FED Jackson Hole Speech ... New Home Sales ... 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.
 
KAMALA HARRIS OFFERS A “NEW WAY FORWARD” OF PLATITUDES (WSJ)
“The Vice President was vigorous and confident in her DNC acceptance speech, but her lack of substance leaves an opening for Donald Trump.” Opinion at...
https://www.wsj.com/opinion/kamala-harris-speech-dnc-chicago-democrats-2024-election-donald-trump-856cb645?mod=opinion_lead_pos1
My cmt: The strongest part of the speech was her recount of the bi-partisan Border Bill that Trump killed from behind the scenes. It wasn’t a great bill, but it was a big step forward and the Border Patrol Union supported it. Unless Republicans win the Presidency, House and Senate, it is unlikely they will get a better bill. This was a huge blunder. When an opponent gives you something, take it.
 
“The time to refute what Ms. Harris says is when she says it, whatever the issue. Waiting to refute what she says, until after millions of early voters have already voted, makes no sense. Nor is merely denouncing or ridiculing what she said the same as refuting it.” – Thomas Sowell, Senior Fellow at the Hoover Institution from a WSJ opinion piece.
 
My cmt: Kamala Harris is so far left it should be easy to win this election, but Trump seems incapable of logically refuting her radical ideas (Inflation was caused by Greedy grocery stores; Medicare for all; ending right-to-work laws; cash payments to the poor; Green New deal; Net Zero & the war on oil and gas; etc.) Trump’s name-calling reminds me of the first George Bush campaign when Bush called Bill Clinton and the Democrats, “Bozos.” Bush lost.
 
FED JACKSON HOLE SPEECH (CNBC)
“Federal Reserve Chair Jerome Powell laid the groundwork Friday for interest rate cuts ahead... ‘The time has come for policy to adjust,’ the central bank leader said. ‘The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks.’” Story at...
https://www.cnbc.com/2024/08/23/fed-chair-powell-indicates-interest-rate-cuts-ahead-the-time-has-come-for-policy-to-adjust.html
 
NEW HOME SALES (HousingWire.com)
“The U.S. Census Bureau and U.S. Department of Housing and Urban Development reported that new-home sales hit a seasonally adjusted annual rate of 739,000 in July. This is a whopping 10.6% jump compared to June and a 5.6% rise year over year.” Story at... 
https://www.housingwire.com/articles/new-home-sales-pop-but-supply-is-shrinking/
 
MARKET REPORT / ANALYSIS
-Friday the S&P 500 rose about 1.2% to 5635.
-VIX rose about 10% to 15.86. 
-The yield on the 10-year Treasury declined to 3.795% (compared to 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 6 Bear-signs and 18-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) remained +12 (12 more Bull indicators than Bear indicators). The 10-dMA is rising, a bullish sign.
 
TODAY’S COMMENT:
Markets liked Fed Chair Powell’s Jackson Hole speech, not much more to say about that. As a result, we had a new bullish sign today.
 
90% of the volume was up-volume today. The S&P 500 finished 1 point short of meeting the Lowry Research definition of a 90% upside volume day. That’s close enough for me. As Lowry Research noted:  "Thus, our 69-year record shows that declines containing two or more 90% Downside Days usually persist, on a trend basis, until investors eventually come rushing back in to snap up what they perceive to be the bargains of the decade and, in the process, produce a 90% Upside Day" -  Identifying Bear Market Bottoms - Lowry Research.
 
To be accurate, markets were not in a bear market and we did not see 2 90% Downside Days, however, I think today’s action is very bullish and the 90% up-volume day is just more evidence.   
 
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
 
FRIDAY 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.