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

“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.
 
“The irony being that all marginalized people live better today because of Western ideals, not in spite of them...Individual liberty, scientific inquiry, rule of law, religious freedom, women's rights, human rights, democracy, trial by jury, freedom of speech...since one can find all these concepts in today's Israel and virtually nowhere else in the Middle East, if anything, the world would be a better place if it had more Israels." - Bill Maher, American comedian, writer, producer, political commentator, actor, and television host. 
 
“...we discussed NBC’s bizarre comparison of Hunter Biden’s multimillion dollar alleged influence peddling to Nikki Haley’s daughter’s use of TikTok. The comparison was made to hit Florida Gov. Ron DeSantis. That target is notable due to another equally bizarre “fact check” by the network where the company suggested that DeSantis half lied when he claimed to have arranged the removal of hundreds of American citizens from Israel. The network said it was only “half true” because someone else flew the planes, DeSantis only supplied the money. I kid you not... NBC could also now presumably tackle more aspirational flight claims like the many bumper stickers claiming that “Jesus is my co-pilot.” Not only are the cars not capable of prolonged flight, but Jesus is not even licensed in any state to operate a motor vehicle.” – Jonathan Turley. Turley, Shapiro Chair for Public Interest Law at The George Washington University Law School. Commentary at...
https://jonathanturley.org/2023/11/12/flight-risk-nbc-warns-viewers-that-desantis-did-not-personally-fly-back-americans-from-israel/#more-211851
 
MARKET REPORT / ANALYSIS
-Monday the S&P 500 slipped about 0.1% to 4412.
-VIX rose about 4% to 14.76.
-The yield on the 10-year Treasury dipped to 4.638%.
 
PULLBACK DATA:
-Drop from Top: 7.9%. 25.4% max (on a closing basis).
-Trading Days since All-Time Top: 468-days. (The top was 3 January 2022.)
The S&P 500 is 3.6% ABOVE its 200-dMA and 1.7% 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:
I was doing some reading over the weekend and noticed a reference that there had been a Zweig Breadth Thrust on 3 November. My Long Term Indicator was already BUY, but the Breadth Thrust reinforces the buy-signal. I checked my system and found an error in the Exponential Moving Average (EMA) calculation that slightly under reported EMA Breadth on 3 November. I fixed that issue and can confirm that a Zweig Breadth Thrust was completed on 3 November.
 
“The Breadth Thrust Indicator is a technical indicator used to ascertain market momentum. It is computed by calculating the number of advancing issues on an exchange, such as the New York Stock Exchange (NYSE), divided by the total number of issues (advancing + declining) on it, and generating a 10-day moving average of this percentage. The indicator signals the start of a potential new bull market when it moves from a level of below 40% (indicating an oversold market) to a level above 61.5% within any 10-day period. This is a rarely occurring sentiment, which carries tremendous import with market watchers... Zweig furthermore highlights the fact that the majority of bull markets begin with a Breadth Thrust.” From
https://www.investopedia.com/terms/b/breadth-thrust-indicator.asp
 
The chart below has question marks on 3 November because it was published before the close. Closing data did confirm the Breadth Thrust and it became the 18^th Breadth Thrust since WWII. As the chart shows, the record is very good after a Breadth Thrust with significant gains 1 year later.  That’s a major reason that the markets have jumped higher since then. The Zweig Breadth Thrust is well known among market technicians.
 

That adds a bullish indicator and changes last Friday’s summary of indicators to 19-Bull and 6-Bear – a very bullish report; but despite the Breadth Thrust, some measures of breadth remain weak.
 
Longer term Breadth numbers (% of issues advancing on the NYSE over the past 50 and 100-days) remain weaker than we’d like and those need to improve before I’ll feel confident about new-all-time highs.
 
Overall though, Indicators are confirming what we have suspected – correction over; the bottom was Friday 27 October.
 
The daily spread of 20 Indicators (Bulls minus Bears) remained from +6 (a positive number is bullish; negatives are bearish); the 10-day smoothed sum that smooths the daily fluctuations improved from +46 to +59. (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 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

MONDAY MARKET INTERNALS (NYSE DATA)

My basket of Market Internals slipped 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.