Consumer Confidence ... New 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.
“Is there really a man-made global warming crisis?... Dr.
John Clauser, a renowned physicist and Nobel Prize winner...vehemently opposes
the notion of a man-made climate crisis. In fact, he believes it's all a
deliberate hoax... founder of the Weather Channel, John Coleman. The now-late
veteran weatherman [said]... ‘Climate change is not happening; there is no
significant man-made global warming now, there hasn’t been any in the past, and
there is no reason to expect any in the future.’... Judith Curry...Georgia
Institute of Technology professor emerita...had scathing criticisms of her
colleagues in the science world. She has accused other scientists of
deceptively fueling the man-made climate emergency for ‘fame and fortune.’"
Story at...
Manufactured
Climate Consensus Deemed False By Climate Scientist - 'The Time For Debate Has
Ended' (msn.com)
My cmt: It is reasonably clear that the Earth has warmed
by 1 degree centigrade over the last 100 years.
The warming is due to rising CO2 levels in the atmosphere that are
manmade. (The physics are well understood from examining CO2 and temperatures
on other planets in our solar system.) Predictions suggest more hurricanes,
more tornados, faster sea level rise, high rainfall levels and many more catastrophes. The problem is that those climate changes
have not yet exceeded past variability of the data, thus the current climate
panic seems totally unjustified. Remember, the Intergovernmental Panel on
Climate Change (IPCC) defines climate in 30-year slices. Too often, the news
media reports on weather, not climate. Sadly, it has become so politicized that
we see absurd “climate fixes” like cancelling the Keystone Pipeline, that has
no effect on fossil fuel use, or eliminating gasoline powered cars when even
the DOT states it will have no effect on Global temperatures (in its current
rulemaking on gasoline mileage).
CONSUMER CONFIDENCE (Conference Board)
"Consumer confidence fell again in September 2023, marking two consecutive months of
decline," said Dana Peterson, Chief
Economist at The Conference Board... "Expectations for the next six months
tumbled back below the recession threshold of 80, reflecting less confidence
about future business conditions, job availability,
and incomes.” Press release at...
https://www.prnewswire.com/news-releases/us-consumer-confidence-fell-again-in-september-301938908.html
NEW HOME SALES (CNBC)
“Sales of newly built homes fell 8.7% in August from
July, to a seasonally adjusted annualized pace of 675,000 units, according to
the U.S. Census Bureau. That is the slowest pace since March. Sales were still
5.8% higher than August 2022.”
https://www.cnbc.com/2023/09/26/new-home-sales-fall-in-august.html
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 fell about 1.5% to 4274.
-VIX rose about 14% to 19.24.
-The yield on the 10-year Treasury rose to 4.553%, a
continuing worry for the stock market.
PULLBACK DATA:
-Drop from Top: 10.9%. 25.4% max (on a closing basis).
-Trading Days since Top: 434-days.
The S&P 500 is 1.9% ABOVE its 200-dMA and 4.3%
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
and we called a buy on 4 October 2022.
MY TRADING POSITIONS:
XLK – Technology ETF (holding since the October 2022
lows).
XLY - Consumer Discretionary ETF. (Holding since the
October 2022 lows - I bought more XLY Monday, 8/21.)
I took profits and then reestablished positions as
follows:
SPY – I bought a large position in the S&P 500
Friday, 8/14, in my 401k (it has limited choices).
XLE – Added Tuesday, 8/22.
SSO – 2x S&P 500 ETF. Added 8/24.
CSCO – added 9/5.
TODAY’S COMMENT:
The markets have been falling all of August and September
with a small peak 31 August. Since the end of August, we could be in a “selling
stampede”; these tend to last 17 – 25 sessions, (the Index is at 17-days now) with
only 1.5- to three-day pauses/throwback rallies, before they exhaust themselves
on the downside. Once the markets get into one of these weekly downside skeins,
they rarely bottom on a Friday. They typically give participants over the
weekend to brood about their losses and then they show up the next Monday in
“sell mode” leading to Turning Tuesday. That’s why I mentioned earlier that we
might have to wait for Turning Tuesday to see a bottom. We didn’t have a turn today;
will we have to wait until next Tuesday for a bottom? Hard to say. Today could have been a bottom.
Today was a statistically significant down-day. That just
means that the price-volume move exceeded my statistical parameters. Statistics
show that a statistically-significant, down-day is followed by an up-day about
60% of the time. Bottoms almost always occur
on or near Statistically-significant, down-days, but not all
statistically-significant, down-days occur at bottoms. Today could be a
short-term bottom. There are 2 bottom indicators that are bullish and we still
see the VIX rate of change indicator in bullish mode. That is not as strong a
signal as we’d like to see, but Mr. Market rarely sends a completely clear
signal and he doesn’t read my blog either. Again, we note that short-term
market moves are difficult to call and involve a lot of luck to get it right.
Although it’s not in my system, the 5-dMA Hi/Lo Logic
Index turned bullish today due to very low new-highs over the last 5-days
suggesting at least a short-term bounce, now or soon.
The RSI and Bollinger Bands for the S&P 500 remains
oversold.
7-Day VIX ROC was 38 today: Per Tom McClellan, "...any
reading above around +20% is a pretty good sign of an oversold bottom for stock
prices, one that is worthy of a bounce...”
Overall though, indicators remain bearish and I haven’t yet
seen a bullish reversal in new-high/new-low data so there is no smoking gun
here. A drop to the 4200-4300 area is
still possible based on chart analysis and the Index 200-dMA, now at 4195.
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 declined from -51 to -56. (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 slipped
to SELL: VOLUME & VIX are bearish; PRICE & SENTIMENT are neutral.
I’m not selling now. I’d prefer to hang on since I
am still expecting a relatively shallow pullback from August highs.
(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.)
It looks like the S&P 500 will dip to its 200-dMA. I
am still cautiously optimistic (perhaps I’m thinking too much) – I don’t think
the market has too much farther to go.
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 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 75% stocks, including stock mutual funds and ETFs. I’m
usually about 50% invested in stocks. I’m “over invested” now expecting new,
all-time highs this year. That burns all the cash. I have about 25% of the portfolio in bonds.
I trade about 15-20% of the
total portfolio using the momentum-based analysis I provide here. When I see a
definitive bottom, I add a lot more stocks to the portfolio using an S&P
500 ETF as I did back in October.
