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

 
“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
“For decades we disagreed with [Supreme] Court rulings when progressives held sway, but we never called the Court illegitimate. But now that the left has lost the Court as a backup legislature for its policy goals, the institution is supposedly broken. Tell us again who is the threat to democratic institutions?” – WSJ Editorial Board.
 
NFIB SMALL BUSINESS OPTIMISM (NFIB)
“NFIB’s Small Business Optimism Index rose 0.3 points in September to 92.1, making the ninth consecutive month below the 48-year average of 98. Thirty percent of owners reported that inflation was their single most important problem in operating their business...Of those owners trying to hire, 89% reported few or no qualified applicants for the positions they were trying to fill.” Press release at...
https://www.nfib.com/content/press-release/economy/inflation-remains-top-business-problem-for-small-business-owners/
 
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 fell about 0.7% to 3589 (near the Sept low).
-VIX rose about 4% to 33.63.
-The yield on the 10-year Treasury was 3.935%.
 
PULLBACK DATA:
-Drop from Top: 25.2% as of today. 25.2% max (on a closing basis).
-Trading Days since Top: 194-days.
The S&P 500 is 14.1% Below its 200-dMA & 9.5% Below its 50-dMA.
Support is around 3585, the low of 5 October 2020.
 
*I won’t call the correction over until the S&P 500 makes a new-high; however, we may have seen the bottom, or at least near the bottom.
 
MY TRADING POSITIONS:
CVX – (I may hold this as a long-term position. I already owned a small position in CVX.)
SPY – S&P 500 (I may hold this as a long-term position.)
IWM - Russell 2000. (I may hold this as a long-term position.)
 
TODAY’S COMMENT:
Volume was down today vs. the 30 Sept low so, again, selling seems to be slowing. Internals weren’t as good as we might have liked, but they were still much improved relative to the June lows. This continues to support the position that the best move now is to “buy-the-dip.”
 
The big issue now is the PPI and CPI numbers that are due out tomorrow at 8:30 am. Is it possible that volumes are down due to investor indecision over the coming CPI data? It’s possible, but that wouldn’t account for the improved market internals, especially when compared to the June lows, so I still think markets are signaling the bottom is near.
 
I’ll be looking at buying leveraged long positions, QLD or UWM, but only if there are strong bullish signs.
 
Today, the daily sum of 20 Indicators declined from +8 to +6 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations improved from +7 to +21. (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 remained to HOLD: VIX is bearish; PRICE is bullish; SENTIMENT & VOLUME are neutral. 
 
Bottom line: I’m a Bull; I’m now invested with about 65% invested in stocks. I’ll cut back to 50% if I see bearish indicators sharply warning. I’ll add leveraged long positions (QLD, UWM) if we see a pullback to the prior lows and strong bullish signs. (As a retiree, 50% invested in stocks is my “normal” portfolio.)
 
BEST ETFs - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily)
ETF ranking follows:
The top ranked ETF receives 100%. The rest are then ranked based on their momentum relative to the leading ETF.
#1. XLE  #2. IBB  #3. ITA

*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)
DOW 30 momentum ranking follows:
#1. UNH  #2. CVX #3. WMT

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 HOLD.
(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 current invested position is about 65% stocks, including stock mutual funds and ETFs. I’m usually about 50% invested in stocks. I’ll cut back on stocks if we see serious bear signs.
 
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.