“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 rose about 0.1% to 4383.
-VIX fell about 2% to 14.45.
-The yield on the 10-year Treasury dipped to 4.492%.
PULLBACK DATA:
-Drop from Top: 8.6%. 25.4% max (on a closing basis).
-Trading Days since Top: 465-days.
The S&P 500 is 3% ABOVE its 200-dMA and 0.9% ABOVE its 50-dMA.
*I won’t call the correction over until the S&P 500 makes a new-high; however, evidence suggests the major bear-market bottom (25% decline) 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:
Wow. 8 straight days up! That’s 8 out of the last 10-days. I count this stat as an indicator so if it goes up another day, that would flip this indicator to negative. Usually, after this many up-days in a row, there will be some consolidation. After a bottom though, all bets are off. When investors get wrong-sided, there can be a rush back to buy. With that in mind, I won’t be concerned if we have another up-day.
The bigger problem is that breadth isn’t improving as fast as we would like. At this point, it is just another worry. We’ll have to see if breadth improves. Most indicators remain solidly bullish.
The daily spread of 20 Indicators (Bulls minus Bears) remained
+8 (a positive number is bullish; negatives are bearish); the 10-day smoothed
sum that smooths the daily fluctuations improved from zero to +18. (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 BUY: PRICE, VOLUME & SENTIMENT are bullish; VIX is neutral.
Even if we see 9-days in a row up, the above long-term
indicator would still be BUY.
(The important major BUY in this indicator was on 21
October 2022, 7-days after the bear-market 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
WEDNESDAY MARKET INTERNALS
(NYSE DATA)
My basket of Market Internals declined 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 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.
-Wednesday the S&P 500 rose about 0.1% to 4383.
-VIX fell about 2% to 14.45.
-The yield on the 10-year Treasury dipped to 4.492%.
-Drop from Top: 8.6%. 25.4% max (on a closing basis).
-Trading Days since Top: 465-days.
The S&P 500 is 3% ABOVE its 200-dMA and 0.9% ABOVE its 50-dMA.
*I won’t call the correction over until the S&P 500 makes a new-high; however, evidence suggests the major bear-market bottom (25% decline) was in the 3600 area and we called a buy on 4 October 2022.
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.
Wow. 8 straight days up! That’s 8 out of the last 10-days. I count this stat as an indicator so if it goes up another day, that would flip this indicator to negative. Usually, after this many up-days in a row, there will be some consolidation. After a bottom though, all bets are off. When investors get wrong-sided, there can be a rush back to buy. With that in mind, I won’t be concerned if we have another up-day.
The bigger problem is that breadth isn’t improving as fast as we would like. At this point, it is just another worry. We’ll have to see if breadth improves. Most indicators remain solidly bullish.
I remain bullish.
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 30 momentum ranking follows:
For more details, see NTSM Page at…
https://navigatethestockmarket.blogspot.com/p/a-system-for-trading-dow-30-stocks-my_8.html
My basket of Market Internals declined 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.)
