Ryan, Republican, Former Speaker of the House.
 
DURABLE ORDERS (Yahoo News)
“Durable Goods Orders for August...more positive than expected and in month-over-month comparisons: +0.2% is above the -0.5% consensus and the downwardly revised -5.6% the previous month. ...now we see four out of five months stronger... While these are heartening results for the health of the economy...they do not assist the Fed in deciding that all rate hikes to the Fed funds are over for the time being.” Story at... 
https://finance.yahoo.com/news/durable-goods-orders-increase-august-144700775.html
 
CRUDE OIL INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 2.2 million barrels from the previous week. At 416.3 million barrels, U.S. crude oil inventories are about 4% below the five year average for this time of year.” Report at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf
 
TURNING POLUTION INTO RESOURCE (The Cool Down)
“A promising breakthrough in sustainable energy not only aims to reduce pollution that harms the environment, it also aims to use that pollution. Researchers from the Illinois Institute of Technology, the University of Pennsylvania, and the University of Illinois, Chicago, have developed a system that can convert carbon dioxide pollution into propane... Matteo Cagnello, an assistant professor of chemical engineering at Stanford who led similar research in 2019, described the closing of the carbon cycle at the time, saying: “One can imagine a carbon-neutral cycle that produces fuel from carbon dioxide and then burns it, creating new carbon dioxide that gets turned back into fuel.” Story at...
Scientists make breakthrough turning air pollution into resource for human use: ‘For the benefit of global users’ (msn.com)
My cmt: The biggest problem with the climate-crisis panic is that it ignores technologies that will solve the problem, such as the one above and others like carbon capture, hydrogen fuel cells, advances in fusion reactors and improvements in batteries. Let’s face it – if batteries were smaller, lighter weight and more efficient, electric vehicles would be a realistic competitor to gas powered vehicles (although it is questionable whether electric vehicles will make any difference in global temperatures).
 
OIL COULD HIT $150 PER BARREL (NY Post)
“A top oil executive predicted that the price of crude would continue to soar — climbing to as high as $150 per barrel — unless the government adopts new policies to encourage more exploration. Doug Lawler — the CEO of Continental Resources, a shale driller controlled by billionaire Harold Hamm — warned that crude output in Texas’ Permian Basin oil field could soon peak, as it already has in rival shale fields like North Dakota’s Bakken Formation and Texas’ Eagle Ford.” Story at...
Shale CEO warns oil could hit $150 per barrel (msn.com)
 
THE HEAT PUMP FARCE (The Telegraph / msn.com)
“The real problem with heat pumps is that they are not yet effective enough, we have not worked out how to insulate our ageing housing stock so they generate enough warmth, and even if we fixed those two issues we most likely won’t generate enough electricity at reasonable cost to keep them all running through the winter.  The solution is very simple. Countries around the world are developing new heat pump technology, and other “green” home heating technologies are emerging all the time. Hydrogen might work, or high-capacity batteries powered by domestic solar panels, or extracting warmer water from underground. No one can say for sure yet. So we should wait and see.” Story at... 
The heat pumps farce has reached a new low (msn.com)
My cmt: The US is mandating heat pumps in about half the states.  In Britain (article above), it’s really crazy. They’re going to fine suppliers for not selling enough heat pumps.
 
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 was little changed at 4275.
-VIX dipped about 4% to 18.22.
-The yield on the 10-year Treasury rose to 4.616%, a continuing worry for the stock market.
 
PULLBACK DATA:
-Drop from Top: 10.9%. 25.4% max (on a closing basis).
-Trading Days since Top: 435-days.
The S&P 500 is 1.9% ABOVE its 200-dMA and 4.2% 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:
XLK – Technology ETF (holding since the October 2022 lows).
XLY - Consumer Discretionary ETF. (Holding since the October 2022 lows - I bought more XLY Monday, 8/21.)
I took profits and then reestablished positions as follows:
SPY – I bought a large position in the S&P 500 Friday, 8/14, in my 401k (it has limited choices).
XLE – Added Tuesday, 8/22.
SSO – 2x S&P 500 ETF. Added 8/24.
CSCO – added 9/5.
 
TODAY’S COMMENT:
Internals are finally improving, not enough to change indicators much, but improving. Advancers outpaced decliners and advancing volume was higher than declining volume. New 52-week lows remained much worse than new 52-week highs, but that is not unusual. New-high/new-low data is always last to turn.
 
This correction/bear market has lasted 435 days and included a 25% drop from peak to trough.  If the bear market ended now (broke to new all-time highs) the closest bear market in the last 75 years, statistically, would be the 1980-1982 bear that saw a 28% decline. It lasted 444-days. The gain on the other side was 229%. That doesn’t mean we’ll see that kind of rally this time, but usually after a bear market, returns are very good. The average gain is about 85%. The exception would be 1929 – I don’t even want to think about that possibility. It is small, but not zero.
 
It was interesting that a CNBC investor survey showed that two thirds of respondents thought that the market was in a bear market rally. That seemed like a high level of bearish sentiment that is actually bullish.
 
The Russell 2000 was up nearly 1% today – I see that as a bullish sign, too.
 
The daily spread of 20 Indicators (Bulls minus Bears) declined from -6 to -10 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations declined from -56 to -61. (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 SELL: VOLUME, PRICE & VIX are bearish; SENTIMENT is neutral.
I’m not selling now. I’d prefer to hang on since I am still expecting a relatively shallow pullback from August highs and if the markets haven’t bottomed yet, they are not far from it.  
 
(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.)
 
The S&P 500 dipped to within 1/10% of its 200-dMA today and bounced higher. I am still cautiously optimistic – I don’t think the market has too much farther to go and it may have already bottomed.
 
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
WEDNESDAY 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 75% stocks, including stock mutual funds and ETFs. I’m usually about 50% invested in stocks. I’m “over invested” now expecting new, all-time highs this year. That burns all the cash.  I have about 25% of the portfolio in bonds.
 
I trade about 15-20% of the total portfolio using the momentum-based analysis I provide here. When I see a definitive bottom, I add a lot more stocks to the portfolio using an S&P 500 ETF as I did back in October.