Best DOW Stocks ... Best ETFs … Stock Market Analysis ... PPI
“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
Political commentary at
https://michaelpramirez.com/index.html
JOBLESS CLAIMS (ABC News)
“The number of Americans applying for unemployment
benefits last week hit its highest level in nearly 8 months, but the total
number of those collecting benefits fell. Applications for jobless aid for the
week ending July 9 rose by 9,000 to 244,000...” Story at...
https://abcnews.go.com/Business/wireStory/us-weekly-jobless-claims-highest-point-months-86810016
PPI (CNBC)
“Inflation hit hard at the wholesale level in June, as
producer prices surged a near-record amount from a year ago due to a big jump
in energy costs, the Bureau of Labor Statistics reported Thursday. The producer
price index, a measure of the prices received for final demand products,
increased 11.3% from a year ago...”
https://www.cnbc.com/2022/07/14/producer-price-index-june-2022-gain-11point3percent-on-surge-in-energy-costs.html
The Core PPI (excluding food, trade services and energy)
was 6.4%, down slightly from May.
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 slipped about 0.3% to 3790.
-VIX again bucked the trend and declined about 2% to 26.40.
-The yield on the 10-year Treasury rose to 2.961%.
PULLBACK DATA:
-Drop from Top: 21% as of today. 23.6% max.
-Trading Days since Top: 132-days.
The S&P 500 is 13.2% BELOW its 200-dMA & 3.9%
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, short the S&P 500 ETF.
I added a small, short position 7/11. I increased my short position on 7/13.
TODAY’S COMMENT:
Not much change from yesterday. It still looks like the
S&P 500 will test its prior low of 3667. Currently, the Index is only about
2.6% above that low.
There is still a chance that this correction could be
nearing an end. Today, the best
performing sectors included Consumer Staples and Utilities. Both were flat while other sectors were down
except for one – Technology rose nearly 1% today. We expect the defensive
sectors to be up, but Technology? Perhaps selling is waning.
Today, there was high unchanged-volume. As I’ve often
said, many believe that this indicator suggests investor confusion at market
turning points. Recent history shows this indicator has indicated a reversal of
some kind, either now, or near future. My problem is that it is frequently a
false signal. If the indicator is sending a decent signal, it probably is
suggesting a reversal up; both the short-term trend and the longer-term trends
have been down; but I don’t have much confidence in the call.
Today, the daily sum of 20 Indicators improved from -5 to
-4 (a positive number is bullish; negatives are bearish); the 10-day smoothed
sum that smooths the daily fluctuations declined from +31 to +7. (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 HOLD: SENTIMENT & PRICE are bullish; VOLUME
& VIX are neutral.
I’m a Bear, longer-term. In the short-term, I am in
wait-and-see mode – we need to test the prior low to get a clue regarding this correction
ending. While a successful test might not signal a final bottom, it could
initiate some significant buying.
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
THURSDAY MARKET INTERNALS
(NYSE DATA)
My basket of Market Internals are still signaling 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 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.
