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.
 
“You can’t successfully run for president of the United States when your campaign slogan is, ‘I’m only senile some of the time,’ as one commentator pointed out today.” - Sen. John Kennedy, Republican, Louisiana.
 
REPORTERS BLAME RIGHT-WING MEDIA FOR NOT DISCLOSING BIDEN’S INFIRMITY (Jonathon Turley Blog - excerpt)
“...So, in expressing guilt for not pursuing the President’s mental and physical decline, the media is left with explaining that they are just doing what they are trained to do in the new J Schools. They were countering conservatives and framing the news. This is why Washington Post publisher and CEO William Lewis is under attack for dropping a truth bomb on the staff of the Post when he told them:
“We are going to turn this thing around, but let’s not sugarcoat it. It needs turning around,” Lewis said. “We are losing large amounts of money. Your audience has halved in recent years. People are not reading your stuff. Right. I can’t sugarcoat it anymore.”
Staff is now trying to get him fired.” – Commentary at...
https://jonathanturley.org/2024/07/04/reporters-blame-right-wing-media-for-their-failure-to-disclose-bidens-infirmity/
My cmt: They were just countering conservatives? Same thing they did with the Covid origins story.  The most likely Covid source was a lab that studied Covid-like diseases in Wuhan, not a market that has been there for hundreds of years. Since Fox presented the lab-theory, left-wing media had to counter that (and protect Fauci) by strongly refuting the lab-origin story.  Now the lab is recognized by intelligence sources as the most likely origin for Covid. Fox is not out of the woods either – they promoted Trump’s stolen election crap. No wonder the public doesn’t trust media.
 
DIVERSITY WILL MAKE US RICH (WSJ)
“When management consulting firm McKinsey declared in 2015 that it had found a link between profits and executive racial and gender diversity, it was a breakthrough. The research was used by investors, lobbyists and regulators to push for more women and minority groups on boards, and to justify investing in companies that appointed them... Academics have tried to repeat McKinsey’s findings and failed, concluding that there is in fact no link between profitability and executive diversity... It isn’t that a lack of diversity is good for profits either, it’s just there’s no link. This shouldn’t come as a surprise. If companies could boost their profits as easily as McKinsey suggested—the most-diverse firms had a 39 percentage point higher chance of higher-than-average profit margins than the least-diverse—then surely companies would have rushed to promote more women and minority racial groups.” Story at...
https://www.wsj.com/finance/investing/diversity-was-supposed-to-make-us-rich-not-so-much-39da6a23
 
MARKET REPORT / ANALYSIS
-Monday the S&P 500 rose about 0.1% to 5573, a new, all-time high.
-VIX slipped about 0.9% to 12.37.
-The yield on the 10-year Treasury rose to 4.297% (compared to this time yesterday).
 
MY TRADING POSITIONS:
XLK – Holding since the October 2022 lows.
 
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
The Bull/Bear Spread (Bull Indicators minus Bear Indicators) remained 7 Bear-signs and 15-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 climbing, a bullish sign.
 

TODAY’S COMMENT:
The key issue is the Rising Wedge shown in red, dashed-lines on the above chart. As previously noted, this is usually a bearish signal. If it doesn’t resolve to the upside, the pattern suggests a high for the S&P 500 at the end of July. That would suggest the start of a correction. We had prior warnings of a 10% decline. That signal is less certain now. The S&P 500 made another new, all-time high today while the number of issues making new, 52-week-highs on the NYSE improved and remained above my bearish threshold.  There are still worries there (as previously noted), but if this improvement continues it would cancel, or at least postpone, this worrisome indicator. If a correction were to start now, my guess is that it would be around 10%. We still have signs warning of a pullback.
 
The S&P 500 is 13.9% above the 200-dMA and that remains stretched. The bear sign is greater than 12%.
 
Repeating: Statistical analysis of daily moves is indicating that the daily moves have gotten too predictably small, a sign of complacency. This suggests a top within the next 20-days. The last time we saw this indicator was at the 31 July top last year. That was followed by a 10% correction, but overall, as noted before, indicators still look ok.
 
Breadth measured on differed time-frames remains Bullish. The Bull/Bear, 50-Indicator spread remained +8 (8 more Bull indicators than Bear indicators).
 
LONG-TERM INDICATOR: The Long Term NTSM indicator remained HOLD: PRICE is bullish; 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 “Friday Rundown” of indicators.)
 
BOTTOM LINE
No change: I am Neutral on the market. If the Rising Wedge pattern on the S&P 500 is to be believed, and if it doesn’t breakout higher, the pattern would resolve around the end of the month. That would signal the start of a pullback.
 
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 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 50% stocks, including stock mutual funds and ETFs. I’m usually about 50% invested in stocks, so this is normal 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.