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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.
 
CHICAGO PMI (Advisor Perspectives)
“The latest Chicago Purchasing Manager's Index, or the Chicago Business Barometer, dropped to 45.2 in September from 45.7 in September, which is in contraction territory.” Story at...
https://www.advisorperspectives.com/dshort/updates/2022/10/31/chicago-pmi-dipped-in-october
 
MARKET BULDS ON THE BOTTOM AND NO RECESSION (Heritage capital)
“Over and over and over, I have discussed the idea that the October 13th low was either a low of significance or the final bottom in the bear market...I have been firmly in the camp that the U.S. will not be in recession in 2022. Even after back to back negative GDP quarters I said the same thing. The employment market is way too strong.” - Paul Schatz. Commentary at... 
https://investfortomorrow.com/blog/market-build-on-the-bottom-still-no-recession/
 
PELOSI ATTACKER A PSYCHOTIC HOMELESS ADICT (Michael Shellenberger)
“Neighbors described DePape as a homeless addict with a politics that was, until recently, left-wing, but of secondary importance to his psychotic and paranoid behavior. “What I know about the family is that they’re very radical activists,” said one of DePape’s neighbors, a woman who only gave her first name, Trish. “They seem very left. They are all about the Black Lives Matter movement. Gay pride. But they’re very detached from reality. They have called the cops on several of the neighbors, including us, claiming that we are plotting against them. It’s really weird to see that they are willing to be so aggressive toward somebody else who is also a lefty.”...Wrapped up in their own obsession with Trump Republicans, most journalists have missed the real story. David DePape is not a microcosm of the political psychosis gripping America in general. Rather, he’s a microcosm of the drug-induced psychosis gripping the West Coast in particular.” Story at...
https://michaelshellenberger.substack.com/p/pelosi-attack-suspect-was-a-psychotic
 
MARKET REPORT / ANALYSIS
-Monday the S&P 500 dropped about 0.8% to 3872.
-VIX rose about 0.5% to 25.88. (That’s a small increase for a 0.8% drop in the S&P 500.)
-The yield on the 10-year Treasury was 4.048%.
 
PULLBACK DATA:
-Drop from Top: 19.3% as of today. 25.4% max (on a closing basis).
-Trading Days since Top: 208-days.
The S&P 500 is 5.8% Below its 200-dMA & 1% ABOVE 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.)
 
TODAY’S COMMENT:
So as noted previously, I got a Buy-signal Tuesday, 27 September.  That was confirmed 28 September with a big up-Day, but followed by very weak days 29 and 30 September.  That rattled my confidence that the buy-signal was valid.  Monday and Tuesday, 3 and 4 October, we saw high up-volume days, so I concluded the buy-signal was valid. We did see the markets drop 2% below my Buy-signal, but it has been all up since the 12 October low. 
 
Now, even some of the CNBC Fast Money crew are talking about a “bottoming process” instead of doom and gloom.
 
Markets are likely to be on edge this week due to the Fed meeting this week. The announcement will be made Wednesday. A 75 basis point (3/4%) increase is baked into the cake, but investors are hoping for some dovish language in the announcement.
 
Today, the daily sum of 20 Indicators declined from +15 to +13 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations improved from +107 to +111. (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 BUY: SENTIMENT & VIX are neutral; PRICE & VOLUME are bullish. 
 
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. ITA #2. IBB (#2 Tied) 3. XLF

*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.CAT  #2.CVX  #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

MONDAY MARKET INTERNALS (NYSE DATA)

My basket of Market Internals slipped to 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 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.