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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.
 
FACTORY ORDERS (Morningstar)
“Manufacturing orders in the U.S. were virtually unchanged in August, following a decline in the previous month, reflecting cooler demand for goods as the economy slows.”  Story at...
https://www.morningstar.com/news/dow-jones/202210045331/us-factory-orders-remained-flat-in-august
 
JOLTS JOB OPENINGS (CNBC)
“The number of job openings plunged by more than a million in August, providing a potential early sign that the massive U.S. labor gap is beginning to close...One primary area of interest for the central bank has been the ultra-tight labor market, which had been showing about two job openings for every available worker. That ratio contracted to 1.67 to 1 in August.” Story at...
https://www.cnbc.com/2022/10/04/jolts-august-2022.html
 
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 rose about 3.1% to 3791.
-VIX declined about 5% to 29.07.
-The yield on the 10-year Treasury was down slightly to 3.637%.
 
PULLBACK DATA:
-Drop from Top: 21% as of today. 25.2% max (on a closing basis).
-Trading Days since Top: 189-days.
The S&P 500 is 9.8% Below its 200-dMA & 5.3% Below its 50-dMA.
Support is around 3250, the lows of September 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.) I added significantly more SPY today.
UWM - Wilshire 2000.
 
TODAY’S COMMENT:
On Tuesday of last week, 27 September, I wrote “All in all, the numbers are suggesting a bottom, or at least a bounce.”
For more detail, see Tuesday’s comment here...
http://navigatethestockmarket.blogspot.com/2022/09/best-dow-stocks-best-etfs-stock-market_27.html
 
I further suggested that a strong day Wednesday would indicate a bottom. We got the strong day Wednesday, but Thursday and Friday of last week shook our confidence as the markets gave back big gains on Wednesday.
 
Boy, what a change after the weekend. Now we have very strong days on Monday and Tuesday of this week. Furthermore, market action is now signaling a reversal:
“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.
 
We’ve now had consecutive 90% high up-volume days after the low. Tuesday closed near the high thus meeting the test for a bullish sign.  Overall, there have been 3, 90% high volume, up-days since my buy signal on 27 Sept all within 7 sessions of a 90% down volume day (although not all of them met all the test for a bullish signal). Still, I think the indicators signal a reversal and tend to confirm my buy-signal from last week.
 
We’ve also seen a number of bull signs showing up. 
 
These don’t guarantee a bottom.  Markets sometimes retest the prior low again, and in the process drop below the prior low.  I won’t get too worried unless the S&P 500 dips more than 3% below the prior low. We would expect some profit taking after the recent big move.
 
Today was another statistically significant up-day. That just means that the price-volume move exceeded my statistical parameters. Statistics show that a statistically-significant, up-day is followed by a down-day about 60% of the time. 
 
Today, the daily sum of 20 Indicators improved from -1 to +4 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations improved from -77 to -64. (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; SENTIMENT is bullish; VOLUME & PRICE are neutral. 
 
Remember for the longer-term, one indicator trumps them all – “Don’t fight the FED.”...BUT...The market is telling us that the Fed is not currently that big of a problem.
 
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 creep into the mix.
 
BEST ETFs - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily)
None of the ETFs I track are above their 120-dMA so the chart is no good. ETF ranking follows:
#1.IBB  #2.XLE  #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)
Here’s the revised DOW 30 and its momentum analysis. The top ranked stock receives 100%. The rest are then ranked based on their momentum relative to the leading stock.
My momentum chart for the Dow has blown up. DOW 30 momentum ranking follows:
#1 UNH  #2.WMT  #3.MRK
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 improved, but 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 bear signs increasing.
 
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.