Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...
“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
“Trump chief of staff Mark Meadows is granted immunity
while other Trump associates plead guilty.” — Michael Ramirez. Political
commentary at...
https://michaelpramirez.com/index.html
"I call them the 'J-6 hostages,' not prisoners. I
call them the hostages, what’s happened? And it’s a shame." - Donald Trump, at his campaign rally
Thursday, referred to January 6 rioters as “hostages.” My guess is that he will pardon them if he is
elected President. Trump’s actions since November of 2020 have been dishonest, disgraceful
and seditious.
“Conservative former federal Judge Michael Luttig warned
on Friday's edition of MSNBC's "Deadline: White House" that former
President Donald Trump is an ongoing threat to the constitutional order, and
reiterated that he must be barred from returning to office.” From...
'Imminent
danger to America': Conservative judge says Constitution must disqualify Trump
(msn.com)
The 14th Amendment of the United States Constitution
states:
Section 3.
“No person shall be a Senator or Representative in
Congress, or elector of President and Vice President, or hold any office, civil
or military, under the United States, or under any state, who, having
previously taken an oath, as a member of Congress, or as an officer of the
United States, or as a member of any state legislature, or as an executive or
judicial officer of any state, to support the Constitution of the United
States, shall have engaged in insurrection or rebellion against the same, or
given aid or comfort to the enemies thereof. But Congress may by a vote of
two-thirds of each House, remove such disability.”
My cmt: Trump’s attorneys are arguing that Trump, as
President, was not an “officer of the United States.” Of course, the main issue
is, did Trump engage in “insurrection or rebellion?” Another issue - the clause
doesn’t require a conviction, but that doesn’t mean that another part of the
constitution might be interpreted otherwise. The final report of the January 6
House Committee recommended disqualifying Trump from holding office based on
the 14th Amendment. I suspect that Colorado will disqualify Trump and we should
have a ruling this month. Whether that
holds up on appeal is the big unknown.
“While we will keep an open mind, the move thus far looks
more like a bear market rally rather than the start of a sustained upswing,
particularly in light of weaker earnings revisions and macro data.” – Mike
Wilson, Morgan Stanley client note.
MARKET REPORT / ANALYSIS
-Monday the S&P 500 rose about 0.2% to 4366.
-VIX fell about 0.1% to 14.89.
-The yield on the 10-year Treasury rose to 4.637%.
PULLBACK DATA:
-Drop from Top: 9%. 25.4% max (on a closing basis).
-Trading Days since Top: 463-days.
The S&P 500 is 2.7% ABOVE its 200-dMA and 0.4%
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:
Amazing to see the S&P 500 has made 6 straight
up-days. Surely, we’ll see a down day Tuesday, but it isn’t a given – only 10
of the last 20-days and 7 of the last 10-days have been up days. That’s
elevated, but not a sell sign.
While I don’t agree with Mike Wilson’s view (above) he
could be right. We should remember that Mike Wilson didn’t believe in the October
2021 bottom either, so apparently, he expects the S&P 500 to trade back to
October lows and/or lower since he is calling the current rally a bear market
rally. If we are in a scenario like 1998-2000 we could see some real trouble
ahead. There was a 20% decline in late summer of 1998, but then markets powered
higher to a blow-off top in March of 2000. Since we made a bottom in the fall
of 2021, we might expect a high early in 2024. I’m not buying it though. So
far, we haven’t seen much “irrational exuberance,” so I am not expecting the
crash Mr. Wilson is predicting (or even another pullback soon) unless we see
some big gains and extreme PE levels. The other “if” is the economy. Most of
the bears are betting on a recession – could be, but so far signs are muted.
The Index has broken the down trend, or not, depending on
the scales used to draw the charts. That’s one reason I like to use the 50-dMA
as a proxy for the trend line. Given that view, it is very bullish that the
S&P 500 closed above its 50-dMA again today.
The Friday summary of indicators was also a bullish 4 bear
and 18-Bull signs.
I’ll stand by my
earlier comment: Indicators are confirming what we have suspected for a week –
correction over The bottom WAS Friday 8 days ago.
The daily spread of 20 Indicators (Bulls minus Bears) improved
from +11 to +13 (a positive number is bullish; negatives are bearish); the
10-day smoothed sum that smooths the daily fluctuations improved from -44
to -19. (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 & SENTIMENT are bullish; VIX is 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
Short-term correction over – I’m bullish. The markets are
going higher. Can we make new all time highs and end the Bear Market that is still hanging around since October of
2021? I think so, but we’ll see.
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
MONDAY MARKET INTERNALS (NYSE
DATA)
My basket of Market Internals remained 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.
