Trump Immunity ... Biden Problem ... ISM PMI ... 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.
 
“To be clear, we never have and never will endorse Biden.” - National Border Patrol Union
My cmt: But Biden said they did during the debate; man, is that guy confused!
 
“Thank the Supreme Court for granting Joe Biden godlike official powers. I think his first step should be to declare all Trump golf courses as protected Federal wildlife preserves and seize them by eminent domain...it’s an official act, so it’s cool, right?” – Rick Wilson, co-founder of the Lincoln Project.
 
THE BIDEN PROBLEM (WSJ)
“...One inevitable question is why those closest to Mr. Biden let him run again. We and many others warned them. It was clearly a selfish act for him to seek a second term. But did they really think they could hide his decline from the public for an entire election campaign? It’s hard to believe they wanted this early debate as a way to change the campaign in their favor.
The debate instead has exposed him and their long cover-up of the truth. If they believe that Mr. Trump is the threat to democracy they claim, they did a disservice to the country by nominating Mr. Biden again. They owe an apology to Dean Phillips, the sole Democrat willing to challenge the President.
All of this presents Democrats with an excruciating choice. Mr. Biden has the delegates to win the nomination, and the only way he won’t be the nominee is if he decides to withdraw.” – WSJ Editorial Board. Commentary at...
https://www.wsj.com/articles/joe-biden-donald-trump-debate-cnn-2024-democratic-party-gop-749d776a?mod=opinion_lead_pos2
 
THE DEBATE THAT CHANGED EVERYTHING (The Hill)
“Never before has a debate transformed a presidential race so utterly. The idea of replacing President Biden as his party’s 2024 nominee has become Topic A in national politics; former President Trump has advanced from a slight to heavy favorite in November’s election; and the collective blood pressure of the Democratic Party has gone through the roof... New York Times columnist Thomas Friedman penned a piece noting his long friendship with the president but calling on him to exit the race. Former Sen. Claire McCaskill (D-Mo) told MSNBC’s Rachel Maddow there were “glaring weaknesses in our president.” Also on MSNBC, Joe Scarborough predicted a Trump victory in November ‘unless there’s a change.’” Story at...
The Memo: The debate that changed everything (msn.com)
 
“I sat there and watched it and I could not believe it. I said, not only is this a political hydrogen bomb for him and the Democratic Party, it, you know — what happened? What happened?... Look, let’s step back. If a building blows up in downtown of some city, the story will be what happened and then the story will be how did this happen, why did this happen? And that’s where I’m very, very curious because this was a mega disaster.” – Bob Woodward, Associate Editor, Washington Post.
 
VOTERS WANT BIDEN REPLACED (Deseret News)
“A CBS/YouGov poll conducted over the weekend found that nearly three-fourths of U.S. registered voters — 72% — think Biden does not have the mental and cognitive health to serve as president, up from 65% when the same question was asked in early June. Only 27% of voters think he does have the requisite health, down from 35%... On Friday, the New York Times editorial board agreed. “Mr. Biden has been an admirable president,” the Times’ editorial read. “But the greatest public service Mr. Biden can now perform is to announce that he will not continue to run for re-election.” Story at...
After messy debate, voters want Biden replaced on Dem ticket (msn.com)
 

COURT RULES TRUMP HAS ABSOLUTE IMMUNITY FOR OFFICIAL ACTS (The Guardian)
“The US supreme court has ruled that former presidents are entitled to some degree of immunity from criminal prosecution, a major victory for Donald Trump that guts the 2020 election subversion case against him and any prospect of a trial before November... Trump is accused of overseeing a sprawling effort to subvert the 2020 election... Among the accusations: Trump spread false claims of election fraud, plotted to recruit fake slates of electors, pressured US justice department officials to open sham investigations into election fraud, and pressured his vice-president, Mike Pence, to obstruct Congress’s certification of Joe Biden’s win.
To determine whether Trump’s alleged attempts to overturn the 2020 election results were official acts, the supreme court remanded the case back to the presiding US district judge Tanya Chutkan, who will have to review the indictment line by line.” Story at...
https://www.theguardian.com/us-news/ng-interactive/2024/jul/01/supreme-court-decision-trump-immunity-ruling
My cmt:
In her dissent, Justice Ketanji Brown Jackson wrote, "Departing from the traditional model of individual accountability, the majority has concocted something entirely different: a Presidential accountability model that creates immunity—an exemption from criminal law — applicable only to the most powerful official in our Government."
Justice Roberts responded that the dissenters "strike a tone of chilling doom that is wholly disproportionate to what the Court actually does today...like everyone else, the President is subject to prosecution in his unofficial capacity."
 
Justice Jackson’s dissent and other reactions seem over-the-top to me. Ms. Riguer, below, seems to have the right perspective:
“...the Supreme Court’s punt to lower courts on the question of which actions are in a president’s official capacity leaves some potential for the absolute power of the presidency to be checked. ‘I know the Trump people are crowing about this and saying yes, yes, we won, we won, this is a victory,’ she said. ‘It’s actually not a victory. It’s a pass-off.’”- Leah Wright Rigueur, professor of history at the SNF Agora Institute, Johns Hopkins University.” Story at...
https://apnews.com/live/supreme-court-trump-presidential-immunity-updates
The reason it is a pass-off is that lower courts “categorically rejected any form of Presidential immunity.” Clearly, that’s not correct. Importantly, Justice Roberts wrote: “Trump asserts a far broader immunity than the limited one we have recognized."
 
The only reason this is a victory for Trump is that it will make it practically impossible to resolve the case before the election.
 
ISM MANUFACTURING PMI (ISM)
“The Manufacturing PMI® registered 48.5 percent in June, down 0.2 percentage point from the 48.7 percent recorded in May. The overall economy continued in expansion for the 50th month after one month of contraction in April 2020. (A Manufacturing PMI® above 42.5 percent, over a period of time, generally indicates an expansion of the overall economy.) ...[but]... “U.S. manufacturing activity continued in contraction at the close of the second quarter. Demand was weak again, output declined, and inputs stayed accommodative.” Press release at... 
https://www.ismworld.org/supply-management-news-and-reports/reports/ism-report-on-business/pmi/june/
 
MARKET REPORT / ANALYSIS
-Monday the S&P 500 rose about 0.3% to 5475.
-VIX declined about 2% to 12.18.
-The yield on the 10-year Treasury rose to 4.470% (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 8 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 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:
Market internals were weak again. Twice as many issues were declining on the NYSE compared to those advancing; declining-volume was nearly twice advancing-volume; new 52-week highs did outpace new-lows, but not by much. This continues the back-and-forth flip-flopping of basic internals while the S&P 500 has gone nowhere in the last 2-weeks. This trend is not giving me much confidence in the markets. The 50-Indicator spread wasn’t bad, but it didn’t give a big boost of confidence either.  
 
The Bull/Bear, 50-Indicator spread declined from +9 to +7 (7 more Bull indicators than Bear indicators).
 
There was a new Bear sign today, one that doesn’t occur too often. A 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.  The weak new-high/new-low data at recent tops has already warned that if a correction occurs, it is likely to be at least a 10% decline. (The low VIX value, now at 12.23, does not contradict this indicator.)
 
The last time the 52-week, new-high/new-low data was as weak at a new, all-time high was at the Jan 2022 top, before a 20% correction. Breadth (measured by % of advancing issues on the NYSE) turned down quickly after that top. At this time, breadth is ok, so it may be too soon to panic.
 
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. Perhaps next week we’ll see some signs that will allow me to get more bullish.
 
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 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.