FED Rate Decision ... New Home Sales ... Crude oil Inventories ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

 
“Congress, if you will, please investigate the political witch hunts against me currently being brought by the corrupt DOJ and FBI, who are totally out of control...This continuing saga is retribution against me for winning and even more importantly to them, election interference regarding the 2024 presidential election. It will be their updated form of rigging our most important election. Look at the polls, they can’t beat me.”  - Donad Trump.
My cmt: What F’ng’ crap!
 
FED RATE DECISION (CNN)
“The Federal Reserve raised its benchmark lending rate by a quarter point Wednesday, lifting interest rates to their highest level in 22 years... Fed officials are estimating one more rate hike this year, according to their latest set of projections.” Story at...
https://www.cnn.com/2023/07/26/economy/fed-july-interest-rate-decision-final/index.html
 
NEW HOME SALES (CNN)
“New home sales dropped in June from the month before, even as buyers continued to rely on new construction as an alternative to the historically low supply of existing homes for sale. Sales of newly constructed homes were down 2.5% in June from a revised surge of 6.6% in May, although they were up 23.8% from a year ago...”Story at...
https://www.cnn.com/2023/07/26/homes/new-home-sales-fall-june/index.html
 
CRUDE INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 0.6 million barrels from the previous week. At 456.8 million barrels, U.S. crude oil inventories are approximately 2% above the five-year average for this time of year.” Report at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf
 
BYDEN DISCHARGES MORE STUDENT DEBT (YahooFinance)
“The Education Department and the Colorado attorney general on Tuesday announced $130 million in automatic debt discharge for 7,400 Colorado student loan borrowers who attended CollegeAmerica. Based on evidence gathered by the Colorado attorney general’s office, the Education Department found that CollegeAmerica’s parent company — the Center for Excellence in Higher Education (CEHE) — made misrepresentations about graduates’ salaries and employment rates, its programs, and the terms of private loans it offered borrowers.” Story at...
https://finance.yahoo.com/news/biden-discharges-130m-in-student-debt-for-7400-collegeamerica-borrowers-175122931.html
My cmt: So, prosecute the criminals. Why are the taxpayers footing the bill? Ans. It’s all about transferring wealth and buying votes.
 
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 was down slightly, but remained 4567.
-VIX slipped about 5% to 13.19.
-The yield on the 10-year Treasury slipped to 3.865%.
 
PULLBACK DATA:
-Drop from Top: 4.8%. 25.4% max (on a closing basis).
-Trading Days since Top: 391-days.
The S&P 500 is 12.4 % ABOVE its 200-dMA (overbought) and 4.9% 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 we called a buy on 4 October 2022.
 
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.
 
MSFT – Microsoft. It was down 3.8% today and is no longer the #1 momentum stock in the Dow.  It has under-performed other Dow stocks over the last 2 months. This is a trade for me so I plan to sell tomorrow.
 
XLK – Technology ETF.
XLY - Consumer Discretionary ETF.
 
KRE – Regional Banking ETF. This is a very small position for me. KRE tested the May 4 low of 36.08 on much lower volume 11 & 12 May.
 
SHY – Short term bonds.
 
TODAY’S COMMENT:
The chart shows the impact of the Fed today – extreme at the 2pm announcement, but overall, not much.  The broken record continues – I am still expecting to see a relatively small pullback start soon.

The following chart may be foreshadowing the expected decline. Recently, utilities are outperforming the S&P 500 - a bearish sign.
  
The daily spread of 20 Indicators (Bulls minus Bears) slipped from -1 to -5 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations dropped from +41 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 BUY: PRICE & VIX are positive; VOLUME & SENTIMENT are neutral. (This indicator ensemble is showing positive market conditions, but I expect a better buying point ahead.)
 
(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 21 December, 9 sessions before the high of this recent bear market, based on the bearish “Friday Rundown” of indicators.)
 
Bottom line: I remain a cautious Bull, expecting a decline of around 5% on the S&P 500 to start soon. (The Broken Record continues!)
 
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
 
WEDNESDAY MARKET INTERNALS (NYSE DATA)

My basket of Market Internals slipped to HOLD. (My basket of Market Internals is 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 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 as I did back in October.