Best DOW Stocks ... Best ETFs … Stock Market Analysis ... Durable Orders ... Pending Home Sales ... Crude Inventories

 
“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
DURABLE ORDERS (forexlive)
"US July durable goods orders 0.0% vs +0.6% expected."

Chart from...
https://www.forexlive.com/news/us-july-durable-goods-orders-00-vs-06-expected-20220824/
 
PENDING HOME SALES (NAR)
“Pending home sales decreased in June, following a slight increase in May, according to the National Association of REALTORS®. All four major regions posted month-over-month and year-over-year pullbacks, the largest of which occurred in the West...Year-over-year, transactions shrank 20.0%.”  Press release at... 
https://www.nar.realtor/newsroom/pending-home-sales-fell-8-6-in-june
 
EIA CRUDE INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 3.3 million barrels from the previous week. At 421.7 million barrels, U.S. crude oil inventories are about 6% below the five year average for this time of year.” Report at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf
This suggests demand remains strong.
 
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 rose about 0.3% to 4141.
-VIX fell about 5% to 22.82.
-The yield on the 10-year Treasury rose to 3.112%.
 
PULLBACK DATA:
-Drop from Top: 13.7% as of today. 23.6% max.
-Trading Days since Top: 161-days.
The S&P 500 is 4% Below its 200-dMA & closed 4% Above its 50-dMA.
-Support points for the rally, are 4082 & 3982, the 100-dMA & 50-dMA, respectively.
 
The S&P 500 closed at its 57% retracement level 16 August. 50% is about what we normally see in bounces during corrections, but that is only a rough guide. 62% is the next higher Fibonacci retracement level, but the S&P 500 failed to cross its 200-dMA so it didn’t get there.
 
*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.
SDS, 2x short S&P 500 ETF. (I added more Monday.)
 
TODAY’S COMMENT:
Not much new information today. After 4 down-days in a row we expected that Wednesday would be positive; it was.
 
I was surprised to see that only 1 Dow stock is above its 10-dMA. That’s not a bullish sign. A little more than a week ago 29 Dow stocks were above their 10-dMAs.
 
I report on 20 indicators daily. Here’s a plot of the 10-day SUM of 20 indicators (RED) and the S&P 500 (BLACK). The daily sum is the purple line. Peaks in the 10-day SUM have marked recent rally tops. We also note the weak peak in January that coincided with the all-time-high in the S&P 500.

Today, the daily sum of 20 Indicators declined from +1 to 11 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations slipped from +102 to +85. (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 improved to BUY: VIX & PRICE are bullish; SENTIMENT & VOLUME are neutral. I still expect the S&P 500 to test its prior low of 3667. Remember for the longer-term, one indicator trumps them all – “Don’t fight the FED.”
 
I’m a Bear at this point, still expecting a retest of the prior lows.
 
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
 
WEDNESDAY MARKET INTERNALS (NYSE DATA)

My basket of Market Internals dropped back 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 most useful when they diverge from the Index.) 
 
 

My stock-allocation in the portfolio is now roughly 30% 40% invested in stocks, although technically, SSO isn’t a stock, but an options-based ETF.
 
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.