Existing 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.
 
“This [Trump prosecution in NY] is the worst example in my 60 years of practicing criminal law, of targeting somebody for prosecution and then rummaging through the books, giving people immunity and trying to concoct a crime that doesn’t exist. And if this is allowed to succeed, none of our liberties is safe...You know, today it’s a Republican who’s a target. Tomorrow it’s a Democrat, and the day after tomorrow, it’s your Uncle Charlie, or your nephew, or your niece...they had to staple together two unrelated statutes, one federal, one state, violate the statute of limitations, violate the rule of law, and concoct a crime.” - Alan Dershowitz, American lawyer and former Harvard law professor. Commentary at...
Alan Dershowitz on Trump Indictment: Violation of ‘Bible’ (mediaite.com)
 
EXISTING HOME SALES (YahooFinance)
“Existing home sales in February jumped 14.5% to an annualized rate of 4.58 million, the largest monthly percentage increase since July 2020 and ending a 12-month slide, data from the National Association of Realtors out Tuesday showed.” Story at...
https://finance.yahoo.com/news/existing-home-sales-jump-in-february-as-mortgage-rates-fall-140027320.html
 
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 rose about 1.3% to 4003.
-VIX fell about 11% to 21.38.
-The yield on the 10-year Treasury rose to 3.609%.
 
PULLBACK DATA:
-Drop from Top: 16.5% as of today. 25.4% max (on a closing basis).
-Trading Days since Top: 303-days.
The S&P 500 is 1.7% ABOVE its 200-dMA & 0.2% 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.
 
MY TRADING POSITIONS:
I am not trading as much as in the past. You may wish to use the momentum charts and/or the Monday 40-day gain charts for trading the Dow stocks and ETFs.
QLD – 2xNasdaq 100
SSO – 2x S&P 500
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. They have more work than they can handle and are hiring. They should do well going forward.
XLY - Consumer Discretionary ETF.
*KRE – Regional Banking ETF. Added Monday. This is a small position for me.  I have no cash left.
 
SHY – Short term bonds. 30-day yield is 4.6%. (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.)
 
If it’s not tech, it’s probably not working.
 
TODAY’S COMMENT:
Sentiment reached very low (bearish) levels yesterday. I measure Sentiment as %-Bulls (Bulls/{bulls+bears}) based on the amounts invested in Rydex/Guggenheim mutual funds on a 5-day moving average. I track this using a standard deviation basis and it is now issuing a bull sign. There are others, too.
 
MACD of S&P 500 price switched to a bull signal; the 5-day EMA is above the 10-day EMA so short-term momentum has turned bullish; Smart Money is buying and the smoothed advancing volume on the NYSE is rising, to name a few.
 
It’s interesting to hear the Fast Money pundits on CNBC all saying that the market is mispricing risk because of a coming recession.  (Curiously, some of them are long while they are talking down the market.  What’s that about?) The Market doesn’t misprice anything.  The Market consists of a mass of investors who are voting with their money.  Right now, they are voting that a recession may be farther away than the experts think.  Trade what you see; not what you think.  
 
Today, the daily spread of 20 Indicators (Bulls minus Bears) improved from -5 to -1 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations declined from -41 to -43. (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 was HOLD: VIX, VOLUME & PRICE are negative; SENTIMENT is bullish.
 
(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. The NTSM sell-signal was issued 20 December, 8 sessions before the high of this recent bear market, based on the bearish Friday rundown of indicators.)
 
Bottom line: I am a nervous bull, but we saw good price-action again today. The S&P 500 remained above its 200-dMA; let’s see if it can break above the 50-dMA and remain there.
 
ETF - 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
 
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 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 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.