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“Trade what you see; not what you think.” – The Old Fool,
Richard McCranie, trader extraordinaire.
“Far
more money has been lost by investors in preparing for corrections, or
anticipating corrections, than has been lost in the corrections themselves.” -
Peter Lynch, former manager of Fidelity’s Magellan® fund.
“...Development, however, requires a reliable power
source, fossil fuels. Mr. Gates’s [Bill Gates, Co-founder Microsoft] support
of green energy is a luxury of the rich while wood and charcoal continue to be
used for cooking and heating in underdeveloped countries. This has resulted in
millions of premature deaths. Abolishing fossil fuels will slow and even halt
the progress of developing countries, continuing the cycle of extreme poverty
and subsequent deaths.
We need a president who will stop the quixotic march
toward net zero. That would be a start toward a rational conversation on the
importance of fossil fuels. Mr. Gates’s support for President Biden and his
green agenda will cause more harm to underdeveloped countries than any
epidemic.” - Ken Dropek, WSJ Letters.
From...
https://www.wsj.com/articles/want-to-help-the-world-poor-junk-net-zero-cfa5928a?mod=letterstoeditor_article_pos7
“We can only hope that Steven Koonin is right
in predicting the demise of climate-change alarmism and its insidious war on
fossil-fuel energy (“The ‘Climate Crisis’ Fades Out,” op-ed, June 11). Mr.
Koonin rightly argues that “fossil fuels continue to provide about 80% of the
world’s energy,” despite decades of subsidies and mandates for renewables.
Without a scalable, cost-effective energy substitute, the
push to reach zero emissions by midcentury is nothing short of an economic
suicide pact. When the decarbonization craze eventually fades into oblivion, it
will join eugenics, the population-bomb fears, and the Y2K hysteria in the
trash bin of junk-science history.” - John
DiChiara, WSJ Letters. From...
https://www.wsj.com/articles/the-junk-science-of-the-climate-crisis-craze-power-5d40e3ed?mod=letterstoeditor_article_pos2
NEW HOME SALES / BUILDING PERMITS (CNN)
“New home sales, which make up only about 10% of the
market, fell 11.3% in May from the prior month, to 619,000, according to
government data released Wednesday. That was the steepest monthly decline since
September 2022 and marks the lowest level since November... Building permits,
seen as a bellwether of future construction, dipped 3.8%.” Story at...
https://www.cnn.com/2024/06/26/economy/us-new-home-sales-may/index.html
EIA CRUDE INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those
in the Strategic Petroleum Reserve) increased by 3.6 million barrels from the
previous week. At 460.7 million barrels, U.S. crude oil inventories are about
2% below the five year average for this time of year.” Report at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 rose about 0.2% to 5478.
-VIX declined about 2% to 12.54.
-The yield on the 10-year Treasury rose to 4.329%
(compared to this time yesterday).
MY TRADING POSITIONS:
UWM – Added 5/2/2024; SOLD 6/25/2024
QLD – Added 4/29/2024; SOLD 6/25/2024
XLK – Holding since the October 2022 lows.
DWCPF - Dow Jones U.S. Completion Total Stock Market
Index. – Added 12/7/2023 when I sold the S&P 500.
“The Dow Jones U.S. Completion Total Stock Market Index,
also known as the DWCPF, is a widely used financial index that provides a
comprehensive measure of the US equity market. The DWCPF includes all US stocks
that are not included in the Dow Jones US Total Stock Market Index, which
comprises large-cap and mid-cap companies. As a result, the DWCPF provides a
complete picture of the US stock market, including small-cap and micro-cap
companies, which are often overlooked by other indexes.” From...
https://fi.money/blog/posts/what-is-dow-jones-u-s-completion-total-stock-market-index-dwcpf
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
The Bull/Bear Spread (Bull Indicators minus Bear
Indicators) was 11 Bear-signs and 12-Bull. (The rest are neutral. It is normal
to have a lot of neutral indicators since many of those are top or bottom
indicators that will signal only at extremes.) The 10-dMA of spread (purple
line in the chart below) remained flat and that doesn’t change the apparent
rollover that started a few sessions ago.
TODAY’S COMMENT:
The Bull/Bear, 50-Indicator spread improved slightly from
-3 to +1 (1 more Bull indicator than Bear indicators). This remains a Neutral
indication.
The S&P 500 is 12.8% above the 200-dMA and that
remains stretched. The bear sign is greater than 12%.
On a more positive note, RSI returned to neutral after 5
days signaling overbought; the 10-dMA of issues advancing on the NYSE moved
above 50% today, indicating that more than half of the issues have been
advancing over the last 2-weeks; my Money Trend indicator is bullish.
I sold leveraged positions and half my Tech ETF (XLK)
yesterday. I won’t reset those positions until we see a clear sign of trend
based on indicators. I suspect the markets will retreat to the lower trend line,
around the 50-dMA at 5250. I am not confident in that prediction because we
have seen a narrow advance suggesting a 10% decline. It will be obviously important to see broadening
of markets so maybe we can set aside those larger correction worries.
LONG-TERM INDICATOR: The Long Term NTSM indicator
remained HOLD: PRICE is bullish; VOLUME, VIX & SENTIMENT is neutral.
(The Long-Term Indicator is not a good top-indicator.
It can signal BUY at a top.)
(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 am Neutral on the market as a whole. The trend in
indicators has been down recently and price has been relatively flat. The most
likely market move seems to be down, but it is not a given.
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)
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
WEDNESDAY MARKET INTERNALS
(NYSE DATA)
My basket of Market Internals remained 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 55% stocks, including stock mutual funds and ETFs. (I’ll need
to recalculate this.) I’m usually about 50% invested in stocks, so this is a
bullish, over-invested position. 75% is my max stock allocation so I have some
cash now.
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, usually by using an S&P 500 ETF as I did
back in October 2022 and 2023.
