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Enjoy the Holiday!  Markets will be closed Monday for Labor Day.
 
“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
“We look historically. What we’ve observed so far: There are no long-term trends in hurricanes or more generally tropical cyclones, as they’re called technically. And I think many people find that as a surprise. Over the last, roughly almost a century, we see no detectable trends in hurricanes. We do see for about the last 70 years some intensification of precipitation over the land. And we see that in the US rainfall has gotten more intense, but not necessarily more plentiful, in the Northeast, the upper Midwest, and the Northwest.” - Steven Koonin PhD.
https://www.aei.org/economics/what-do-we-know-about-climate-change-my-long-read-qa-with-steven-koonin/
 
UNEMPLOYMENT RATE / PAYROLL REPORT / AVG HOURLY EARNINGS (CNBC)
“The unemployment rate rose sharply in August, as the summer of 2023 neared a close with a job market in slowdown mode. Nonfarm payrolls grew by a seasonally adjusted 187,000 for the month, above the Dow Jones estimate for 170,000... the unemployment rate was 3.8%, up significantly from July and the highest since February 2022... Average hourly earnings increased 0.2% for the month and 4.3% from a year ago.” Story at... 
https://www.cnbc.com/2023/09/01/jobs-report-august-2023.html
 
ISM MANUFACTURING (ISM via prnewswire)
"The August Manufacturing PMI® registered 47.6 percent, 1.2 percentage points higher than the 46.4 percent recorded in July. Regarding the overall economy, this figure indicates a ninth month of contraction after a 30-month period of expansion... The U.S. manufacturing sector shrank again, but the uptick in the PMI® indicates a slower rate of contraction.” Press release at...  
https://www.prnewswire.com/news-releases/manufacturing-pmi-at-47-6-august-2023-manufacturing-ism-report-on-business-301915209.html
 
MARKET REPORT / ANALYSIS
-Friday the S&P 500 rose about 0.2% to 4516.
-VIX slipped about 4% to 13.09.
-The yield on the 10-year Treasury rose to 4.186%.
 
PULLBACK DATA:
-Drop from Top: 5.9%. 25.4% max (on a closing basis).
-Trading Days since Top: 418-days.
The S&P 500 is 8.6% ABOVE its 200-dMA and 1% 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.
 
TODAY’S COMMENT:
I measure Sentiment as %-Bulls (Bulls/{bulls+bears}) based on the amounts invested in Rydex/Guggenheim mutual funds on a 5-day moving average and analyzed on a standard deviation basis. Today, the Sentiment indicator switched to a BUY indication. It suggests investors have gotten too bearish. I’d be bullish just on this contrarian indicator, but there was a huge swing in indicators this week.
 
We look at a summary of indicators on Friday: The weekly rundown of indicators made a drastic improvement to the Bull side – (now zero-bear and 22-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
-There were Follow Thru Days on 23 Aug & 29 Aug.
-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%.
-Sentiment. This one is a big deal – we rarely see this indicator signal. It’s a buy because Rydex investors have gotten overly bearish.
-The smoothed advancing volume on the NYSE is rising.
-MACD of the percentage of issues advancing on the NYSE (breadth) made a bullish crossover 1 September.
-MACD of S&P 500 price made a bullish crossover 29 August.
-My Money Trend indicator is rising.
-Long-term new-high/new-low data.
-Short-term new-high/new-low data.
-The long-term, 50-dEMA, Fosback Hi-Low Logic Index.
-McClellan Oscillator.
-Slope of the 40-dMA of New-highs is rising.
-The Smart Money (late-day action).
-On average, the size of up-moves has been larger than the size of down-moves over the last month.
-There were back-to-back 80%+ up-volume days 28 & 29 Aug.
-XLI-ETF (Cyclical Industrials) is slightly outperforming the S&P 500 – call it bullish.
-The 5-10-20 Timer System is BUY.
-The 5-day EMA is above the 10-day EMA, so short-term momentum is bullish.
-S&P 500 spread vs. Utilities (XLU-ETF) shows the Index outpacing Utilities.
-63% of the 15-ETFs that I track have been up over the last 10-days. (45-55% is neutral.)
 
NEUTRAL
-10 August there was a Bullish Outside Reversal Day. Expired
-There have been 4 Statistically-Significant days (big moves in price-volume) in the last 15-days.
-Bollinger Band Squeeze 28 April - expired.
-Bollinger Bands – close to overbought, but not there yet.
-The 50-dMA percentage of issues advancing on the NYSE (Breadth) has not been below 50%, for more than 3 days in a row.
-Overbought/Oversold Index (Advance/Decline Ratio).
-Issues advancing on the NYSE (Breadth) compared to the S&P 500.
-Smoothed Buying Pressure minus Selling Pressure is flat.
-There was a Hindenburg Omen signal 6 Aug 2023 – expired. The McClellan Oscillator turned positive.
-The short-term, 10-day EMA, Fosback Hi-Low Logic Index is neutral.
-There have been 7 up-days over the last 10 sessions.
-There have been 10 up-days over the last 20 sessions.
-The graph of the 100-day Count (the 100-day sum of up-days).
-RSI.
-The S&P 500 is 8.6% above its 200-dMA. (Bear indicator is 12% above the 200-day.)
-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.
-VIX indicator.
-The Calm-before-the-Storm/Panic Indicator flashed a top warning signal 31 July & 1 August. That looks like it was the short-term top; now 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.
 
BEAR SIGNS
-NONE
 
On Monday’s update of the Friday summary of indicators (20 December 2021), 9 days before the top of the current 25% correction, there were 21 bear-signs and zero bull-signs. Now there are zero bear-signs and 21-Bull.  That’s one of the larger turn-arounds that I remember. Last week, there were 13 bear-sign and 7 bull-signs.

 
The daily spread of 20 Indicators (Bulls minus Bears) declined from +11 to +10 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations improved from +1 to +15. (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 to BUY: PRICE & VOLUME are Bullish; VIX & SENTIMENT are neutral. SENTIMENT is nearly giving a bullish signal because Rydex investors turned very bullish.
 
(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: Given the indicators, I am Bullish. “Looking good, Billy Ray! Feeling good, Louis!” Tuesday, I may increase stock holdings, if I can find some more cash.
 
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 70% 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.
 
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.