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“Supporting Ukraine degrades the Russian military, impedes Putin's expansionism, and is a deterrent to a Chinese invasion of Taiwan without putting American soldiers in harm's way.” - Michael Ramirez. Political commentary at...
https://michaelramirez.substack.com/p/michael-ramirez-essay-americas-new?r=ntzh3&utm_campaign=post&utm_medium=web
 
“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
PCE PRICES / PERSONAL INCOME / SPENDING  (Yahoo Finance)
“The Federal Reserve's preferred inflation metric showed prices continued to cool in September — a critical data point the Federal Reserve will consider as it weighs its next interest rate decision on Nov. 1. The Personal Consumption Expenditures (PCE) Index grew 3.4% year over year in September, in line with August's revised increase and meeting analyst expectations... Personal spending increased 0.7%, outweighing personal income, which rose 0.3%.” Story at...
https://finance.yahoo.com/news/feds-preferred-inflation-gauge-shows-further-signs-of-price-increases-cooling-135443531.html
 
WATCH HERE FOR A SELL SIGNAL (Markets Insider via msn.com)
“The S&P 500 is on the verge of a technical breakdown, but Fairlead Strategies' founder Katie Stockton says don't sell stocks just yet. That's because oversold extremes are flashing for certain indicators, suggesting that a rebound could be imminent...Stockton is closely watching the support range of 4,180 to 4,195 on the S&P 500. A decisive breakdown below 4,180, typically marked by two consecutive weekly closes below that level, would be the signal to Stockton that the current risk-off nature of the stock market is set to extend and drive stock prices even lower.” Story at...
The S&P 500 is on the verge of a technical breakdown. Here's the sell signal to watch for. (msn.com)
My cmt: We closed lower than 4180 this week, so we’ll need to see what happens by the end of next week
 
MARKET REPORT / ANALYSIS
-Friday the S&P 500 fell 0.5% to 4117.
-VIX rose about 3% to 21.27.
-The yield on the 10-year Treasury was nearly unchanged at 4.845%.
 
PULLBACK DATA:
-Drop from Top: 14.2%. 25.4% max (on a closing basis).
-Trading Days since Top: 457-days.
The S&P 500 is 2.9% BELOW its 200-dMA and 5.6% BELOW its 50-dMA.
*I won’t call the correction over until the S&P 500 makes a new-high; however, evidence suggests the major bear-market 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:
Buying Pressure minus Selling Pressure has been trending higher since the 3 October low while the S&P 500 has been trending down.  This is the kind of bullish divergence that is suggesting that the recent downturn is nearly over. Both breadth and new-high, new-low data are in the zone where reversals have occurred in the past, but I have not yet seen any of those data points turn up.
 
Both Bollinger Bands and RSI signaled oversold today and that is a decent Bottom Signal, so perhaps we’ll see a reversal Monday or Tuesday. Usually, investors brood over the weekend after a down-period like we’ve seen recently and sell on Monday. This can lead to more seasoned investors starting to buy, creating turning-Tuesday.  Will we see it this time? We’ll see.
 
We look at a summary of indicators on Friday. (These indicators tend to be both long-term and short-term, so they are different than the 20 that I report on daily.) The weekly rundown of indicators remained to the Bear side this week, now 19-bear and 3-bull, but we did see some bottom indicators pop up.
 
BULL SIGNS
-Bollinger Bands – oversold.
-RSI – oversold.
-MACD of the percentage of issues advancing on the NYSE (breadth) made a bullish crossover 12 October.
 
NEUTRAL
-There have been 4 Distribution Days since the last Follow-thru day.
-There have been 4 Statistically-Significant days (big moves in price-volume) in the last 15-days.
-Sentiment.
-Bollinger Band Squeeze 28 April - expired.
-Overbought/Oversold Index (Advance/Decline Ratio).
-Issues advancing on the NYSE (Breadth) compared to the S&P 500.
-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. - Expired
-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 2.9% below its 200-dMA. (Bull indicator is 12% below 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 2 up-days over the last 10 sessions.
-There have been 8 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
-On average, the size of up-moves has been smaller than the size of down-moves over the -There was a 90% down-volume day 21 Sept.
-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.
last month, but not enough to send a signal.
-The Smart Money (late-day action).
 
BEAR SIGNS
-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.
-Smoothed Buying Pressure minus Selling Pressure.
-MACD of S&P 500 price made a bearish crossover 20 Oct.
-My Money Trend indicator is declining.
-Short-term new-high/new-low data.
-Long-term new-high/new-low data.
-Slope of the 40-dMA of New-highs is falling.
-The graph of the 100-day Count (the 100-day sum of up-days).
-McClellan Oscillator.
-VIX indicator.
-XLI-ETF (Cyclical Industrials) vs the S&P 500.
-The 5-10-20 Timer System is SELL.
-The 5-day EMA is below the 10-day EMA, so short-term momentum is bearish.
-34% of the 15-ETFs that I track have been up over the last 10-days. (45-55% is neutral.)
-S&P 500 spread vs. Utilities (XLU-ETF) shows Utilities outpacing the Index.
 
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 19 bear-signs and 3-Bull. Last week, there were 18 bear-sign and 2 bull-signs.
 
Volume was down Friday (always a good sign in a downturn), but internals were poor so there was no buy signal.
 
The daily spread of 20 Indicators (Bulls minus Bears) remained -9 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations declined from -52 to -55. (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 SELL: VOLUME & VIX are bearish; PRICE & SENTIMENT are neutral. I may be following this indicator soon; but not yet. I am still watching price action around the 200-dMA. It appears that the S&P 500 is close to a bottom.
 
(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
We could still see more selling before this downturn winds down, but my guess is that a bottom is near. Still, I’m way over invested.  If this downturn continues after Tuesday, I’ll cut some stock holdings in the leverage ETFs I own next week.
 
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 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.