Markit PMI ... Home Sales ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

 “Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
“...we recently discussed the release of the results of interviews with over 75 media leaders by former executive editor for The Washington Post Leonard Downie Jr. and former CBS News President Andrew Heyward. They concluded that objectivity is now considered reactionary and even harmful. Emilio Garcia-Ruiz, editor-in-chief at the San Francisco Chronicle said it plainly: “Objectivity has got to go.” – Jonathan Turley. Turley holds the Shapiro Chair for Public Interest Law at The George Washington University Law School, where he teaches torts, criminal procedure, and constitutional law. Commentary at...
https://jonathanturley.org/2023/02/18/gallup-fifty-percent-of-american-believe-media-lies-to-promote-agenda/#more-200788
 
“DeSantis is a RINO who is trying to hide his past. I don’t read the New York Post anymore. It has become Fake News, just like Fox & WSJ!” – Former President Donald Trump.
My cmt: The right-wing news media is now “fake news”?
 
IHS MARKIT COMPOSITE PMI (S&P Global)
“February data signalled a stabilisation in the US private sector economy, according to latest ‘flash’ PMI™ data from S&P Global. Business activity rose fractionally when compared with January. The upturn in the headline figure was driven by the services sector, as manufacturers continued to indicate a fall in production. The headline Flash US PMI Composite Output Index registered 50.2 in February, up sharply from 46.8 in January. The latest reading was the highest for eight months and signalled broadly unchanged output on the month across the private sector. Service sector firms registered a fractional uptick in business activity while manufacturers reported a slower decrease in output.” Press release at...
https://www.pmi.spglobal.com/Public/Home/PressRelease/1a48b2fdf6114741aade2fd71f25f4a6
 
EXISTING HOME SALES (YahooNews)
“U.S. existing home sales dropped to the lowest level in more than 12 years in January, but the pace of decline slowed, raising cautious optimism that the housing market slump could be close to reaching a bottom. The report from the National Association of Realtors on Tuesday also showed the smallest increase in annual house prices since 2012...” Story at...
https://finance.yahoo.com/news/u-existing-home-sales-fall-150228036.html
 
2 YEAR & FED FUNDS IN HARMONY (Heritage Capital)
“While the 2-Year has bounced this month it is currently sitting right on the Fed Funds Rate, meaning temporary perfect equilibrium. The next thing to watch for is when the 2-Year hits 4%. That will confirm the rate hike cycle is officially and firmly over...Stocks are hanging in and will likely revisit last week’s lows shortly. I wrote about the moderation of the rally a few weeks ago when Goldman Sachs’ David Kostin went from bear to bull right at February highs. Funny how often that happens with high profile pundits. So far, none of the major indices have done anything wrong to indicate something deeper. This just looks like a routine stock market pullback.” Commentary at...
https://investfortomorrow.com/blog/2-year-fed-funds-in-harmony-today/
 
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 fell about 2% to 3997.
-VIX rose about 14% to 22.87.
-The yield on the 10-year Treasury rose to 3.955%.
 
PULLBACK DATA:
-Drop from Top: 13.5% as of today. 25.4% max (on a closing basis).
-Trading Days since Top: 283-days.
The S&P 500 is 1.4% ABOVE its 200-dMA & 0.5% 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.
 
MY TRADING POSITIONS:
XLK – Technology ETF.
XLE – Energy Sector ETF. It hasn’t been doing much recently, but Russia is cutting production and that should help the sector.  We have a good dividend in the meantime.
BA – (Boeing) I am late on this one, but we’ll see.
XLY - Consumer Discretionary ETF.
 
SHY – Short term bonds. 30-day yield is 4.2%. (Trailing 1-year yield is 1.3%.) I’ll hold this, but if the market retests the lows, I’ll sell it and buy stocks.)
 
TODAY’S COMMENT:
My system is built to try to call the big turning points in the markets.  That said, I do have a fair number of indicators that tend to follow short-term trends. We look at them for short-term signs, but with a warning that short-term timing is usually a loser’s game.
 
When I look for signs that this weakness is ending, I don’t see too many.  Bollinger Bands are close to a buy signal; RSI is not. The number of up-days over the last 10 and 20 days are 8 and 9 respectively, so they aren’t saying buy yet. Our statistical signals, especially Variance, did not jump up today (that would suggest panic selling) so we don’t have a buy signal there either.
 
The only buy-signals in the “Top-Bottom” ensemble are the Fosback long and short-term Logic Indicators; they have both been sending buy-signals since late January. Neither of these indicators are going to be good for a short-term call since they are based on new-high/new-low data that is typically slow to turn.
 
Today could have been a short-term bottom, but it appears that the S&P 500 could drop a bit further before we see a turn-around. I suspect the Index may break its 50-day moving average (50-dMA) now about 3980. The 200-dMA is about 3940.  I doubt that the index will break that level.
 
I’ll reset my leveraged positions (SSO & QLD) if the Index breaks its 50-dMA or if I see other bull signs.
 
Today, the daily spread of 20 Indicators (Bulls minus Bears) declined from zero to -2 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations declined from +38 to +29. (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: PRICE is positive; VIX & SENTIMENT are neutral.  VOLUME was actually negative.
 
(The important BUY in this indicator was on 21 October, 7-days after the bottom. For my NTSM overall signal, I suggested that a short-term buying opportunity occurred on 27 September (based on improved market internals on the retest), although without market follow-thru, I was unwilling to call a buy; however, I did close shorts and increased stock holdings. I issued a Buy-Signal on 4 October, 6-days before the final bottom, based on stronger market action that confirmed the market internals signal.)
 
Bottom line: I’m remain a BULL, although somewhat more cautious.
 
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

TUESDAY 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 65% stocks, including stock mutual funds and ETFs. I’m usually about 50% invested in stocks.
 
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.