“The odds of Joe Biden winning the 2024 presidential election in November collapsed from 4/1 (20 percent) on Thursday morning to 8/1 (11.1 percent) on Friday, following a series of gaffes from the president during media events, according to U.K.-based bookmaker Betfair... The William Hill odds on Biden not being the Democrats' 2024 presidential nominee also surged from 1/2 (66.7 percent) on Thursday to 1/3 (75 percent) on Friday morning.” Story at...
Joe Biden's Chances of Becoming President Crash After Press Conference (msn.com)
“U.S. producer prices increased slightly more than expected in June amid a rise in the cost of services, but that did not change expectations that the Federal Reserve could start cutting interest rates in September... The producer price index for final demand rose 0.2% last month... In the 12 months through June, the PPI increased 2.6%.” Story at...
https://www.reuters.com/markets/us/us-producer-prices-rise-moderately-june-2024-07-12/
My cmt: A rate cut in September is still possible.
“For the second straight month, consumer sentiment is essentially unchanged. July's reading was a statistically insignificant 2 index points below last month, well within the margin of error. Although sentiment is more than 30% above the trough from June 2022, it remains stubbornly subdued. Nearly half of consumers still object to the impact of high prices, even as they expect inflation to continue moderating in the years ahead.” Press release at...
http://www.sca.isr.umich.edu/
-Friday the S&P 500 rose about 0.6% to 5615.
-VIX declined about 4% to 12.46.
-The yield on the 10-year Treasury declined to 4.186% (compared to this time yesterday).
XLK – Holding since the October 2022 lows.
The Bull/Bear Spread (Bull Indicators minus Bear Indicators) remained a Bullish 7 Bear-signs and 18-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 also reversed up, a bull-sign.
Pullback? What pullback? The S&P 500 has closed above the wedge pattern on the chart for consecutive closes so in theory it pushes out a signal for a pullback. That doesn’t mean one won’t start Monday, but it is less likely. The Internals and indicators would agree with that assessment. The indicators are bullish. The dashed blue line on the above chart suggests the top trendline for the rising channel – that is probably the bullish extreme. That doesn’t seem impossible or the Index to get there, given the bullish action over the last two days.
-Breadth as measured by the % of stocks advancing on the NYSE remains lagging too far behind the S&P 500.
-We have seen a lot of Bearish Outside Reversals over the last month, although this signal is often wrong. (Bullish Outside Reversals are more accurate.)
-The S&P 500 is 14.2% above the 200-dMA and that remains stretched. The bear sign is greater than 12%. This is a reliable indicator, but the market can be stretched higher, so it does not always give a timely signal.
-Statistical analysis of daily moves is indicating that the daily moves have gotten too predictably small, a sign of complacency. This suggests a top within the next 20-days. The last time we saw this indicator was at the 31 July top last year. That was followed by a 10% correction. This is a very good indicator, but we don’t know what will cause a pullback to start. Possibly bad news?
(The Long-Term Indicator is not a good top-indicator. It can signal BUY at a top.)
I am still Neutral on the market. It’s hard to be bullish when there are significant issues to be resolved. A pullback is coming, but we don’t yet have a smoking gun to say it’s here. My guess now is that we’ll see a 5-7% correction. Based on history, September or before is probably all we can say about the timing for a small correction. I’ll wait for the indicators.
TODAY’S RANKING OF 15 ETFs (Ranked Daily) ETF ranking follows:
*For additional background on the ETF ranking system see NTSM Page at…
http://navigatethestockmarket.blogspot.com/p/exchange-traded-funds-etf-ranking.html
For more details, see NTSM Page at…
https://navigatethestockmarket.blogspot.com/p/a-system-for-trading-dow-30-stocks-my_8.html
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 50% stocks, including stock mutual funds and ETFs. I’m usually about 50% invested in stocks, so this is normal invested position. (75% is my max stock allocation so I have some cash now.)
