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(3) Buy/Sell signals for major market turns.
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Monday, November 21, 2022
Best DOW Stocks ... Best ETFs … Stock Market Analysis ... Falling Dollar
“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire. “The charts, as interpreted by the legendary Larry
Williams, suggest that the Santa Claus rally is coming to town next month.” - Jim
Cramer, Host of CNBC’s Mad Money. THE DOLLAR PUMMETS – GOOD (Heritage Capital) “While the dollar could or should bounce to at least 109...it
does look like the major rally [in the dollar] has ended which was one of the
three absolutes for the bear market in stocks to end as well.” Story at... https://investfortomorrow.com/blog/europe-dow-showing-emerging-index-leadership-as-dollar-plummets/ MARKET REPORT / ANALYSIS -Monday the S&P 500 dipped 0.4% to 3950. -VIX slipped about another 3% to 22.36. -The yield on the 10-year Treasury rose to 3.833%. PULLBACK DATA: -Drop from Top: 17.7% as of today. 25.4% max (on a
closing basis). -Trading Days since Top: 223-days. The S&P 500 is 2.8% Below its 200-dMA (had a typo
here last Friday)& 4.3% 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 in the 3600 area
and I am fully invested with a higher percentage of stocks than normal. MY TRADING POSITIONS: XLI – Industrial ETF (XLI still looks good to me. Nearly
10% of XLI is in Boeing and Caterpillar and they are both strong performers in
the DOW momentum analysis.) QLD – 2x Nas 100 DDM – 2x Dow 30. I may sell DDM and replace it with SSO
(2x S&P 500), but for now, the DOW 30 is still doing better than the
S&P 500. XLK – Technology ETF CVX – (I may hold this as a long-term position. I already
owned a small position in CVX.) TODAY’S COMMENT: My VIX indicator remained Bullish.The VIX indicator is a good one so that’s a
good sign. The Friday rundown of indicators was very bullish (5-bear
and 19-bull) and is confirming the bottom call from late September and
mid-October. I didn’t see any difference today that would change my mind.
Short-term indicators even improved. Today, the daily sum of 20 Indicators improved from +14
to +16 (a positive number is bullish; negatives are bearish); the 10-day
smoothed sum that smooths the daily fluctuations improved from +113 to +120.
(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 is neutral; VIX, VOLUME & PRICE
are bullish.(The important Buy signal
from this indicator ensemble was 21 October (7 days after the low); my first
buy indication was on 21 September (2% above the low) based on analysis of
retests of the June low.) Bottom line: I remain a Bull. I think the bottom was 3577
on 12 October. There is always the possibility that the markets could retest
those lows, but it seems less likely that a retest will occur in 2022. 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.
My basket of Market Internals 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 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.
