Momentum DOW Stocks ... Momentum ETFs … Stock Market Analysis ... Jobless Claims ... PPI ... EIA Crude Inventories
“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
JOBLESS CLAIMS (FoxBusiness)
“The number of Americans filing for unemployment
benefits ticked higher last week, hitting the highest
level in nine months – the latest sign that the historically tight labor market
is starting to cool off...applications for the week ended Aug. 6 rose to
262,000 from the downwardly revised 248,000 recorded a week earlier. That is
above the 2019 pre-pandemic average of 218,000 claims and marks the highest
level since mid-November.” Story at...
https://www.foxbusiness.com/economy/jobless-claims-rise-highest-level-2022
PPI (CNBC)
“The producer price index, which gauges the prices
received for final demand products, fell 0.5% from June, the first
month-over-month decrease since April 2020...” Story at...
https://www.cnbc.com/2022/08/11/producer-price-index-july-2022-.html
EIA CRUDE INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those
in the Strategic Petroleum Reserve) increased by 5.5 million barrels from the
previous week. At 432.0 million barrels, U.S. crude oil inventories are about
5% below the five year average for this time of year.” Report at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 slipped about 0.1% to 4207.
-VIX rose about 2% 20.20.
-The yield on the 10-year Treasury rose to 2.887%.
PULLBACK DATA:
-Drop from Top: 12.3% as of today. 23.6% max.
-Trading Days since Top: 152-days.
The S&P 500 is 2.8% Below its 200-dMA & closed 6.5%
Above its 50-dMA. It also closed about slightly above its 100-dMA.
-Resistance points for the rally, are: (1) 4240, the 50%
retracement point (top to bottom); (2) 4342 & 4350, the 200-dMA & upper
longer-term trend line, respectively; (3) or 4370, the 62% Fibonacci
retracement point for those who believe in that sort of thing.
The S&P 500 traded above its 50% retracement level (a
resistance point), but it did not hold there. The high for the day was 4258.
*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. Can’t seem to trim my short position, but
instead, I am trading against it with SSO..
SSO, 2xLong S&P 500 ETF.
TODAY’S COMMENT:
“Confirmation bias is the tendency to search for,
interpret, favor, and recall information in a way that confirms or supports
one's prior beliefs or
values.” – Wikipedia.
I try to guard against confirmation bias, but really, in
some cases it is nearly impossible to avoid. In some respects, I am in that
position now. I am concerned about a few
bear indicators, but most of my Indicators are saying buy, yet I am, for the
most part, not buying. That’s because these large corrections always have almost
always tested their prior lows, or at least headed down to within a couple of
percent of the prior low. (The exception would be the short-lived coronavirus correction.)
I expect a retest now. In addition, we’ve heard many companies are cutting some
payroll in advance of what they see is a coming recession (WMT, APPL, MSFT). Even
a minor recession will cut the earnings and the “E” will drop in the PE
equation, resulting in lower prices.
That doesn’t mean that it is impossible for the markets
to make it to their 200-dMA. They could possibly make it back to the prior
highs. It’s just less probable.
A friend tracks the “Fast MACD” as a trading device. He said yesterday that the indicator was
close to calling a sell. Perhaps it did
on today’s low. I’ll find out later.
Today, the daily sum of 20 Indicators remained +16 (a
positive number is bullish; negatives are bearish); the 10-day smoothed sum
that smooths the daily fluctuations improved from +101 to +107. (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. With a more bullish 10-dMA, the call is muddied regarding
whether the Index made a top on 9 August.
LONG-TERM INDICATOR: The Long
Term NTSM indicator remained BUY: VIX, PRICE & VOLUME are bullish;
SENTIMENT is 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 longer-term; short-term, the bulls are back
control of the markets. I bought the dip today as a trade with SSO-ETF.
The markets may be one piece of bad news from a market
rout. I don’t know what that news may be, but it wouldn’t take much to kill the
rally. CPI is out tomorrow.
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 remained BUY.
(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 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.
