Housing ... Industrial Production ... 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.
 
POLLS SHOW HARRIS TRAILING ALL DEMOCRATS EXCEPT BIDEN (Newsweek via msn.com)
“...There have been calls for U.S. President Joe Biden to be replaced as the Democratic candidate since the world watched his poor performance in his debate with Donald Trump on June 27. Many have assumed the vice president would be the obvious choice, but a new poll shows she doesn't fare as well as others, and she wasn't among the four who performed best... The results, published in a draft by Politico on Tuesday, showed all of the alternative candidates ahead of Biden, including Harris. The four who performed best, outpacing Biden by roughly 5 points, were U.S. Senator Mark Kelly from Arizona, Maryland Governor Wes Moore, Pennsylvania Governor Josh Shapiro and Michigan Governor Gretchen Whitmer.” Story at...
Kamala Harris Suffers Major Polling Blow (msn.com)
 
HOUSING STARTS / BUILDING PERMITS (Reuters)
“Single-family housing starts, which account for the bulk of homebuilding, fell 2.2% to a seasonally adjusted annual rate of 980,000 units last month, the lowest level since last October, the Commerce Department's Census Bureau said... The report from the Commerce Department on Wednesday also showed permits for future construction of single-family houses dropped to a one-year low last month...” Story at...
https://www.reuters.com/markets/us/us-single-family-housing-starts-decline-june-2024-07-17/
 
INDUSTRIAL PRODUCTION (Detroit News)
“US industrial production posted a solid advance for a second month in June, helped by a pickup in factory output that indicates manufacturing could be regaining some footing. The 0.6% increase in production at factories, mines and utilities followed a revised 0.9% gain a month earlier, marking the biggest two-month advance since late 2021...” Story at...
https://www.detroitnews.com/story/business/2024/07/17/u-s-industrial-output-posts-largest-back-to-back-gains-since-2021/74440130007/
 
CRUDE OIL INVENTORY (EIA)
“U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 4.9 million barrels from the previous week. At 440.2 million barrels, U.S. crude oil inventories are about 5% below the five year average for this time of year.” Report at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf
 
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 declined about 1.4% to 5588.
-VIX rose about 10% to 14.48. 
-The yield on the 10-year Treasury rose to 4.174% (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) remained a Bullish 8 Bear-signs and 17-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) is rising – a bullish sign, though this stat has flopped back and forth.
 

The Bull/Bear, 50-Indicator spread slipped from +10 to +9 (9 more Bull indicators than Bear).
 
TODAY’S COMMENT:
The Overbought / oversold Index remained overbought Wednesday. That does not bode well for Thursday.
 
Wednesday was a statistically significant down-day. That just means that the price-volume move exceeded my statistical parameters. Statistics show that a statistically-significant, down-day is followed by an up-day about 60% of the time. With the Overbought / oversold Index still overbought, Thursday could be in the 40% where the Index does not reverse.
 
Indicators are still bullish, but one can see in the chart of the Summary of Indicator Spread (above) that indicators do tend to be very bullish at tops.
 
The S&P 500 Panic Indicator (based on std deviation analysis) did not show panic today, but it came close. That can happen at a top or bottom. This is a hint that the top was yesterday and I noted yesterday some other top signs, although I didn’t see a definite top indicator.
 
If yesterday (Tuesday) was the top, I don’t expect much more than a 5-7% pullback to around the 50-dMA.
 
Nvidia fell almost 7% today. Seeing the leaders sold is another suggestion we may see a pullback, but as I write this (about 9:40 pm) S&P 500 futures are UP about 0.25%.
 
LONG-TERM INDICATOR: The Long Term NTSM indicator remained HOLD: VOLUME, PRICE, 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 expecting may be here now – let’s see what happens Thursday and Friday. If we do see a correction, it would probably be in the 5-7% range so I will not try to time it.  I am more likely to be a buyer on the dip.
 
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
 
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 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.