Unemployment Rate ... Jobs Report ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

 
From...
https://www.reviewjournal.com/opinion/michael-ramirez/cartoon-the-policy-harris-needs-to-propose-next-3148340/?utm_campaign=widget&utm_medium=latest&utm_source=opinion_michael-ramirez&utm_term=CARTOON%3A%20The%20policy%20Harris%20needs%20to%20propose%20next
 
"Think of how stupid the average person is, and realize half of them are stupider than that." - George Carlin
 
“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.
 
AUGUST JOBS REPORT / UNEMPLOYMENT  RATE (Yahoo Finance)
“Data from the Bureau of Labor Statistics released Friday showed the labor market added 142,000 nonfarm payroll jobs in August, fewer additions than the 165,000 expected by economists... the unemployment rate fell to 4.2% from 4.3% in July.” Story at...
https://finance.yahoo.com/news/august-jobs-report-unemployment-rate-falls-to-42-labor-market-adds-142000-jobs-182656446.html
 
MARKET REPORT / ANALYSIS
-Friday the S&P 500 fell about 1.7% to 5408.
-VIX rose about 12% to 22.38. (The Options Players don’t seem worried.) 
-The yield on the 10-year Treasury declined to 3.716% (compared to about this time, prior trading day).
 
MY TRADING POSITIONS:
XLK – Holding since the October 2022 lows.
XLK – added more 7/26.
UWM – added 7/15.
QLD – added 7/24. Reduced 9/6.
 
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
The Bull/Bear Spread declined to a bear position at 14 Bear-signs and 5-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) declined to -9 (9 more Bear indicators than Bull indicators). The 10-dMA continued down, a bearish sign.
 
TODAY’S COMMENT:
Indicators continue down. Breadth indicators have not broken down yet and they comprise 3 of the 5 bullish indicators Friday. At least that is one point of good news.
 
The S&P 500 has dropped 4.2% from its recent high at the end of August and 4.6% below the all-time high of 5667.
 
To answer the question of how far this pullback may go, we see the following: The S&P 500 is 0.3% above its 50-day moving average and 5.1% above its 200-dMA. It is 4.6% above the 5 August bottom of the recent 8.5% correction. This suggests that the bottom of this pullback is likely to be no more than 5% below today’s close. This looks like a retest of the recent low and not much more. I doubt that the 50-dMA will hold.
 
I reduced my invested position to about 50% Friday. This is due to an abundance of caution and to limit losses. Indicators continue to suggest that this is not the time to be so far overinvested - 75% in stocks was too high for me since risk is  elevated.
 
BOTTOM LINE
I reduced stock holdings, but I am not overly bearish.  This pullback looks like a routine retest of the prior low of 5186. If so, why did I sell? Answer: I could be wrong.
 
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 50% 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.