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“Empowering Democrats.”  - Michael Ramirez. Poltical commentary at...
https://michaelpramirez.com/index.html
 
“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
“If the indictment of Mr. Trump on Espionage Act charges – not to mention his now almost certain indictment for conspiring to obstruct Congress from certifying Mr. Biden as the president on Jan. 6 – fails to shake the Republican Party from its moribund political senses, then it is beyond saving itself. Nor ought it be saved... No assemblage of politicians except the Republicans would ever conceive of running for the American presidency by running against the Constitution and the rule of law. But that’s exactly what they’re planning.” - Former Judge J. Michael Luttig, who was appointed by Bush.
 
NO CLIMATE CATASTROPHE (Newsweek via msn.com)
“U.S. temperature data do not support reports of a record heat wave. Looking at just the surface thermometer data in the United States for June, July, and August of this year, this summer ranked as only the 15th warmest since 1895. Two of the years warmer than 2023 were before 1940...Sadly, the field of climate science has been and continues to be unnecessarily politicized. For example, after several Italian researchers published a peer-reviewed paper last year questioning hyperbolic claims of a climate crisis, outraged ideologues and vested interests bullied the journal into retracting the paper. Another researcher recently indicated that he needed to "le[ave] out the full truth" for his paper to fit one peer-reviewed journal's narrative about climate change.” - Roy Spencer and Kevin Dayaratna. Roy Spencer is a Principal Research Scientist at the University of Alabama in Huntsville, and co-developer of the first method for monitoring global temperatures from Earth-orbiting satellites. Kevin Dayaratna is Chief Statistician, Data Scientist, and Senior Research Fellow at The Heritage Foundation. Story at...
No, the Summer Weather Data Doesn't Amount to Climate Catastrophe | Opinion (msn.com)
 
... Albert Edwards, a global strategist at the French investment bank Société Générale, is worried...The stock market’s strength in 2023 despite the economy-slowing effects of higher interest rates is a combination that feels awfully familiar...“The equity market’s current resilience in the face of rising bond yields reminds me very much of events in 1987, when equity investors’ bullishness was eventually squashed,” he explained in a Tuesday note.
Top strategist sees ‘echoes of the 1987 crash’ in today’s stock market. ‘All you can do is brace yourself and hope for the best’ (msn.com)
My cmt: In 1987, the Dow dropped 23% in one day on Black Monday of 1987.
 
JOBLESS CLAIMS (CNBC)
“The U.S. labor market held strong as September came to a close, with weekly jobless claims holding around recent lows, the Labor Department reported Thursday. Initial filings for unemployment benefits totaled a seasonally adjusted 207,000 for the week ended Sept. 30, up just 2,000 from the previous period...” Story at...
https://www.cnbc.com/2023/10/05/weekly-jobless-claims-sept-30-2023-.html
 
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 slipped about 0.1% to 4258.
-VIX fell about 1% to 18.45.
-The yield on the 10-year Treasury dipped to 4.721%.
 
PULLBACK DATA:
-Drop from Top: 11.2%. 25.4% max (on a closing basis).
-Trading Days since Top: 441-days.
The S&P 500 is 1.2% ABOVE its 200-dMA and 3.9% 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:
I‘ll be busy all weekend so I am reporting Friday’s Summary of Indicators today, Thursday. Friday’s blog post will be Sunday night or possibly even Monday.
 
The S&P 500 Tested Tuesday’s low intra-day today and bounced higher. That’s a good sign.  There were also positive divergences between some indicators and the S&P 500 today. That, too, is a good sign that suggests a bottom.  I still haven’t seen a smoking gun that would allow me to say the bottom is in with more confidence, but if I had cash to invest, I’d increase stock holdings some.
 
As it is, I am going to remain fully invested unless the Index falls below the 200dMA; I’ll reevaluate if it does.
 
We look at a summary of indicators on Friday, but let’s do it a day early: The weekly rundown of indicators was slightly more bullish since there were 2 more bull signals (now 16-bear and 6-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 have been 5 Statistically-Significant days (big moves in price-volume) in the last 15-days. Given other signs this is bullish.
-The smoothed advancing volume on the NYSE is rising. Divergence in volume on a down day is a good sign.
-RSI.
-The Smart Money (late-day action).
-There was a New-high/New-low spread reversal on 4 October (based on std deviation of spread). The spread doesn’t have to turn positive for this indicator to be bullish, it just has to improve a lot.
-S&P 500 spread vs. Utilities (XLU-ETF) shows the Index outpacing Utilities.
 
NEUTRAL
-Sentiment.
-Bollinger Band Squeeze 28 April - expired.
-Bollinger Bands.
-Overbought/Oversold Index (Advance/Decline Ratio).
-Issues advancing on the NYSE (Breadth) compared to the S&P 500.
-10 August there was a Bullish Outside Reversal Day. Expired
-The S&P 500 is 2.1% above its 200-dMA. (Bear indicator is 12% above the 200-day.)
-The short-term, 10-day EMA, Fosback Hi-Low Logic Index.
-The long-term, 50-dEMA, Fosback Hi-Low Logic Index.
-There were Hindenburg Omen signals 11 & 12 Sept 2023 – expired. The McClellan Oscillator turned positive.
-There have been 5 up-days over the last 10 sessions.
-There have been 10 up-days over the last 20 sessions.
-My Money Trend indicator is flat.
-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.
-The Calm-before-the-Storm/Panic Indicator flashed a top warning signal 15 Sept., but it may well have been a bottom signal. But the signal is partly due to volume from Options expiration. Call it neutral.
-VIX indicator.
-There was a 90% down-volume day 21 Sept, but only 1 so far.
-XLI-ETF (Cyclical Industrials) vs the S&P 500.
-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.
-The graph of the 100-day Count (the 100-day sum of up-days).
 
BEAR SIGNS
-There 6 Distribution Days since 15 Sept.
-The 10-dMA percentage of issues advancing on the NYSE (Breadth) is below 50%.
-The 50-dMA percentage of issues advancing on the NYSE (Breadth) is below 50%
-The 100-dMA percentage of issues advancing on the NYSE (Breadth) is below 50%
-The 50-dMA percentage of issues advancing on the NYSE (Breadth) has been below 50%, for more than 3 days in a row.
-MACD of the percentage of issues advancing on the NYSE (breadth) made a bearish crossover 8 September.
-Smoothed Buying Pressure minus Selling Pressure.
-MACD of S&P 500 price made a bearish crossover 18 Sept.
-Long-term new-high/new-low data.
-Short-term new-high/new-low data.
-Slope of the 40-dMA of New-highs is falling.
-McClellan Oscillator.
-On average, the size of up-moves has been significantly smaller than the size of down-moves over the last month.
-The 5-10-20 Timer System is SELL.
-The 5-day EMA is below the 10-day EMA, so short-term momentum is bearish.
-41% of the 15-ETFs that I track have been up over the last 10-days. (45-55% is neutral.)
 
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 16 bear-signs and 6-Bull. Last week, there were 16 bear-sign and 4 bull-signs.
 
The daily spread of 20 Indicators (Bulls minus Bears) improved from -6 to -4 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations improved from -77 to -74. (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 improved to HOLD: VOLUME is bearish; SENTIMENT, PRICE & 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.)
 
I am still cautiously optimistic that the bottom of this decline will be around the 200-dMA and I suspect that we have already seen the bottom. There are indications that the bottom was Wednesday at 4230 on the S&P 500. I’ll be looking for more confirmation. If I wasn’t already fully invested, I’d be adding to stock holdings.
 
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 improved to 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.