Biden Quits Campaign ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

 
BIDEN BOWS OUT
“I believe it is in the best interest of my party and the country for me to stand down and to focus solely on fulfilling my duties as president for the remainder of my term.” – President Joe Biden.
 
My cmt: Party first – country second?? This was a written Biden statement so there was consideration in the wording. Unbelievable.
 
HANNITY SAYS BIDEN SHOULD RESIGN THE PRESIDENCY
“Democracy is dead in the Democratic Party... If he [President Biden] had any decency at all he would leave the White House this week and never come back.” – Sean Hannity, Fox talking head...
...My cmt: Talk about hypocrisy - who is he kidding? Democracy died in the Republican party in 2020 when Trump claimed he won the Presidency; put forth a set of phony Trump-supporting, Electoral College members; attempted to overthrow the election by having VP Pence recognize those illegal Electoral College votes; and lied about the “stolen election” for years.
 
Shockingly, according to the FBI, there were cell-phone conversations between Proud Boy rioters and White House staff prior to the 6 January riots, but the content of those conversations was never determined, or at least, never released. This is circumstantial evidence that Trump may have had a direct hand in the January 6 riots.
 
I voted for Trump in 2020 – never again. My oath as an officer in the military and a DOD civilian stated that I would defend against “enemies of the Constitution.” Trump is clearly an enemy of the Constitution. If he is elected president, Trump will pardon the January 6^th rioters. That makes my stomach turn.
 
SORKIN SAYS DEMOCRATS SHOULD NOMINATE MITT ROMNEY (The Independent)
“In an essay published by The New York Times, [‘West Wing’ creator Aaron] Sorkin drew parallels between real-world events and his acclaimed TV series... Describing a plotline in which Bartlet [played by Martin Sheen  in the series] chose to run for re-election despite being diagnosed with a serious illness...
‘...What if Bartlet’s opponent had been a dangerous imbecile with an observable psychiatric disorder who related to his supporters on a fourth-grade level and treated the law as something for suckers and poor people?...and was a hero to white supremacists? We’d have had Bartlet drop out of the race and endorse whoever had the best chance of beating the guy....”
...Sorkin then proposed that the Democrats nominate former Republican presidential nominee Mitt Romney, in an attempt to unify the US public and fend off a Trump victory.”
The West Wing creator Aaron Sorkin pens essay telling Democrats to nominate Mitt Romney for president (msn.com)
My cmt: Zero % chance of Romney being the Democratic nominee even though Romney could win handily. Nearly Zero chance that anyone but Harris will be the nominee. Sorkin has already disavowed his weekend Times piece.
 
US, GERMANY FOIL RUSSIAN PLOT (WSJ)
“A Russian plot to kill one of Europe’s most prominent defense-industry executives signals a significant escalation in Moscow’s covert efforts to sabotage Western weapons production and weaken support for Ukraine, Western officials said. Earlier this year, the U.S. warned Germany that Moscow had set in motion a plan targeting Armin Papperger, CEO of Rheinmetall, U.S. and German officials said. The German manufacturer of tanks, armored vehicles and ammunition has been integral to Western efforts to support Ukraine as it fights to fend off invading Russian forces... A German Interior Ministry...said Moscow was waging a campaign of threats, cyberattacks, disinformation, sabotage and at least one act of terrorism in Germany to weaken Berlin’s support for Kyiv.” Story at...
https://www.wsj.com/world/europe/u-s-germany-foil-russian-plot-to-kill-defense-executive-9cc497f3
 
BUBBLE NEARING ITS PEAK (WSJ)
“...now he [Mark Spitznagel, founder and chief Investment officer of Universa Investments] sees a major selloff approaching with stocks potentially losing more than half of their value. Yet predicting even approximately when the market will crash is a lot harder than hedging a portfolio against it—many would say impossible. In the same way that so many fund managers and strategists always sound optimistic, scary talk sounds like a shrewd marketing exercise for someone insuring against tail risk. ‘I think we’re on the way to something really, really bad—but of course I’d say that,’ joked Spitznagel in an interview this week... High public indebtedness and valuations make a Washington-led rescue harder to pull off. He sees today’s benign slowdown in inflation overshooting and says the U.S. economy could enter a recession by the end of the year.”
https://www.wsj.com/finance/investing/greatest-bubble-nearing-its-peak-says-black-swan-manager-6f531740
 
MARKET REPORT / ANALYSIS
-Monday the S&P 500 rose about 1.1% to 5564.
-VIX fell about 10% to 14.91. 
-The yield on the 10-year Treasury rose to 4.254% (compared to this time, prior trading day).
 
MY TRADING POSITIONS:
XLK – Holding since the October 2022 lows.
UWM – added 7/15.
 
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
The Bull/Bear Spread (Bull Indicators minus Bear Indicators) slipped but are still Neutral at 13 Bear-signs and 12-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 Bull/Bear, 50-Indicator spread fell from Zero to -1 (1 more Bear indicator than Bull).
 
TODAY’S COMMENT:
The above “Greatest Bubble” article predicts a crash “approaching” and Mark Spitznagel predicts a recession by the end of the year.  Given that markets anticipate the economy by roughly 6-months, we should be worried now if one agrees that a crash is coming. While markets are now in a weak period, it seems highly unlikely that a major decline is starting - breadth remains in good shape.
 
The article states: “Yet predicting even approximately when the market will crash is a lot harder than hedging a portfolio against it - many would say impossible.”  I disagree with that statement, too. Significant crashes have been preceded by a significant bearish call by my indicators - we saw zero bullish indicators in advance of both the 34% Covid crash (2020) and the 2022, 25% decline. (Of course, there’s no guarantee that will be the case in the future. A crash is possible without warning, but I suspect, not likely unless it is news driven.)
 
Monday was a statistically significant up-day. That just means that the price-volume move exceeded my statistical parameters. Statistics show that a statistically-significant, up-day is followed by a down-day about 60% of the time.  This is the 7^th statistically significant day in the last 15-sessions. This is the type of action that we see around tops. My guess is that the market weakness we have been seeing is probably not over. It could be, but I doubt it.
 
LONG-TERM INDICATOR: The Long Term NTSM indicator improved to HOLD: PRICE is bearish; VOLUME, VIX & SENTIMENT are 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 “Summary of 50” indicator.
 
BOTTOM LINE
I am still Neutral to Bearish on the market; the pullback we have been experiencing is probably not over yet.
 
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

MONDAY MARKET INTERNALS (NYSE DATA)

My basket of Market Internals improved to BUY. (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’m usually about 50% invested in stocks when markets are stretched; my current stock position is slightly above the norm. (75% is my max stock allocation when I am strongly bullish.)
 
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.