CPI ... Jobless Claims ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...
“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
“...[Raising the Debt Ceiling] isn’t about paying bills
from the Trump Administration, but also every President before him back to
Ronald Reagan. For each year that we amass more enormous debts and
deficits, the interest payments increase along with the growing burden
of “mandatory spending.” – Lance Roberts.
CPI (Yahoo Finance)
“Consumer prices showed a faster year-over-year increase
in July compared to the previous month's annual gain, according to the latest data from
the Bureau of Labor Statistics released Thursday morning.
The Consumer Price Index (CPI) rose 3.2% in July over the
prior year, a slight acceleration from June's 3% annual increase... On a
"core" basis, which strips out the more volatile costs of food and
gas, prices in July climbed 0.2% over the prior month and 4.7% over last year...”
Story at...
https://finance.yahoo.com/news/inflation-consumer-prices-rise-32-in-july-as-inflation-slowdown-stalls-123122066.html
My cmt: Pundits are suggesting that the CPI report does
not indicate future rate hikes are required. Given that Fed President Patrick
Harker said recently that Fed rates hikes might be done, I’d have to agree.
JOBLESS CLAIMS (fxstreet)
"Initial Jobless claims totaled 248,000 in the week ending
August 5, the weekly data published by the US Department of Labor (DOL) showed
on Thursday. The highest level in five weeks." Story at...
https://www.fxstreet.com/news/us-weekly-initial-jobless-claims-rise-to-248k-vs-230k-expected-202308101233
https://www.fxstreet.com/
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 rose about 1 pt to 4469.
-VIX slipped about 0.7% to 15.85.
-The yield on the 10-year Treasury rose to 4.110
PULLBACK DATA:
-Drop from Top: 6.8%. 25.4% max (on a closing basis).
-Trading Days since Top: 401-days.
The S&P 500 is 8.7% ABOVE its 200-dMA and 0.8%
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.
SHY – Short term bonds.
TODAY’S COMMENT:
Markets looked pretty good in the early morning...but the
Bears won again. The S&P 500 has fallen roughly 4% in this pullback. Is that
enough? Maybe, but I doubt it. The chart
still shows a lot of room below today’s close before it would get to the lower
trend line. It is close to the 50-dMA and that is the short-term lower trend
line, if one draws a chart from May. That may be too optimistic a notion. The
Index hasn’t visited its longer term lower trendline since March. That level
still looks like about S&P 4200 although the 100-dMA is now 4269.
My opinion is not changed: This still looks like a normal
pullback to the lower trend line. I expect the pullback to continue. I always
remember, the indicators aren’t very good at calling short term moves.
The daily spread of 20 Indicators (Bulls minus Bears) remained
-6 (a positive number is bullish; negatives are bearish); the 10-day smoothed
sum that smooths the daily fluctuations improved from -53 to -52. (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, VIX, VOLUME & SENTIMENT are neutral.
(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. The pullback
(underway) is needed to bring the markets back into balance. I’ll go back to an
over-invested position later, probably after the S&P 500 drops below the
50-dMA, but before it get’s to the 100-dMA.
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
THURSDAY MARKET INTERNALS
(NYSE DATA)
My basket of Market Internals remained SELL. (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.
