CPI ... CORE CPI ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

 

From...
Opinion: The latest political cartoons (msn.com)
 
“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
“On Friday after the markets closed rating agency, Moody’s, downgraded the U.S. to negative watch citing the potential government shutdown and political acrimony. By the way, there is nothing new in their analysis. High school civics students could have done better analysis. Historically, news like this has come around market bottoms and weakness has been a good buying opportunity. Judging by pre-market trading, the markets don’t really care about the Moody’s news as only some very mild weakness is shown.” Paul Schatz, President Heritage Capital, Monday 13 Nov.). Commentary at...
https://investfortomorrow.com/blog/bears-couldnt-even-muster-1-day-of-follow-through/
 
CPI / CORE CPI (CNBC)
“The consumer price index, which measures a broad basket of commonly used goods and services, increased 3.2% from a year ago despite being unchanged for the month, according to seasonally adjusted numbers from the Labor Department on Tuesday. Economists surveyed by Dow Jones had been looking for respective readings of 0.1% and 3.3%...Excluding volatile food and energy prices, the core CPI increased 0.2% and 4%, against the forecast of 0.3% and 4.1%.” Story at... 
https://www.cnbc.com/2023/11/14/cpi-inflation-report-october-2023.html
My cmt: Inflation came in lower than expected – what’s not to like?
 
WHAT HAPPENS IF A THIRD PARTY BLOCKS ALL CANDIDATES FROM GETTING 270 ELECTORAL VOTES?
“If no candidate receives a majority of electoral votes, the House of Representatives elects the President from the three candidates who received the most electoral votes. Each state delegation has one vote.” From...
https://www.sos.alabama.gov/sites/default/files/election-data/Electoral%20College%20FAQ.pdf
Since the House of representatives is controlled by Republicans, it is assumed that Republicans would simply elect their candidate. Probably, but it is not so clear cut.  I examined every congressional delegation and found there are 25 states with Republican majorities and 23 states with Democrat majorities. North Carolina and Michigan have split delegations with equal numbers of Republican and Democrat congressmen. Michigan voted Trump in 2016 and Biden in 2020.  North Carolina voted Trump in 2016 and 2020.
 
If any Republican states defected, they could throw the election to the Democrats. That’s not as far-fetched as it might seem since North Dakota, South Dakota and Wyoming are Republican states with only 1 Congressman. Georgia is questionable, too. Georgia has a Republican delegation, but the popular vote went to Biden in 2020.
 
Are there suspect Republican Congressmen? There were 10 Republicans of principle who voted to impeach Trump for insurrection. Only 2 remain in Congress – Dan Newhouse (WA) and David Valadao (CA) – and they are in Democrat states so their votes for or against Trump will make no difference.
 
The wildcard question is: Would delegations of states that voted for the independent candidate vote for that Independent or simply vote their party? My discouraging answer is that our Congress is made up of a bunch of self-serving bastards who will vote their party. As it stands now, Trump would be the likely victor if the election were to be decided by the House of Representatives.
 
We can always hope that Biden and Trump are not the candidates in the 2024 presidential election.
 
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 rose about 1.9% to 4496.
-VIX fell about 4% to 14.10.
-The yield on the 10-year Treasury dipped to 4.453%.
 
PULLBACK DATA:
-Drop from Top: 6%. 25.4% max (on a closing basis).
-Trading Days since All-Time Top: 469-days. (The top was 3 January 2022.)
The S&P 500 is 5.8% ABOVE its 200-dMA and 3.9% ABOVE 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 (25% decline) 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:
The 100-dMA of Breadth bounced above 50% today and that’s a good sign. Today was a 90% up-volume day.  That’s another bullish sign that would further confirm the rally. From an indicator viewpoint, it doesn’t matter: there were two, back-to-back, high up-volume days (80%+) within 5-days of the 27 October bottom.  That was a very bullish sign.  Add in the Zweig Breadth Thrust we saw 5-days after that bottom and we must conclude (as I have been saying for a while) the bottom is in. Now, many investors are deciding the same thing. “Looking good Billy Ray! Feeling good Lewis!”
 
The daily spread of 20 Indicators (Bulls minus Bears) improved from +6 to +11 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations improved from +59 to +78. (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 BUY: PRICE, & VOLUME are bullish; VIX & SENTIMENT are neutral.
(The important major BUY in this indicator was on 21 October 2022, 7-days after the bear-market 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
I remain bullish.
 
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 Internals 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.