NAHB Housing Market ... Best DOW Stocks ... Best ETFs … Stock Market Analysis ...

 
“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
NAHB HOUSING MARKET INDEX (CNBC)
“Homebuilders were less confident about their business in December, but they are starting to see potential green shoots. Builder sentiment in the single-family housing market dropped 2 points to 31 in December on the National Association of Home Builders/Wells Fargo Housing Market Index. Anything below 50 is considered negative.” Story at...
https://www.cnbc.com/2022/12/19/homebuilder-sentiment-falls-bottom-may-be-near.html
 
MARKET REPORT / ANALYSIS
-Monday the S&P 500 fell about 0.9% to 3818.
-VIX went against trend and slipped about 0.9% to 22.42,
-The yield on the 10-year Treasury rose to 3.601%.
 
PULLBACK DATA:
-Drop from Top: 20.4% as of today. 25.4% max (on a closing basis).
-Trading Days since Top: 242-days.
The S&P 500 is 5.1% BELOW its 200-dMA & 1.3% 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 in the 3600 area and I am fully invested with a higher percentage of stocks than normal.
 
MY TRADING POSITIONS:
I am doing less trading now. You may do better watching the momentum charts rather than my moves.
 
XLK – Technology ETF
 
SOLD
QLD – 2x Nas 100
 
CVX – (I sold newly acquired shares {last-in, first-out}. I already owned a small position in CVX that I kept.)
DDM – 2x Dow 30.
XLI – Industrial ETF
 
TODAY’S COMMENT:
Monday, the S&P 500 closed 1.3% below its 50-dMA to make 2 consecutive closes below a trend line; officially, that’s a trend break.
 
Today, the daily sum of 20 Indicators improved from +1 to +3 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations declined from +92 to 79. (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 HOLD: SENTIMENT is neutral; VIX & PRICE are bullish; VOLUME is negative. 
 
Bottom line: Not much change in the indicators. I sold QLD. A leveraged position is not one to hold in a downturn.  The indicators are suggesting a retreat to the October lows is much more likely.  The S&P 500 is only 5% above its October low. Based on previous tests in June and October, the October low (3577) is likely to hold (more or less) even if the Index does fall that low. That optimism may not remain if the Fed continues hiking.
 
I’m a reluctant Bear at this point, but I remain fully invested (in my retiree conservative position) since I suspect the previous low won't be violated by too much.  
 
I’m now invested with about 55% of the portfolio invested in stocks. (As a retiree, 50% invested in stocks is my “normal” portfolio.)
 
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.
*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:

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 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 55% stocks, including stock mutual funds and ETFs. I’m usually about 50% invested in stocks. I was around 75% in stocks before this latest downturn.
 
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.