Best DOW Stocks ... Best ETFs … Stock Market Analysis ... Recession Now? ... Recession in 2023

 
“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.

Political commentary at...
https://michaelpramirez.com/index.html
More on the same subject...
NO MORE DEFENSE OF THE ADMINISTRATIVE STATE (WSJ)
“In Chevron [1984 Supreme Court Case], the justices held that when Congress enacts an “ambiguous” statute, courts are obliged to defer to any “reasonable” interpretation offered by an executive-branch agency [Using the Code of Federal  Regulations, the Executive Branch promulgates all kinds of rules that have the effect of Law]...Under Chevron, as Chief Justice John Roberts noted for the court in West Virginia [the recent Supreme Court case that stopped EPA from regulating CO2], the absence of a political consensus to address difficult problems led to undertake extravagant regulatory efforts. Among them were the Centers for Disease Control and Prevention’s attempting to dictate housing policy, the Occupational Safety and Health Association’s driving vaccination policy, and, in this case, the Environmental Protection Agency’s creating national energy policy...But this approach corroded democratic accountability by freeing lawmakers from the duty to legislate clearly. West Virginia is an important step in returning responsibility for solving the nation’s problems where it belongs, to Congress...The power of the administrative state is certain to recede, bolstering democratic accountability, economic growth and liberty.” Opinion at... 
https://www.wsj.com/articles/no-more-deference-to-the-administrative-state-west-virginia-v-epa-chevron-major-questions-john-roberts-regulation-democracy-congress-11657475255?mod=newsviewer_click
 
In my career with the Corps of Engineers I found the rules from Environmental Agencies (Fish and Wildlife and National Marine Fisheries) went far beyond the Endangered Species Act (ESA). The ESA is concerned with sustaining a species; Agencies rules often were focused on preventing minor impacts to individual animals. I see this now at Cape Hatteras National Seashore where significant areas of Beach at the eastern-most Point are closed nearly all summer to accommodate a few birds. Oddly, endangered and threatened, bird-populations at Cape Hatteras have declined in the last 15-years since beach closures were first initiated...a counter intuitive result.  It could be that the endangered species can’t compete with large cormorant populations that have increased at Hatteras due to beach closures. 
 
THE US IS LACKING A KEY ASPECT OF ANY RECESSION (YahooFinance)
“...So while the stock market has tumbled and economic activity has decelerated since the beginning of the year, the labor market has added 2.74 million jobs during the same period with gains in every month...For now, the strong labor market is keeping the economy from tipping into a recession. But the longer the Fed has to tighten monetary policy aggressively, the more likely it becomes that people start to lose jobs as part of the economic pain required to rein in prices.”  Story at...
https://finance.yahoo.com/news/millions-get-jobs-as-gdp-falls-155824972.html
 
RECESSION IN 2023 – WELLS FARGO (YahooFinance)
“...a stock market downturn isn’t the only thing to worry about, as Wells Fargo now sees the U.S. economy slipping into a mild recession in mid 2023. “In our view, the recession will be more or less equivalent in magnitude and duration to the downturn of 1990-1991. That recession lasted for two quarters with a peak-to-trough decline in real GDP of 1.4%,” the bank’s chief economist Jay Bryson wrote in a note last month.” Story at...
https://finance.yahoo.com/news/wells-fargo-sees-recession-hitting-171000135.html
 
MARKET REPORT / ANALYSIS
-Monday the S&P 500 slipped about 1.2% to 3899.
-VIX increased about 6.2% to 26.17.
-The yield on the 10-year Treasury slipped to 2.995%.
 
PULLBACK DATA:
-Drop from Top: 19.6% as of today. 23.6% max.
-Trading Days since Top: 129-days.
The S&P 500 is 11.9% BELOW its 200-dMA & 2.8% BELOW its 50-dMA.
*I won’t call the correction over until the S&P 500 makes a new-high; however, we hope to be able to call the bottom when we see it.
 
MY TRADING POSITIONS:
SH
I added a small short position 7/11.  I’ll add more if market declines continue.  Calling a top in this market is nearly impossible so I am scaling into a position in SH, short the S&P 500 ETF.
 
TODAY’S COMMENT:
Markets were due for a down day, so today’s action is not a surprise.  There are also worries about the upcoming CPI release on Wednesday morning before the open.  Early indications are that CPI will be worse than last month’s release, although ex energy and food, CPI may improve. Expect more choppy trading Tuesday.
 
I am still watching the 50-dMA.  The Index is now 2.8% below its 50-dMA so it may still get there, perhaps after the CPI report?
 
Market leaders today were: Utilities, Real Estate, Consumer Staples and Health Care – all defensive sectors. Investors are worried.
 
Today, the daily sum of 20 Indicators declined from +7 to -3 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations declined from +71 to +59. (The trend direction is more important than the actual number for the 10-day value.) These numbers sometimes change after I post the blog based on data that comes in late. Most of these 20 indicators are short-term so they tend to bounce around a lot.
 
LONG-TERM INDICATOR: The Long Term NTSM indicator remained BUY: SENTIMENT, PRICE, & VIX are bullish; VOLUME is neutral. While this is a very strong indication, it means that the markets have been strong.  I don’t consider this a good time to buy since I expect the S&P 500 to retreat to its prior low and possibly make new lows. (Depends on recession; or no-recession.)
 
I’m a Bear, longer-term. In the short-term, I am in wait-and-see mode. This week may give some clues regarding the direction of the markets.
 
BEST ETFs - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily)

*For additional background on the ETF ranking system see NTSM Page at…
http://navigatethestockmarket.blogspot.com/p/exchange-traded-funds-etf-ranking.html

BEST DOW STOCKS - TODAY’S MOMENTUM RANKING OF THE DOW 30 STOCKS (Ranked Daily)
Here’s the revised DOW 30 and its momentum analysis. 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 declined to SELL.
 
Market Internals are a decent trend-following analysis of current market action, but should not be used alone for short term trading. They are usually right, but they are often late.  They are most useful when they diverge from the Index. 
 

My stock-allocation in the portfolio is now roughly 30% invested in stocks.
 
I trade about 15-20% of the total portfolio using the momentum-based analysis I provide here. If I can see a definitive bottom, I’ll add a lot more stocks to the portfolio using an S&P 500 ETF.
 
You may wish to have a higher or lower % invested in stocks depending on your risk tolerance. 50% is a conservative position that I consider fully invested for most retirees.
 
As a general rule, some suggest that the % of portfolio invested in the stock market should be one’s age subtracted from 100.  So, a 30-year-old person would have 70% of the portfolio in stocks, stock mutual funds and/or stock ETFs.  That’s ok, but for older investors, I usually don’t recommend keeping less than 50% invested in stocks (as a fully invested position) since most people need some growth in the portfolio to keep up with inflation.