Business Optimism ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

 
“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
“Noting today’s black-white wealth disparities, authors including Ta-Nehisi Coates, Nikole Hannah-Jones and Ibram X. Kendi have advocated reparations in the name of social justice. So have such prominent organizations as the NAACP and Black Lives Matter. Mr. Sowell can’t take their arguments seriously.
‘The situation of slavery in some ways is much like the situation of conquered people...There’s no question whatsoever that conquered people have been treated in a terrible way. Being conquered by the Romans was not a fate you would wish on anyone. But the fact is that the net result has been that those parts of Europe conquered by the Romans have been the most advanced parts of Europe for centuries. Similarly, when someone black says...‘I’m worse off because of slavery,’ there’s no way in hell you can say that with a straight face. If you’re going to base reparations on the difference between where blacks today would be if it were not for slavery, then blacks would have to pay reparations to white people.” – Thomas Sowell, senior fellow at the Hoover Institution quoted from WSJ Opinion page.
 
NFIB BUSINESS OPTIMISM (NFIB)
“The NFIB Small Business Optimism Index decreased half of a point in September to 90.8... “Owners remain pessimistic about future business conditions, which has contributed to the low optimism they have regarding the economy,” said Bill Dunkelberg, NFIB Chief Economist. “Sales growth among small businesses have slowed and the bottom line is being squeezed, leaving owners few options beyond raising selling prices for financial relief.”
https://www.nfib.com/surveys/small-business-economic-trends/
 
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 rose about 0.5% to 4358.
-VIX fell about 4% to 17.03.
-The yield on the 10-year Treasury declined to 4.657%.
 
PULLBACK DATA:
-Drop from Top: 9.1%. 25.4% max (on a closing basis).
-Trading Days since Top: 443-days.
The S&P 500 is 3.4% ABOVE its 200-dMA and 1.3% 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:
We’ve been watching the new-high/new-low data and today we got further confirmation of an end to the weakness: today, new, 52-week highs outpaced new, 52-week lows. We haven’t seen that in 6-weeks.
 
A lot of indicators have switched to the Bullish side.
 
Looks like correction over to me. Now we’ll see if the Index can break above its 50-dMA.
 
The daily spread of 20 Indicators (Bulls minus Bears) improved from +3 to +7 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations improved from -61 to -48. (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 is bearish; VOLUME, SENTIMENT & VIX 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.)
 
It looks like we have already seen the bottom. There are indications that the bottom was Wednesday at 4230 on the S&P 500. I think we got confirmation yesterday, 9 October and again today.
 
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 improved to 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 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.