... 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.
 
"Why is it a penny for your thoughts, but you have to put your two cents in? Somebody’s making a penny." – Steven Wright
 
GREEDFLATION: HIGH PRICED BALONEY (WSJ)
“Since year-over-year inflation cooled to 2.9% in July from its 2022 peak of 9.1%, a search has begun for the culprit of the original inflation boost. Some politicians blame what they call “greedflation” or corporate “price gouging.” The truth is that government economic intervention was the problem, and free-market policies are the only remedy... Vice President Kamala Harris should heed the lesson of President Richard Nixon’s failed wage and price controls in 1971. Such measures create shortages and fuel ever more inflation by disrupting the pricing signals that match supply with demand. Only free markets, along with good fiscal and monetary policies, will provide us with the products we want while taming inflation.” - Philip S. Coles, Associate Professor at Lehigh University’s College of Business. Commentary at...
https://www.wsj.com/opinion/greedflation-is-high-priced-baloney-economy-policy-9418cf4e
 
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 slipped about 0.2% to 5597.
-VIX rose about 8% to 15.88. 
-The yield on the 10-year Treasury declined to 3.818% (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 zero Bear-signs and 20-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 +18 to +20 (18 more Bull indicators than Bear indicators). The 10-dMA is rising; the trend in price is clearly up.
 
TODAY’S COMMENT:
As expected, we got a down day today.  That is certainly not a surprise given that there had been 8 trading sessions in a row that finished higher. Indicators continue to look good. No problem.  
 
The Overbought / Oversold Index remains overbought so we may see another down-day Wednesday.
 
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’m 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
 
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 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.