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

 
“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
“Far more money has been lost by investors in preparing for corrections, or anticipating corrections, than has been lost in the corrections themselves.” - Peter Lynch, former manager of Fidelity’s Magellan® fund.
 

Political commentary from Michael Ramirez at...
https://michaelpramirez.com/index.html
 
“One of the more interesting aspects of the stolen-election conspiracy theory revolves around the number of write-in votes that heavily favored one candidate (“A Belated Apology for ‘2000 Mules’,” Review & Outlook, June 6). Common sense would suggest that if the campaign for Candidate A encourages their voters to vote early via mail-in ballots and Candidate B discourages his voters from voting via mail-in ballots, a majority of mail-in ballots will likely be for Candidate A. It also follows that if more supporters of Candidate A vote early, then a lesser percentage of those voters are casting their vote on Election Day. It would not be unusual then for Candidate B to have an early lead only to lose as the mail-in ballots are counted. But why let logic get in the way of a good conspiracy theory?” - Fred Rothzeid, WSJ Letters. From...
https://www.wsj.com/articles/can-logic-disrupt-the-stolen-election-conspiracy-theory-votes-d02f0c4b?mod=letterstoeditor_article_pos9
 
“A Republican-led effort to block one of President Joe Biden's student loan debt relief programs in court has succeeded just days before it was set to go into effect. Decisions by U.S. District Judges John Ross in Missouri and Daniel Crabtree in Kansas, both appointees of former President Barack Obama, on Monday sided with GOP state attorneys general in thwarting Biden's Saving on a Valuable Education (SAVE) plan, according to Reuters. The SAVE plan, which was set to go into effect on July 1, was initially announced by Biden in 2022 alongside a since-canceled larger plan that would have erased up to $20,000 in student loan debt for tens of millions of borrowers.” - Newsweek. Story at...
Biden Stung by Student Loan Legal Loss Days Before Taking Effect (msn.com)
My cmt: We did point out that this plan was blatantly unconstitutional. 

CONSUMER CONFIDENCE (Conference board)
“Confidence pulled back in June but remained within the same narrow range that’s held throughout the past two years, as strength in current labor market views continued to outweigh concerns about the future. However, if material weaknesses in the labor market appear, Confidence could weaken as the year progresses,” said Dana M. Peterson, Chief Economist at The Conference Board.” Press release at...
https://www.conference-board.org/topics/consumer-confidence
 
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 rose about 0.4% to 5469.
-VIX declined about 3% to 13.33.
-The yield on the 10-year Treasury rose to 4.242% (compared to this time yesterday).
 
MY TRADING POSITIONS:
UWM – Added 5/2/2024; SOLD 6/25/2024
QLD – Added 4/29/2024; SOLD 6/25/2024
XLK – Holding since the October 2022 lows.
 
DWCPF - Dow Jones U.S. Completion Total Stock Market Index. – Added 12/7/2023 when I sold the S&P 500.
“The Dow Jones U.S. Completion Total Stock Market Index, also known as the DWCPF, is a widely used financial index that provides a comprehensive measure of the US equity market. The DWCPF includes all US stocks that are not included in the Dow Jones US Total Stock Market Index, which comprises large-cap and mid-cap companies. As a result, the DWCPF provides a complete picture of the US stock market, including small-cap and micro-cap companies, which are often overlooked by other indexes.” From...
https://fi.money/blog/posts/what-is-dow-jones-u-s-completion-total-stock-market-index-dwcpf
 
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
The Bull/Bear Spread (Bull Indicators minus Bear Indicators) reversed to 14 Bear-signs and 11-Bull. (The rest are neutral. It is normal to have a lot of neutral indicators since many of those are top or bottom indicators that will signal only at extremes.) The 10-dMA of spread (purple line in the chart below) turned lower today – a bearish sign that appears to continue the rollover started a few sessions ago.

TODAY’S COMMENT:
Yesterday there was another Bearish outside reversal day. There was another one just 4 sessions ago and that is the third one in 2-weeks.
-According to Investopedia: “This demonstrates that the bulls had control over the market before the bears took the reins in a meaningful way, signaling a shift in the overall trend... For instance, a stock may have a small move higher on the first day, climb even higher the second day, but then sharply decline by the second day’s end... This formation is considered a strong indicator that the prior upward momentum is waning and a reversal is on the horizon.”
https://www.investopedia.com/terms/o/outsidereversal.asp#:~:text=A%20bearish%20outside%20reversal%2C%20also,by%20the%20second%20day's%20end
My analysis looks only at the S&P 500, so parts of the market may defy the signal and, of course, these signals are not always correct. Still, the Bull/Bear, 50-Indicator spread reversed from +10 to -3 (10 more Bull indicators than Bear indicators). This is a Bearish reversal, although overall, I’ll call it a Neutral indication.
 
The S&P 500 is 12.7% above the 200-dMA and that remains stretched. The bear sign is greater than 12%.
 
LONG-TERM INDICATOR: The Long Term NTSM indicator remained HOLD: PRICE is bullish; VOLUME, VIX & SENTIMENT is neutral.
(The Long-Term Indicator is not a good top-indicator. It can signal BUY at a top.)
 
(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 took profits in QLD, UWM and half of my XLK position. I didn’t like the reversal in indicators today and I wanted to limit losses if the markets should turn down. Leveraged positions lose money twice as fast when markets turn down. I am not too bearish, I just don’t want to hold leveraged positions unless I am fairly sure the market direction is up.
 
I am Neutral on the market as a whole.
 
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)
 
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 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 55% stocks, including stock mutual funds and ETFs. (I’ll need to recalculate this.) I’m usually about 50% invested in stocks, so this is a bullish, over-invested position. 75% is my max stock allocation so I have some cash now.
 
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, usually by using an S&P 500 ETF as I did back in October 2022 and 2023.