Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

 
“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
“UN report: two years left to reduce emissions and avoid global disaster, and we probably won't make it.”
UN report: two years left to reduce emissions and avoid global disaster, and we probably won't make it (msn.com)
 
“The only existential threat humanity faces even more frightening than a nuclear war is global warming going above 1.5 degrees in the next 20 — 10 years. That’d be real trouble. There’s no way back from that.” – Joe Biden, President.
My cmt: This may be the dumbest, most incompetent, incomprehensible comment ever by a President of the United States. Nuclear war is preferable to Global Warming and there’s no way back? Of course, there’s a way back. Technologies exist now to remove CO2 from the atmosphere. In a real emergency, we could reduce the earth’s albedo (reflectivity). It can be done now at relatively low cost (about 5 billion per year) by increasing aerosols (small reflecting particles) in the stratosphere. I am even suspicious that Democrat Politicians hate Big Oil so much that they are willing to exaggerate the “crisis” to keep themselves I power - It’s not an original thought.
 
“The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by an endless series of hobgoblins, most of them imaginary.” - H.L. Mencken
 
“We’ve got to ride this global warming issue. Even if the theory of global warming is wrong, we will be doing the right thing in terms of economic and environmental policy.” - Timothy Wirth, President of the UN Foundation”
 
“Going forward, we predict the temperature will go up. And there are predictions, but it’s pretty difficult with a lot of uncertainty, about faster sea level rise, 10 percent more hurricanes, for example, some intensification of floods and droughts, but we haven’t seen it yet. And the temperature has already gone up by a degree [centigrade]. So it remains to be seen. When you look at what happened in Glasgow [climate conference] where basically China and India and a couple of the other developing countries said, “We need energy and we’ve got the wolf at the door. We got to worry about that. And maybe a couple of generations from now we’ll worry about our emissions.” And that’s not an unreasonable attitude for them to take. We in the US, EU will have a different attitude, but unfortunately, the US is only 13 percent of global emissions. And even if we went to zero, it would be wiped out by the growth in the rest of the world within a decade.” - Steven Koonin, PhD.
https://www.aei.org/economics/what-do-we-know-about-climate-change-my-long-read-qa-with-steven-koonin/
 
CPI is due Wednesday.
 
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 slipped about 0.6% to 4462.
-VIX rose about 3% to 14.21.
-The yield on the 10-year Treasury dipped to 4.278%.
 
PULLBACK DATA:
-Drop from Top: 7%. 25.4% max (on a closing basis).
-Trading Days since Top: 423-days.
The S&P 500 is 6.9% ABOVE its 200-dMA and 0.4% 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 lows).
SPY – I bought a large position in the S&P 500 Friday, 8/14, in my 401k (it has limited choices).
XLY - Consumer Discretionary ETF. (Holding since the October lows - I bought more XLY Monday, 8/21.)
XLE – Added Tuesday, 8/22.
SSO – 2x S&P 500 ETF. Added 8/24.
CSCO – added 9/5.
 
TODAY’S COMMENT:
The S&P 500 dropped back below its 50-dMA suggesting continued weakness for the Index. I’d like to see the Index climb back above its 50-dMA and remain there for successive days. That’s what we need to suggest an end to the recent weakness.
 
Today, market internals were mixed so I don’t see a definite reversal, but advancing volume outpaced declining volume, one good sign. Only Energy, Financial and Utility sectors were up today. We usually look at Utilities divergence vs the S&P 500 as a tell.  Now, it suggests investors were seeking shelter.
 
Breadth has been deteriorating, but the 10-dMA of stocks advancing on the NYSE remains above 50% so markets are still hanging in there. Indicators were little changed.
 
The daily spread of 20 Indicators (Bulls minus Bears) dipped from +1 to -1 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations improved from +38 to +39. (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 remains HOLD: PRICE is Bullish; SENTIMENT, VIX & VOLUME 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 Bullish.
 
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 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.