PCE Prices ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

 
“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
Monday will be another late post.  I have been busy recently.
 
PCE PRICES / PCE PRICES CORE (Yahoo Finance)
“The Federal Reserve's preferred inflation metric grew in June at its slowest annual rate since September 2021. The Personal Consumption Expenditures (PCE) Index grew 3.0% year over year in June, down from 3.8% the month prior... "Core" PCE, which excludes the volatile food and energy categories, grew 4.1%...We think the wage growth will slow further as economic growth slows, allowing the Fed to hold rates steady after this week's rate hike, but the risk is still tilted toward additional rate increases," Oxford Economics lead US economist Nancy Vanden Houten wrote... Story at...
https://finance.yahoo.com/news/feds-preferred-inflation-measure-shows-cooling-price-increases-in-june-160552467.html
 
MARKET REPORT / ANALYSIS
-Friday the S&P 500 was up about 1% to 4582.
-VIX fell about 7% to 13.33.
-The yield on the 10-year Treasury was 3.994%.
 
PULLBACK DATA:
-Drop from Top: 4.5%. 25.4% max (on a closing basis).
-Trading Days since Top: 393-days.
The S&P 500 is 12.5% ABOVE its 200-dMA and 4.8% 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.
 
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:
We look at a summary of indicators on Friday: The weekly rundown of indicators moved a little more to the Bull Bear side (now 6-bear and 17-bull), but still strongly bullish. (These indicators tend to be both long-term and short-term, so they are different than the 20 that I report on daily.)
 
BULL SIGNS
-The smoothed advancing volume on the NYSE is rising.
-The 10-dMA percentage of issues advancing on the NYSE (Breadth) is above 50%.
-The 50-dMA percentage of issues advancing on the NYSE (Breadth) is above 50%.
-The 100-dMA percentage of issues advancing on the NYSE (Breadth) is above 50%.
-MACD of the percentage of issues advancing on the NYSE (breadth) made a bullish crossover 3 July.
-Smoothed Buying Pressure minus Selling Pressure is rising.
-Long-term new-high/new-low data.
-Short-term new-high/new-low data.
-McClellan Oscillator.
-The long-term, 50-dEMA, Fosback Hi-Low Logic Index.
-Slope of the 40-dMA of New-highs is rising.
-On average, the size of up-moves has been larger than the size of down-moves over the last month.
-VIX indicator.
-The 5-10-20 Timer System is BUY.
-The 5-day EMA is above the 10-day EMA so short-term momentum is bullish.
-59% of the 15-ETFs that I track have been up over the last 10-days.
-S&P 500 spread vs. Utilities (XLU-ETF) shows the Index outpacing Utilities.
 
NEUTRAL
-There was a Distribution Day 27 July, but one is not eough to send a signal
-There have been 3 Statistically-Significant days (big moves in price-volume) in the last 15-days.
-Sentiment.
-Bollinger Band Squeeze 28 April - expired.
-Bollinger Bands are elevated, but are neutral.
-Overbought/Oversold Index (Advance/Decline Ratio).
-The graph of the 100-day Count (the 100-day sum of up-days).
-The 50-dMA percentage of issues advancing on the NYSE (Breadth) has not been below 50%, for more than 3 days in a row.
-There was a Zweig Breadth Thrust 31 March. That’s a rare, very-bullish sign, but the McClellan Oscillator subsequently turned negative, so this indicator has expired.
-The short-term, 10-day EMA, Fosback Hi-Low Logic Index is neutral.
-There have been 7 up-days over the last 10 sessions – leaning bearish, but neutral.
-There have been 13 up-days over the last 20 sessions - neutral.
-RSI was overbought on 26 July but is now neutral.
-There was a 90% down-volume day 9 March.
-There was a Hindenburg Omen signal 3 May 2023. The McClellan Oscillator turned positive 18 May. – Expired.
-The Calm-before-the-Storm/Panic Indicator flashed a panic-buying signal 10 November - expired.
-2.8% of all issues traded on the NYSE made new, 52-week highs when the S&P 500 made a new all-time-high, 3 January 2022. (There is no bullish signal for this indicator.) This indicated that the advance was too narrow and a correction was likely to be >10%. It proved correct, but is now Expired.
-XLI-ETF (Cyclical Industrials) is underperforming the S&P 500, but improving sharply – call it neutral..
 
BEAR SIGNS
-Issues advancing on the NYSE (Breadth) compared to the S&P 500. The Index is too far ahead of Breadth as it has been for a month.
-27 July there was a Bearish Outside Reversal Day.
-The S&P 500 is 12.5% above its 200-dMA. (Bear indicator is 12% above the 200-day.)
-MACD of S&P 500 price made a bearish crossover 27 July.
-My Money Trend indicator is falling.
-The Smart Money (late-day action).
 
On Monday’s update of the Friday summary of indicators (20 December 2021), 9 days before the top of the 25% correction, there were 21 bear-signs and zero bull-signs. Now there are 6 bear-signs and 17-Bull. Last week, there were 4 bear-sign and 19 bull-signs.
 
The daily spread of 20 Indicators (Bulls minus Bears) improved from -7 to zero (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations dropped from +13 to +7. (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 improved to 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. There is a decline of around 5% on the S&P 500 coming. I’ve been suggesting the pullback would begin soon. It’s hard to say.  There are only 3 Top Indicators now with bearish signals. The melt up may continue.
 
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
 
FRIDAY MARKET INTERNALS (NYSE DATA)

My basket of Market Internals improved to BUY. (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 50% 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.