Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...
A day to remember the fallen, 22 years ago.
“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
“I was talking to a doctor friend who works in a local
hospital regarding the obesity crisis in America. She said that the Hospitals
can’t counsel for obesity. I said, “Of course not, Fat Shaming!” She said no,
the issue was that Hospitals are scored on patient surveys and they must get
top reviews across the board or they get less money from the Government
(Medicare I presume). Hospitals have found that patients give lower grades when
they are counseled for obesity and smoking. Hence...no counseling for obesity
and smoking. Once again, the Government, though well intentioned, has screwed
up an important service.” – Meade Stith, NTSM Blog.
STOCK MARKETS IN VULNERABLE POSITION (Heritage Capital, Friday)
“I will speculate and say that the stock market is more
likely to close below the August lows at this point, probably later this
month...A good number of indicators are lining up and positioning themselves
for a bottom in a few weeks or so. That remains my operating thesis, a low in
late September to early October followed by a rip-roaring rally into 2024 that
is led by tech, AI and other risk on assets. I urge you not to get caught up
the narratives being spun by pundits in the media.” – Paul Schatz, President
Heritage Capital . Commentary at...
https://investfortomorrow.com/blog/stock-market-in-a-vulnerable-position/
ECONOMIC DATA POINTS DIVERGE (Real Investment advice)
“Given the wide range of other confirming indicators
previously discussed, betting on the “avoidance” of a recession, particularly
given such tight financial conditions, seems risky...” Commentary at...
https://realinvestmentadvice.com/economic-data-points-diverge/
MARKET REPORT / ANALYSIS
-Monday the S&P 500 rose about 0.7% to 4487.
-VIX dipped about 0.3% to 13.80.
-The yield on the 10-year Treasury rose to 4.290%.
PULLBACK DATA:
-Drop from Top: 7.5%. 25.4% max (on a closing basis).
-Trading Days since Top: 423-days.
The S&P 500 is 6.9% ABOVE its 200-dMA and 0.2%
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:
XLK – Technology ETF (holding since the October lows).
SPY – I bought a large position in the S&P 500
Friday, 8/14, in my 401k (it has limited choices).
XLY - Consumer Discretionary ETF. (Holding since the
October lows - I bought more XLY Monday, 8/21.)
XLE – Added Tuesday, 8/22.
SSO – 2x S&P 500 ETF. Added 8/24.
CSCO – added 9/5.
TODAY’S COMMENT:
I think the markets go up from here. I worry though,
because Paul Schatz (commentary above) is calling for a low in late September
or October. It would be logical for
markets to retrace 50% of the gains since last October. So, a bottom in September or October is
always possible. There are signs (and calls from a lot of Pros, Tom McClellan,
Tom Lee, and even Paul Schatz) that a strong turn higher is likely soon.
Today, there was a new bear-sign, because of a Hindenburg
Omen. Both New-highs and New-lows are
somewhat elevated along with a few other criteria. I am not too concerned about
this signal. Currently, new-lows are a hold-over from the recent market
weakness. New-highs are improving and
that’s a good sign. If the Omens persist, I’ll start to worry. Not much happened when this signal last occurred
in early August. Most indicators remain bullish.
The daily spread of 20 Indicators (Bulls minus Bears) improved
from -3 to +1 (a positive number is bullish; negatives are bearish); the 10-day
smoothed sum that smooths the daily fluctuations improved from +30 to +38.
(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 remains
HOLD: PRICE is Bullish; SENTIMENT, VIX & VOLUME 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 Bullish.
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
MONDAY MARKET INTERNALS (NYSE
DATA)
My basket of Market Internals remained 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 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.
