Best DOW Stocks ... Best ETFs … Stock Market Analysis ... Leading Economic Index ... Existing Home Sales ... Jobless Claims ... Philadelphia FED Index

 
“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
LEADING ECONOMIC INDEX (Conference Board vis prnewswire)
“The Conference Board Leading Economic Index® (LEI) for the U.S. decreased by 0.4 percent in September 2022 to 115.9 (2016=100), after remaining unchanged in August. The LEI is down 2.8 percent over the six-month period between March and September 2022, a reversal from its 1.4 percent growth over the previous six months. ‘The US LEI fell again in September and its persistent downward trajectory in recent months suggests a recession is increasingly likely before yearend,’ said Ataman Ozyildirim, Senior Director, Economics, at The Conference Board.” Press release at...
https://www.prnewswire.com/news-releases/the-conference-board-leading-economic-index-lei-for-the-us-declined-in-september-301654967.html
 
EXISTING HOME SALES (CNBC)
“Existing homes are selling at the slowest pace since September 2012, with the exception of a brief drop at the start of the Covid 19 pandemic. Sales of previously owned homes fell 1.5% in September from August...Sales were lower by 23.8% year-over-year. Sharply higher mortgage rates are causing an abrupt slowdown in the housing market.” Story at...
https://www.cnbc.com/2022/10/20/existing-home-sales-fall-to-a-10-year-low-in-september.html
 
JOBLESS CLAIMS (USNews)
“The number of Americans filing first-time claims for unemployment benefits fell by 12,000 last week, the Labor Department reported on Thursday. Claims totaled 214,000...” Story at...
https://www.usnews.com/news/economy/articles/2022-10-20/jobless-claims-fell-last-week
 
PHILADELPHIA FED INDEX (ShareCast)
“Manufacturing production in the Philadelphia region deteriorated more than expected in October, according to a survey released on Thursday. The Philadelphia Fed index for current manufacturing activity edged up one point to -8.7, coming in below expectations for a reading of -5.0.”  Story at... 
https://www.sharecast.com/news/international-economic/philly-fed-index-ticks-up-but-remains-negative--11069240.html
 
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 dipped about 0.8% to 3666.
-VIX bucked the trend and dipped about 2.5% to 29.98.
-The yield on the 10-year Treasury rose to 4.232%.
 
PULLBACK DATA:
-Drop from Top: 23.6% as of today. 25.4% max (on a closing basis).
-Trading Days since Top: 199-days.
The S&P 500 is 11.4% Below its 200-dMA & 5.9% 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 (This is really a long-term position.)
IWM - Russell 2000. (This is really a long-term position.)
 
TODAY’S COMMENT:
As I noted yesterday, the 10-dMA of Breadth is not recovering so it appears that markets may retest prior lows, once again.
 
Earlier today indicators were very bullish; that changed around mid-day as the markets fell in the afternoon. Utilities (XLU-ETF) are being sold.  Are the pros playing us? Are they pushing the markets down; selling safe haven stocks (like utilities); and planning to buy the high flyers (tech, etc.) after the market falls a few more percent? I am not normally a conspiracy theorist; it’s just that it is very unusual to see utilities sold (down more than 2.5%), the VIX fall, while markets drop nearly 1 percent.
 
Here is the “S&P 500 Minus Utilities” spread presented in a graph. The red curve is the spread; a rising red curve is bullish, especially when combined with a high value.
 

Today, the daily sum of 20 Indicators dipped from +3 to zero (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations dropped from +52 to +46. (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; VOLUME & SENTIMENT are neutral. 
 
Bottom line: I’m a Bull: I’m now invested with about 75% of the portfolio invested in stocks. (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. 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. CVX  #2. MRK #3. AMGN

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
 
THURSDAY MARKET INTERNALS (NYSE DATA)

My basket of Market Internals remained 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 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 and I may be forced to sell leveraged long positions if the markets keep falling.
 
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.