PCE Prices ... Personal Income ... Consumer Spending ... Chicago 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.
DEMOCRATS DECEPTION (WSJ)
“As they campaign for office, they present a kind of
idealized version of themselves to the electorate as mainstream Americans,
seeking merely to bring a little unity and compassion to a fundamentally great
country in need of reform. Once in office they act as if they have a mandate to
remake a benighted country, to reorder an unjust system, to replace American
exceptionalism with European social democracy, and to rewrite the nation’s
values with the precepts of their cultural Marxism.... Is anyone fooled? The answer, I am afraid, is yes. Every time.” - Gerard
Baker, Wall Street Journal’s Editor at Large.
My cmt: This was certainly true of Biden. He campaigned
in the center and governed from the left.
PCE PRICES / PERSONAL INCOME / CONSUMER SPENDING (CNBC)
“The Commerce Department reported Friday that the personal
consumption expenditures price index rose 0.2% on the month and was up 2.5%
from the same period a year ago, exactly in line with the Dow Jones consensus
estimates... Excluding volatile food and energy prices, core PCE also increased
0.2% for the month but was up 2.6% from a year ago... personal income increased
0.3%, slightly higher than the 0.2% estimate, while consumer spending rose
0.5%, in line with the forecast...” Story at...
https://www.cnbc.com/2024/08/30/pce-inflation-july-2024.html
CHICAGO PMI (Advisor Perspectives)
“The latest Chicago Purchasing Manager's Index (Chicago Business
Barometer) edged up to 46.1 in August from 45.3 in July. The latest reading is
better than the 45.0 forecast but keeps the index in contraction territory for
a ninth straight month.” Story at...
https://www.advisorperspectives.com/dshort/updates/2024/08/30/chicago-pmi-edged-higher-in-august
MARKET REPORT / ANALYSIS
-Friday the S&P 500 rose about 1% to 5648.
-VIX fell about 4% to 15.00.
-The yield on the 10-year Treasury rose to 3.909%
(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 4
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) improved to +12 (12 more Bull indicators than Bear
indicators). The 10-dMA continued down, but this is a 10-day average so it will
be slower to turn higher; no worry yet.
TODAY’S COMMENT:
Volume was low until investors decided today’s news was
good. Markets took off a little after noon
and plowed higher into the close. Volumes on the NYSE finished 20% higher than
the monthly norm suggesting a return of the Bulls.
My system counts strong Utility (XLU) momentum as a
bearish sign, but that momentum is not necessarily always negative. Now that interest rates are expected to fall,
Utilities are seen as a dividend play, making them a buy for conservative
investors. In addition, utilities need to expand to meet AI server electrical
demand, suggesting they are a growth play. I’ve never been too sure about that,
but my bearish position for this indicator may not be warranted. It is one of
the 4 bearish indicators in today’s 50-indicator total, but there are plenty of
Bull signs.
Charts are bullish; stocks had a strong close; new-highs
improved by more than 7 standard deviations; and indicators are very bullish.
“Looking good, Billy Ray! Feeling good, Louis!”
LONG-TERM INDICATOR: The Long Term NTSM indicator
remained HOLD: VIX, VOLUME, 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.
*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.
