Trump Immune? ... 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.
 
BIDEN COMMENTS ON SUPREME COURT IMMUNITY DECISION
“There are no kings in America. Each, each of us is equal before the law. No one, no one is above the law, not even the president of the United States, today’s Supreme Court decision on presidential immunity, that fundamentally changed. For all practical purposes, there are virtually no limits on what the president can do. It’s a fundamentally new principle and it’s a dangerous precedent because the power of the office will no longer be constrained by the law even including the supreme court of the United States... any president – including Donald Trump – will now be free to ignore the law... I concur with Justice Sotomayor’s dissent today. Here’s what she said – she said, ‘In every use of official power, the president is now a king above the law. With fear for our democracy, I dissent,’ end of quote. So should the American people dissent. I dissent.” - President Biden.
 
SOTOMAYOR DISSENTS
"The President of the United States is the most powerful person in the country, and possibly the world. When he uses his official powers in any way, under the majority's reasoning, he now will be insulated from criminal prosecution... Orders the Navy's Seal Team 6 to assassinate a political rival? Immune. Organizes a military coup to hold onto power? Immune. Takes a bribe in exchange for a pardon? Immune. Immune, immune, immune." – Supreme Court Justice Sonia Sotomayor in her dissenting opinion on Trump’s immunity case.
 
MY CMT: As I noted yesterday, Justice Roberts responded that the dissenters "...strike a tone of chilling doom that is wholly disproportionate to what the Court actually does today [ruling a President has immunity for official acts]...like everyone else, the President is subject to prosecution in his unofficial capacity." During the Nixon administration the Supreme Court ruled that the President cannot be sued in civil court for official acts. This ruling is a very logical extension of that prior decision.
 
Does Sotomayor (Yale Law school) actually believe that courts in the US, including the Supreme Court, would rule that murdering political rivals is an “official act?” This sort of hyperbolic crap by sitting Justices and the President of the United States show that they lack reason...
rea·son  /ˈrēz(ə)n/  noun
“the power of the mind to think, understand, and form judgments by a process of logic.”
...or the Court’s liberal wing (Sotomayor, Kagan & Jackson) is pandering to the Democrats. Your choice...
 
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 rose about 0.6% to 5509, a new, all-time high.
-VIX declined about 2% to 12.03.
-The yield on the 10-year Treasury declined to 4.436% (compared to this time yesterday).
 
MY TRADING POSITIONS:
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) was 9 Bear-signs and 16-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 up, a bullish sign, although it has bounced back and forth so much that it is hard to get too confident.
 
We’re still waiting to see if the Index can break above the red trend line in the chart below.

TODAY’S COMMENT:
The S&P 500 made a new, all-time high today and, once again, the number of issues on the NYSE was low. This demonstrates a very narrow advance that is unhealthy.  In the past, this indication has preceded corrections of at least 10%. In addition, 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 indicators still look ok. The Bull/Bear, 50-Indicator spread improved from +6 to +7 (7 more Bull indicators than Bear indicators).
 
The number issues advancing on the NYSE over different time periods is not yet confirming a correction is imminent.  The shortest time frame I look at is the 10-dMA of issues advancing on the NYSE and it was above 50%, indicating that more than half of all issues on the NYSE have advanced over the last 2-weeks. That short-term indicator is the first of the breadth snapshots that will warn of possible trouble sooner rather than later. Currently, >50% is bullish.
 
Tuesday 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.  Tops almost always occur on Statistically-significant, up-days, but not all statistically-significant, up-days occur at tops. Today could be a short-term top, but there are only 3 top indicators that are bearish and that is not a strong top signal.
 
The S&P 500 is 13% 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 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, but I may trade or trim my position in DWCPF.  Smaller stocks have not worked as well as larger “safe” companies over the last several months.
 
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 remained 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’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.