Durable Goods ... Dallas FED Manufacturing ... 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.
DURABLE GOODDS (Investopedia)
“Demand at U.S. manufacturers is soaring if you include
aircraft — and stalling if you don’t... the Census Bureau’s report Monday on
July durable goods orders...showed manufacturers received 9.9% more orders than
they did in June... If you leave out transportation—a category that’s prone to
wild swings each month—orders actually fell 0.2%.” Story at...
https://www.investopedia.com/durable-goods-orders-soared-on-aircraft-orders-in-july-8701268
DALLAS FED MANUFACTURING INDEX (Dallas Federal Reserve)
“Texas factory activity exhibited little growth in
August, according to business executives responding to the Texas Manufacturing
Outlook Survey. The production index, a key measure of state manufacturing
conditions, inched up three points to 1.6, with the low reading signaling only
slight growth in output from July. Most other measures of manufacturing
activity continued to indicate declines this month, though they were less
negative than in July.” Report at...
https://www.dallasfed.org/research/surveys/tmos/2024/2408
MARKET REPORT / ANALYSIS
-Monday the S&P 500 declined about 0.3% to 5617.
-VIX rose about 2% to 16.15.
-The yield on the 10-year Treasury rose to 3.82%
(compared to about this time, prior trading day).
MY TRADING POSITIONS:
XLK – Holding since the October 2022 lows.
XLK – added more 7/26. This reestablishes the position I
had before this recent weakness.
UWM – added 7/15.
QLD – added 7/24.
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
The Bull/Bear Spread remained well to the bull side at 7
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 Bull/Bear, 50-Indicator spread (Bull Indicators minus
Bear Indicators) declined to +9 (9 more Bull indicators than Bear indicators).
The 10-dMA is still rising, a bullish sign.
TODAY’S COMMENT:
The Overbought / Oversold Index remains overbought so a
down-day Tuesday would not be a surprise. This is a Breadth indicator and
breadth is improving quickly due to investors buying the small-cap names so one
wonders whether the signal remains valid. RSI is overbought too, but I prefer
to use this indicator with Bollinger Bands.
They are not oversold so I won’t worry about the RSI signal.
LONG-TERM INDICATOR: The Long Term NTSM indicator
remained HOLD: VOLUME is bullish; VIX, SENTIMENT & PRICE are neutral. (This
indicator is more valuable for Sell-signals and during major Bear Markets.)
{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 2022 (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 the 2022 bear market, based on the bearish “Summary of 50”
indicator.}
BOTTOM LINE
I remain 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. Utilities are leading momentum due to
the flight-to-safety trade from the recent pullback. I think Technology (XLK) is probably a better
choice.
*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 75% stocks, including stock mutual funds and ETFs. I’m
usually about 50% invested in stocks when markets are stretched; my current
stock position is 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.
