CPI ... Crude Inventories ... 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.
 
CPI (CNBC)
“The consumer price index, a broad measure of goods and services costs across the U.S. economy, increased 0.2% for the month, in line with the Dow Jones consensus... That put the 12-month inflation rate at 2.5%, down 0.4 percentage point from the July level... However, the core CPI, which excludes volatile food and energy prices, increased 0.3% for the month...” Story at...
https://www.cnbc.com/2024/09/11/cpi-inflation-report-august-2024-.html
 
CRUDE INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 0.8 million barrels from the previous week. At 419.1 million barrels, U.S. crude oil inventories are about 4% below the five-year average for this time of year.” Story at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf
 
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 rose about 1.1% to 5554.
-VIX declined about 7% to 17.68. 
-The yield on the 10-year Treasury rose to 3.661% (compared to about this time, prior trading day).
 
MY TRADING POSITIONS:
XLK – Holding since the October 2022 lows.
XLK – reduced 9/9.
UWM – added 7/15.
QLD – added 7/24. Reduced 9/6.
 
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
The Bull/Bear Spread improved, but remained in a bear position at 14 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 to -6 (6 more Bear indicators than Bull indicators). The 10-dMA continued down; that remains a concern.
 
TODAY’S COMMENT:
The S&P 500 dropped to 5408 thus creating a small double bottom at 5408. That was the low just 3-days ago, so while this was a double bottom, it may not be the strong bullish-signal for which we were hoping. It wasn’t the only bullish sign.
 
On Wednesday, there was a Bullish Outside Reversal Day.
“Outside reversal is a price chart pattern in investing that occurs when an asset’s high and low prices for the day exceed the high and low prices of the previous day. It is also known as a bullish or bearish engulfing pattern. It can indicate a change in market trend and provide a trading signal to investors.” From...
https://due.com/terms/outside-reversal/
 
I mentioned the Hindenburg Omen signal yesterday. Today, there was another Hindenburg Omen.  That signal remains in effect until the McClean Oscillator turns positive.
 
The 10-dMA of Breadth (% of stocks advancing on the NYSE) remains below 50%, i.e., half of all stocks on the NYSE have been falling over the last 2 weeks, although it did improve some today.
 
BOTTOM LINE
I am bearish, but not overly so.  Indicators are bearish enough to suggest that this pullback is not over. Indicators are still suggesting a retest of the prior low of 5186, but that is far from certain. It is always possible that the low was around mid-day today and the pullback is over.
 
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
 
WEDNESDAY MARKET INTERNALS (NYSE DATA)

My basket of Market Internals improved to 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 50% stocks, including stock mutual funds and ETFs. I’m usually about 50% invested in stocks when markets are stretched. (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.