Best DOW Stocks ... Best ETFs … Stock Market Analysis ... NAHB Housing Market Index

 
“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.

 They don’t have enough buses!
 
NAHB HOUSING MARKET INDEX (CNBC)
“Homebuilder sentiment in September fell 3 points to 46 in the National Association of Home Builders/Wells Fargo Housing Market Index. Anything below 50 is considered negative...“Buyer traffic is weak in many markets as more consumers remain on the sidelines due to high mortgage rates and home prices that are putting a new home purchase out of financial reach for many households,” said NAHB Chairman Jerry Konter, a homebuilder and developer from Savannah, Georgia.” Story at...
https://www.cnbc.com/2022/09/19/more-homebuilders-lower-prices-sentiment-falls-for-ninth-straight-month.html
 
BOTTOM NOT IN (Heritage Capital)
“I do not share the becoming popular opinion that S&P 3000 (currently 3950) is coming soon.
For a while I have been warning of the risk into October and published a few studies explaining this. Nothing has changed. The top scenario has the stock market bottoming next month and rallying sharply into 2023. The bottom could be above or slightly below the June lows.” Commentary at...
https://investfortomorrow.com/blog/stocks-collapse-bottom-not-in-fox-business-calls/
 
MARKET REPORT / ANALYSIS
-Monday the S&P 500 rose about 0.7% to a whisker below 3900.
-VIX slipped about 2% to 25.77.
-The yield on the 10-year Treasury rose to 3.492%.  
 
PULLBACK DATA:
-Drop from Top: 18.7% as of today. 23.6% max.
-Trading Days since Top: 178-days.
The S&P 500 is 8.4% Below its 200-dMA & 3.5% Below its 50-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:
As I’ve remarked on a number of occasions, it remains troubling for the Bulls to see the Utilities (XLU-ETF) outperforming the S&P 500. Today the XLU was up 1.3% while the S&P 500 was up 0.7%. Normally, XLU would fall when the S&P 500 is rising. It just shows that Wall Street remains defensive. In the chart below, XLU is outperforming when the red graph is below zero.

Today, the daily sum of 20 Indicators declined from -3 to -4 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations declined from +19 to +11. (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 HOLD: the Panic Indicator is bearish; VOLUME, 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.”
 
Carter Worth was on the Options Action show on CNBC and charted a test of the prior low with a possible final low in the vicinity of 3300. For now, he said, “This just isn’t over.”
 
I have been saying for a while that I think we remain in a selling stampede. Maybe-maybe not. 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, this downturn has lasted 23-days, but we might need to start a new count since we did recently have 4 up-days in a row.
 
If the stampede is ending, we may see a “Turning Tuesday” tomorrow when investors decide “enough already.” There was a long buying stampede so I suspect the fall will continue.
 
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

MONDAY 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.