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

 
“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
INDUSTRIAL PRODUCTION (Federal Reserve)
“Industrial production increased 0.4 percent in September and 2.9 percent at an annual rate in the third quarter. In September, manufacturing output rose 0.4 percent after advancing a similar amount in the previous month.” Release at...
https://www.federalreserve.gov/releases/g17/current/default.htm
 
NAHB HOUSING MARKET INDEX (NAHB)

Chart from...
https://www.nahb.org/news-and-economics/housing-economics/indices/housing-market-index
“Builder sentiment fell for the ninth consecutive month in September as elevated interest rates, persistent building material supply chain disruptions, and high home prices continue to impact housing affordability, according to the NAHB.” Story at...
https://www.builderonline.com/data-analysis/nahb-wells-fargo-housing-market-index-falls-for-ninth-consecutive-month_o
 
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 rose about 1.1% to 3720.
-VIX dipped about 3% to 30.5. (That’s still not much drop given the big move up in the S&P 500. The VIX crowd remains skeptical, although to be fair, a high VIX suggests big moves in price in EITHER direction.)
-The yield on the 10-year Treasury was still 4.013%.
 
PULLBACK DATA:
-Drop from Top: 22.4% as of today. 25.4% max (on a closing basis).
-Trading Days since Top: 199-days.
The S&P 500 is 10.4% Below its 200-dMA & 5% Below its 50-dMA.
*I won’t call the correction over until the S&P 500 makes a new-high; however, evidence suggests the bottom was / is in the 3600 area and I am fully invested with a higher percentage of stocks than normal.
 
MY TRADING POSITIONS:
XLI – Industrial ETF
QLD – 2x Nas 100
DDM – 2x Dow 30
XLK – Technology ETF
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:
I got the volume signal I was looking for – up-volume was 83% today. That’s a very bullish sign since it follows the 93% up-volume day yesterday. As noted earlier, “In approximately half the cases in the past 69 years, the 90% Upside Day, or the back-to-back 80% Upside Days, which signaled a major market reversal, occurred within five trading days or less of the market low.” - Identifying Bear Market Bottoms - Lowry Research. The bottom was 4 days ago. We also note that since my buy signal of 27 September, there have been four 90% up-volume days and two back-to-back 80%+ up-volume days. That’s strongly suggesting a durable rally.
 
Tuesday unchanged volume was high. As I’ve often said, many believe that this indicator suggests investor confusion at market turning points. My problem is that it is frequently a false signal, but I will say this; this indicator has been correct the last four times we’ve seen it. Now, I don’t know what it means.  The S&P 500 is about the same level as it was when we saw the last signal, so is this signal bullish or bearish? It is odd to see a high, unchanged volume-day when 83% of volume was up-volume.
 
Today, the daily sum of 20 Indicators dipped from +9 to +4 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations remained +56. (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 & SENTIMENT are bullish; VOLUME is neutral. 
 
Bottom line: I’m a Bull: I’m now invested with about 75% of the portfolio invested in stocks. I added a leveraged long position (QLD – 2xNas 100) and XLI (Industrial ETF) 18 Oct based on strong bullish signs. (As a retiree, 50% invested in stocks is my “normal” portfolio.) 75% stocks is uber-bullish and that’s as far as I’ll go.
 
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. XLV

*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. MRK #3. CVX

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 slipped to SELL, but just barely.
(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 75% 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.