Trump to be Charged with Racketeering ... Tempering Market Enthusiasm ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

 
“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
FULTON COUNTY PROSECUTORS PREPARE RACKETERING CHARGES IN TRUMP INQUIRY (The Guradian)
“The Fulton County district attorney investigating Donald Trump’s efforts to overturn the 2020 election results in the state of Georgia has developed evidence to charge a sprawling racketeering indictment next month, according to two people briefed on the matter... A special grand jury in Atlanta that heard evidence for roughly seven months recommended charges for more than a dozen people, including the former president himself, its forewoman strongly suggested in interviews... The district attorney originally suggested charging decisions were “imminent” in January, but the timetable has been repeatedly delayed after a number of Republicans who acted as fake electors accepted immunity deals as the investigation neared its end.” Story at...
https://www.theguardian.com/us-news/2023/jul/21/georgia-trump-charges-fraud-election-2020
 
CLUES TO TEMPER MARKET ENTHUSIAM (Heritage Capital)
“The markets gave us an interesting clue to where the rally stands on Thursday. Both Tesla and Netflix reported earnings that were generally fine. There were a few tiny pieces of negativity, but nothing really big. Both stocks were hit hard as was the NASDAQ 100... anything that comes in as expected or worse will be met with selling. And that should give us the first real pullback since March to buy... I am starting to temper what has been exuberant enthusiasm for 9 months.” Commentary at...
https://investfortomorrow.com/blog/tesla-netflix-offering-clues-as-i-start-to-temper-exuberant-enthusiasm/
 
MARKET REPORT / ANALYSIS
-Friday the S&P 500 was little changed at 4536.
-VIX dipped about 3% to 13.60.
-The yield on the 10-year Treasury slipped to 3.841%.
 
PULLBACK DATA:
-Drop from Top: 5.4%. 25.4% max (on a closing basis).
-Trading Days since Top: 388-days.
The S&P 500 is 11.9 % ABOVE its 200-dMA (overbought) 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.
 
MSFT – Microsoft.
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. 30-day yield is 5.04% - 9 June 2023. (Trailing 1-year yield is 3.04%.) Once this weak period ends, I’ll sell SHY and buy stocks/stock ETFs.
 
TODAY’S COMMENT:
We look at a summary of indicators on Friday: The weekly rundown of indicators moved a little more strongly to the Bull side (now 4-bear and 19-bull). (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.
-MACD of S&P 500 price made a bullish crossover 13 July.
-My Money Trend indicator 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.
-The graph of the 100-day Count (the 100-day sum of up-days).
-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.
-69% of the 15-ETFs that I track have been up over the last 10-days.
 
NEUTRAL
-There was a Follow Thru day 18 July that cancels prior Distribution Days.
-There have been 2 Statistically-Significant days (big moves in price-volume) in the last 15-days.
-Bollinger Band Squeeze 28 April - expired.
-Bollinger Bands were bearish 18 July, but are neutral today.
-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.
-10 May there was a Bullish Outside Reversal Day – Expired.
-Sentiment.
-The short-term, 10-day EMA, Fosback Hi-Low Logic Index is neutral.
-There have been 8 up-days over the last 10 sessions – leaning bearish, but neutral.
-There have been 12 up-days over the last 20 sessions - neutral.
-RSI was overbought on 17 & 19 July but it 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 flat to the S&P 500.
-The S&P 500 is 11.9% above its 200-dMA. (Bear indicator is 12% above the 200-day.)
 
BEAR SIGNS
-Overbought/Oversold Index (Advance/Decline Ratio).
-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.
-The Smart Money (late-day action).
-S&P 500 spread vs. Utilities (XLU-ETF) shows the Index outpacing Utilities, however, it peaked a week ago so I’ll put it in the bear camp.
 
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 4 bear-signs and 19-Bull. Last week, there were 5 bear-sign and 17 bull-signs.
 
Repeating a comment from last week: The current indicator spread is very bullish although I have been calling for a short-term retreat. My opinion, based on some top indicators and the chart, is not necessarily at odds with the Friday Summary listed above. The Friday summary reinforces the view that a retreat is likely to be shallow and normal – say to near the 50-dMA. It is likely that dip-buyers will move in before the Index reaches its 50-dMA.
 
Most indicators are market following. Indicators give us a good idea of trend and some of them can foresee a problem if there is a divergence in the market internals compared to the Index.  It is important to remember that they do not predict the future.  There is no magic crystal ball.  The point is that the bullish numbers don’t guarantee continued bullish action. It is the most likely outcome, because the trend is up, but that trend is overdue for t least a smal reversal.  
 
The daily spread of 20 Indicators (Bulls minus Bears) declined from +6 to +5 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations improved from +41 to +45. (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 & VOLUME are positive; VIX & 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 5-6% 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
 
FRIDAY MARKET INTERNALS (NYSE DATA)

My basket of Market Internals remained 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 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.