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.
 
“Vice President Kamala Harris pledged to eliminate taxes on tips in the service and hospitality sectors if she wins the presidency, echoing the same proposal former President Donald Trump announced months earlier.” - CNBC
 
"A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world's greatest civilizations has been 200 years." - Alexis de Tocqueville (1805-1859)
 
“Didn’t President Biden promise his Inflation Reduction Act (IRA) would create millions of green jobs? In case he missed the news, SunPower, one of the country’s top rooftop solar installers, this week declared bankruptcy... The 39-year-old SunPower is the latest solar rooftop business to fail this year. Others include Titan Solar Power and Sunworks... The cost of panels has also increased amid overall inflation and President Biden’s tariffs, which were backed by domestic manufacturers and Democrats in Congress. Solar installers warned the tariffs would hurt their industry, and they have. Jobs that Mr. Biden’s subsidies giveth, his tariffs and inflation taketh.” – WSJ Editorial Board. Opinion at...
https://www.wsj.com/opinion/sunpower-bankruptcy-inflation-reduction-act-subsidies-green-energy-joe-biden-kamala-harris-a8bef0c6?mod=opinion_lead_pos2
My cmt: Sun Power received significant funding from the Obama administration, proving again that Government money is an inefficient way to create societal change.
 
CLIMATE POLICIES WILL LEAVE THE MIDWEST IN THE DARK (WSJ-excerpt)
“Minnesota Gov. Tim Walz last year signed one of America’s most aggressive climate laws, mandating that 100% of the state’s electricity come from carbon-free sources by 2040... We analyzed seven Great Lakes states with connected electricity grids—Illinois, Indiana, Minnesota, Michigan, Ohio, Pennsylvania and Wisconsin. For decades, these states have bought and sold electricity in regional markets, benefiting from the abundance of reliable power generated from sources like coal, natural gas and nuclear...  
...all of them are moving away from those reliable sources toward unreliable wind and solar power, in pursuit of net-zero greenhouse gas emissions... Where will states like Minnesota turn when the wind stops blowing and the sun stops shining, two inevitable daily occurrences?... State leaders need to wake up, and soon. While there’s no chance Mr. Walz will abandon his signature climate policy during a national campaign, no state should endanger its economy and residents by pursuing net zero.” - Joshua Antonini, research analyst and Jason Hayes, director of energy and environmental policy at the Mackinac Center for Public Policy.
 
SPINELESS BIDEN LEADS TOWARD WWIII (The Telegraph, UK)
“The [Biden] administration seems to have forgotten – if it ever held this knowledge in the first place – that when you berate an ally in public, your foes listen carefully and adjust their tactics. When you telegraph your goals and the limits of your stomach for pursuing them (“no American boots on the ground”), your enemies are taking notes. When you signal your desire to withdraw from the region, bad actors prepare for the vacuum. As a result, the Middle East, and indeed the globe, now finds itself closer to all-out war than it has been for decades.” Story at...
The Telegraph - MSN
 
ANOTHER BIDEN STUDENT LOAN FORGIVENESS PLAN BLOCKED (Bloomberg)
“A Biden Administration debt relief plan that could cancel billions in student loans was halted Friday by a federal appeals court.” Story at...
https://news.bloomberglaw.com/litigation/biden-student-loan-plan-gets-blocked-again-by-appeals-court
My cmt: I saw some reports that “Republican appointed judges” ruled against Biden. The Constitution is very clear that Congress controls the purse strings of the country, not the Executive Branch. The President has no authority to cancel debts owed to the United States. To pretend this is a partisan matter is just another attempt by left leaning media to divide the country.
 
EARNINGS (FactSet)
“To date, 91% of the companies in the S&P 500 have reported earnings for the second quarter. Of these companies, 78% have reported actual EPS above the mean EPS estimate, which is above the 5-year average of 77% and above the 10-year average of 74%. In aggregate, earnings have exceeded estimates by 3.5%, which is below the 5-year average of 8.6% and below the 10-year average of 6.8%.” Analysis at... 
https://insight.factset.com/market-is-punishing-negative-eps-surprises-more-than-average-for-q2
My cmt: Overall, this looks bullish.
 
MARKET REPORT / ANALYSIS
-Monday the S&P 500 as unchanged at 5344.
-VIX rose about 2% to 20.23. 
-The yield on the 10-year Treasury declined to 3.907% (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.
DWCPF - Dow Jones U.S. Completion Total Stock Market (TSM) Index, a broad market index made up of stocks of U.S. companies not included in the S&P 500 Index. – Added 7/29/2024
 
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
The Bull/Bear Spread count was 13 Bear-signs and 8-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) improved from -7 to -5 (5 more Bear indicators than Bull indicators). The 10-dMA rose slightly, confirming the buy signal from 3 days ago.
 
TODAY’S COMMENT:
The 50-Indicator spread is now rising and that’s the bullish sign we needed to confirm the buy signal from last week.  Is it foolproof? No, but the probabilities are now to the bullish side. I’m not predicting a decline, but we could see a decline back to the prior lows.  Such a decline would not negate the buy signals.
 
LONG-TERM INDICATOR: The Long Term NTSM indicator remained SELL: VOLUME & VIX are bearish; SENTIMENT & PRICE are neutral.
This indicator can be late – now is the time to buy not sell.
 
{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’m bullish, 75% invested in stocks – I’m maxed out.
 
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.  I think Technology (XLK) is probably the best ETF to own now based on recent price action.
 
*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.