Best DOW Stocks ... Best ETFs … Stock Market Analysis ... CPI ... NFIB Small Business Optimism

 
“We are experiencing a near total failure of leadership in our country. Politicians on both sides are fueling rage for personal and political advantage. It is a dangerous and craven form of demagoguery. James Freeman Clarke once said that “a politician thinks of the next election; a statesman thinks of the next generation.” We have far too many politicians today and far too few statesmen at an increasingly perilous time for our country.” – Jonathan Turley, Shapiro Chair for Public Interest Law at the George Washington University Law School. From...
https://jonathanturley.org/2022/09/08/a-dangerous-escalation-fifty-six-percent-of-voters-president-biden-sought-to-incite-conflict/#more-193577
 
CPI / CORE CPI (CNBC)
“Inflation rose more than expected in August as rising shelter and food costs offset a drop in gas prices, the Bureau of Labor Statistics reported Tuesday. The consumer price index, which tracks a broad swath of goods and services, increased 0.1% for the month and 8.3% over the past year. Excluding volatile food and energy costs, CPI rose 0.6% from July and 6.3% from the same month in 2021.” Story at...
https://www.cnbc.com/2022/09/13/inflation-rose-0point1percent-in-august-even-with-sharp-drop-in-gas-prices.html
 
NFIB SMALL BUSINESS OPTIMISM (NFIB)
“The NFIB Small Business Optimism Index rose 1.9 points in August to 91.8, marking the eighth consecutive month below the 48-year average of 98 but reversing some of the declines in the first half of the year. Twenty-nine percent of owners reported that inflation was their single most important problem in operating their business, a decrease of eight points from July’s highest reading since the fourth quarter of 1979.” Report at...
https://www.nfib.com/surveys/small-business-economic-trends/
 
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 dropped about 4.3% to 3933.
-VIX rose about 14% to 27.27.
-The yield on the 10-year Treasury rose to 3.415%.  
 
PULLBACK DATA:
-Drop from Top: 18% as of today. 23.6% max.
-Trading Days since Top: 174-days.
The S&P 500 is 7.9% Below its 200-dMA & 2.6% Above its 50-dMA & 100-dMA.
Support looks like the prior low, 3667.
 
*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 have built these positions to significantly large values, although I am still not net short.
 
TODAY’S COMMENT:
If the 4%+ drop on the S&P 500 wasn’t enough, there were more bear signs today:
-Only 5% of today’s volume was up.  Today met all the tests for a 90% down-volume day and that’s a bearish signal. The last day to meet the tests for a 90% volume day was 2-weeks ago and it was also a down-volume day. Volume is suggesting more downside ahead.
-After 1 day of positive momentum (yesterday) momentum flipped back to bearish today.
-The best performing sector today was Utilities.  They were down 2.7% - and they are defensive! Not a good sign.
-Today was another Distribution Day. That’s 7 in three weeks a bearish signal.
“A distribution day is when a market representative index (for example, the Nifty50) loses more than 0.2% in a trading session, with volume higher than that of the previous session. When a distribution day occurs, it hints that big institutional investors are exiting or reducing their positions in the market.” – MarketSmith India.
 
Looks like the Smart Money has been selling to the Dumb Money.
 
Not all signs were bearish today. Today was a statistically significant down-day. That just means that the price-volume move exceeded my statistical parameters. Statistics show that a statistically-significant, down-day is followed by an up-day about 60% of the time.
 
As I have been saying for a while: I think we remain in a selling stampede. We noted earlier that selling stampedes usually last 17 – 25 sessions, with only 1.5-to three-day pauses/throwback rallies, before they exhaust themselves on the downside. As of today, (if I am correct) this stampede down has lasted 18-days, but this time, it could go longer. We might even need to start a new count since we did have 4 up-days in a row, as of yesterday.
 
Today, the daily sum of 20 Indicators declined from +8 to zero (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations improved from +17 to +22. (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 slipped to SELL: VOLUME is bearish; The Panic Indicator warned today; SENTIMENT, PRICE & VIX are neutral. I 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.”
 
While the indicator is sell, the important sell signal was back in January.  
 
I’m a Bear; a retest of the prior lows (or close to the lows) seems likely.
 
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
 
TUESDAY MARKET INTERNALS (NYSE DATA)

My basket of Market Internals remained NEUTRAL.
 
(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% 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.