Michigan Sentiment ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

 
“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
“From the river to the sea, Palestine will be free!” chant the useful idiots at elite institutions and parades in the West. Who are these people? Atheists who support theocratic lunatics, democrats who endorse medieval tyrants, feminists who defend misogynists who parade with the desecrated corpses of women, gays who defend maniacs who would joyfully hang them or toss them off the roof of a tall building. They talk of a secular, democratic and socialist Palestine. As George Orwell observed: “One has to belong to the intelligentsia to believe things like that: no ordinary man could be such a fool.” But the world has now seen what “from the river to the sea” actually means. It is nothing less than a remake of the Nazi Einsatzgruppen.” – WSJ Opinion at...
https://www.wsj.com/articles/the-moral-duty-to-destroy-hamas-ba626a41
 
UNIV OF MICHIGAN SENTIMENT (Univ of Michigan)
“Consumer sentiment fell back about 7% this October following two consecutive months of very little change. Assessments of personal finances declined about 15%, primarily on a substantial increase in concerns over inflation, and one-year expected business conditions plunged about 19%. However, long-run expected business conditions are little changed, suggesting that consumers believe the current worsening in economic conditions will not persist. Nearly all demographic groups posted setbacks in sentiment, reflecting the continued weight of high prices.” Press release at...
http://www.sca.isr.umich.edu/
 
MARKET REPORT / ANALYSIS
-Friday the S&P 500 declined about 0.5% to 4328.
-VIX rose about 16% to 19.32.
-The yield on the 10-year Treasury declined to 4.617%.
 
PULLBACK DATA:
-Drop from Top: 9.8%. 25.4% max (on a closing basis).
-Trading Days since Top: 447-days.
The S&P 500 is 2.5% ABOVE its 200-dMA and 1.7% 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:
It looks like we may have an issue in the stock market with technicals vs Geo-Political news. The War in Israel is a stressor for the markets and may be the cause of some flight to safety. A number of unknowns exist regarding whether the war might expand. Watch Monday – if it is an up-day, it will suggest investors remain sanguine.  If it’s down, it may suggest that investors were worried about it over the weekend and woke up Monday in a mood to sell.
 
We look at a summary of indicators on Friday: The weekly rundown of indicators was more bullish this week, but nearly neutral (now 10-bear and 9-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
-MACD of the percentage of issues advancing on the NYSE (breadth) made a bullish crossover 12 October.
-Smoothed Buying Pressure minus Selling Pressure.
-MACD of S&P 500 price made a bullish crossover 9 Oct.
-My Money Trend indicator is advancing.
-Slope of the 40-dMA of New-highs is rising.
-The graph of the 100-day Count (the 100-day sum of up-days).
-The Smart Money (late-day action).
-The 5-day EMA is below the 10-day EMA, so short-term momentum is bullish.
-S&P 500 spread vs. Utilities (XLU-ETF) shows the Index outpacing Utilities.
 
NEUTRAL
-There has been 1 Distribution Days since the last Follow-thru day.
-There have been 3 Statistically-Significant days (big moves in price-volume) in the last 15-days.
-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.
-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. - Expired
-The S&P 500 is 2.5% 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 6 up-days over the last 10 sessions.
-There have been 10 up-days over the last 20 sessions.
-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. - Expired
-VIX indicator.
-There was a 90% down-volume day 21 Sept, but only 1 so far, recently.
-RSI.
-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.
-On average, the size of up-moves has been smaller than the size of down-moves over the last month, but not enough to send a signal.
-55% of the 15-ETFs that I track have been up over the last 10-days. (45-55% is neutral.)
 
BEAR SIGNS
-12 October there was a Bearish Outside Reversal Day. I’ll keep this in effect for 5 days and until the McClellan Oscillator turns bullish.
-The smoothed advancing volume on the NYSE is falling.
-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.
-Short-term new-high/new-low data.
-Long-term new-high/new-low data.
-McClellan Oscillator.
-The 5-10-20 Timer System is SELL.
 
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 10 bear-signs and 9-Bull. Last week, there were 16 bear-sign and 6 bull-signs.
 
I still think the correction is over, but we’re still waiting to see if the Index can break above its 50-dMA. The Geo-Political situation is a worry and we need to watch the markets to gauge their reaction.
 
The daily spread of 20 Indicators (Bulls minus Bears) declined from zero to -6 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations improved from -22 to -20. (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, 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 and I think we got confirmation on 9 & 10 October.
 
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 declined to 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.