“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
“US private sector firms indicated the first contraction in business activity since June 2020 in July, according to latest ‘flash’ PMI™ data from S&P Global. The downturn in output signalled a further loss of momentum across the economy of a degree not seen outside of COVID-19 lockdowns since 2009. The downturn was led by a steep drop in service sector activity, though production at manufacturers also fell marginally, down for the first time in over two years.” Report at...
https://www.pmi.spglobal.com/Public/Home/PressRelease/52db97a5557c433d855b74a46c5ecff6
“We are finally seeing a surge in buying interest as the many of the major indices attempt to exceed their late June highs. If successful that would be higher highs and higher lows. If I am wrong and the bear market is about to resume we should see immediate failure by the bulls... After such a large up day it would be healthy to see stocks pause and digest a little. The S&P 500 should see more upside to at least 4000, another 2% from here. The NASDAQ 100 has already achieved that level on a comparable basis.” – Paul Schatz, President Heritage Capital.
https://investfortomorrow.com/blog/finally-a-surge-in-buying-interest/
“The second-quarter earnings season for the S&P 500 continues to be weaker than normal. Both the number of S&P 500 companies reporting positive earnings surprises and the magnitude of these positive surprises are below their five-year averages. However, the index has a higher earnings growth rate for the second quarter today relative to the end of the quarter mainly due to continued upward revisions to EPS estimates for companies in the Energy sector... Overall, 21% of the companies in the S&P 500 have reported actual results for Q2 2022 to date. Of these companies, 68% have reported actual EPS above estimates, which is below the five-year average of 77%. In aggregate, companies are reporting earnings that are 3.6% above estimates, which is also below the five-year average of 8.8%.” Analysis at...
https://insight.factset.com/sp-500-earnings-season-update-july-22-2022
-Friday the S&P 500 dropped about 0.9% to 3962.
-VIX dropped about 0.3% to 23.03. (VIX bucked trend today)
-The yield on the 10-year Treasury dipped to 2.759%.
-Drop from Top: 17.4% as of today. 23.6% max.
-Trading Days since Top: 138-days.
The S&P 500 is 9% BELOW its 200-dMA & 1.1% ABOVE 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.
SH, short the S&P 500 ETF.
On Fridays, I summarize a number of indicators to get a weekly feel for trend. Last week, the end-of-week summary was in a neutral position; now indicators have reversed to the Bull side (5-bear and 17-bull). These indicators tend to be both long-term and short-term, so they are different than the 20 that I report on daily. Details follow:
-The 10-dMA % of issues advancing on the NYSE (Breadth) is above 50%.
-The 50-dMA percentage of issues advancing on the NYSE (Breadth) is below 50.
-Sentiment.
-MACD of the percentage of issues advancing on the NYSE (breadth) made a bullish crossover 24 June.
-MACD of S&P 500 price made a bullish crossover 24 June.
-Short-term new-high/new-low data.
-Long-term new-high/new-low data.
-My Money Trend indicator.
-VIX.
-The size of up-moves has been larger than the size of down-moves over the last month.
-The short-term, 5-day & 10-day, Fosback Hi-Low Logic Indexes are Bullish.
-The longer-term, 50-dEMA, Fosback Hi-Low Logic Index is Bullish.
-McClellan Oscillator is positive.
-The graph of the 100-day Count (the 100-day sum of up-days) is headed up.
-The 5-10-20 Timer System is BUY; the 5-dEMA and 10-dEMA are both ABOVE the 20-dEMA.
-The Smart Money (late-day action) is bullish.
- S&P 500 are outperforming the Utilities (XLU).
-The 50-dMA percentage of issues advancing on the NYSE (Breadth) popped above 50% ending its streak of consecutive days. (3 days in a row is my “correction-now” signal)
-There have been 4 Distribution Days in the last 5 weeks, but the bear sign is 6. On the whole though, there have been a host of Distribution Days and only 1 Follow-thru day in the last 2 months.
-There have been 2 Statistically-Significant day (big moves in price-volume) in the last 15-days.
-Issues advancing on the NYSE (Breadth) compared to the S&P 500.
-Buying Pressure minus Selling Pressure has been rising, but ticked down today – call it neutral for now.
-The S&P 500 is 9% below its 200-dMA. (Bull indicator is 12% below the 200-day, although this is based on “normal” pullbacks.)
-RSI
-Overbought/Oversold Index (Advance/Decline Ratio).
-There was an Inverse Zweig Breadth Collapse (negative Breadth Thrust) 21 June. That’s a rare, very-bearish sign, but it was 4-weeks ago.
-The 52-week, New-high/new-low ratio improved by 0.7 standard deviations on 15 July – too small to send a signal.
-There was a Hindenburg Omen signal 8 April – it was canceled when the McClellan Oscillator turned bullish.
-The Calm-before-the-Storm/Panic Indicator.
-1 July was a Bullish Outside Reversal Day – expired.
-2.8% of all issues traded on the NYSE made new, 52-week highs when the S&P 500 made a new all-time-high, 3 January. (There is no bullish signal for this indicator.) This indicated that the advance was too narrow and a correction was likely to be >10%. – It proved correct, but is now Expired
-There have been 9 up-days over the last 20 sessions –neutral.
-There have been 4 up-days over the last 10 sessions – neutral.
-Cyclical Industrials (XLI-ETF) are under-performing the S&P 500, but not by much.
-There were three 90% Down-volume days 9-16June. There was a high up-volume day 19 July, but it was too long after the down-days to signal a reversal.
-The smoothed advancing volume on the NYSE is falling.
-Bollinger Bands were bearish Thursday.
-The 100-dMA percentage of issues advancing on the NYSE (Breadth) is below 50%
-Slope of the 40-dMA of New-highs is down. This is one of my favorite trend indicators.
-Only 43% of the 15-ETFs that I track have been up over the last 10-days.
BEST ETFs - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily)
http://navigatethestockmarket.blogspot.com/p/exchange-traded-funds-etf-ranking.html
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.
https://navigatethestockmarket.blogspot.com/p/a-system-for-trading-dow-30-stocks-my_8.html
