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“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.
 
FOMC MINUTES (YahooFinance)
“Policymakers ‘reaffirmed their strong commitment’ to returning inflation to the Fed's 2% goal, with many officials stressing the need to stay the course even as labor market slows...Consensus was to “purposefully’ move to restrictive stance in the near term, though several officials saw it as ‘important to calibrate” the pace of tightening to minimize harm to the economy.” Story at...
https://finance.yahoo.com/news/key-takeaways-minutes-feds-september-180001745.html
 
PPI (CNBC)
“The producer price index, a measure of prices that U.S. businesses get for the goods and services they produce, increased 0.4% for the month, compared with the Dow Jones estimate for a 0.2% gain. On a 12-month basis, PPI rose 8.5%, which was a slight deceleration from the 8.7% in August...“Inflationary momentum has built up in the U.S. economy and will persist near-term, keeping the Fed hiking aggressively,” said Bill Adams, chief economist for Comerica Bank.” Story at...
https://www.cnbc.com/2022/10/12/producer-price-index-september-2022.html
My cmt: Markets dipped on the news, but didn’t fall into negative territory.  That’s somewhat bullish, but now investors are waiting for the CPI news to be released tomorrow at 8:30 am. 
 
LOOKING FOR A VOLATILITY SPIKE (Heritage Capital)
“...nothing has changed in my thesis that the markets are going to find a meaningful, if not major, low in Q4 with an eye towards October. Recall that incredible bottoms were seen in midterm election years of 2018, 2010, 2002, 1998, 1994, 1990, 1982 and 1974 with most being in Q4 and the majority in October. The news is dreadful. It’s a constant barrage of bad news. But remember, real bottoms are only made in the face of a very negative backdrop. You don’t see unicorns and rainbows at lows. And the 2-Year Note absolutely must roll over to the downside. It has remained stubbornly high. This is as key as anything else to watch right now.” - Paul Schatz. Commentary at...
https://investfortomorrow.com/blog/barrage-of-bad-news-looking-for-volatility-to-spike/
 
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 fell about 0.3% to 3577 (a new correction low).
-VIX bucked trend and dipped about 0.2% to 33.57.
-The yield on the 10-year Treasury slipped to 3.907%.
 
PULLBACK DATA:
-Drop from Top: 25.4% as of today. 25.4% max (on a closing basis).
-Trading Days since Top: 195-days.
The S&P 500 is 14.3% 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 again vs. the 30 Sept low suggesting selling continues to slow. As noted for other recent tests, 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 CPI numbers that are due out tomorrow at 8:30 am. A positive surprise would probably give us a huge jump in the markets.
 
Only 4 days have been up in the last 20-days and only 2 days have been up in the last 10-days. Markets don’t go down forever and these are bullish numbers – especially the 20-day. I think the spring is coiling to pop higher...we’ll see. The CPI is the key now.
 
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 +6 to -3 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations improved from +21 to +25. (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: VOLUME & VIX are bearish; PRICE is bullish; SENTIMENT is 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 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. AMGN  #2. CVX #3. UNH

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 declined 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 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.