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

“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.
 
“Monday was a market earthquake. It is over, but there will likely be aftershocks in the coming weeks and months. I haven’t done the work yet, but this has the feel of October 1997 and August 1998. Many of my indicators and models are pointing to all-time highs later this year which is not a popular view now. I am thankful.” – Paul Schatz, President, Heritage Capital. Commentary at...
https://investfortomorrow.com/blog/monday-was-an-earthquake-aftershocks-coming-then-all-time-highs/
 
MARKET REPORT / ANALYSIS
-Friday the S&P 500 rose about 0.5% to 5344.
-VIX fell about 14% to 20.23. 
-The yield on the 10-year Treasury rose to 3.942% (compared to this time, prior trading day).
 
MY TRADING POSITIONS:
XLK – Holding since the October 2022 lows.
XLK – added more 8/9 & 7/26. 
UWM – added 7/15.
QLD – added 7/24.
DWCPF - Dow Jones U.S. Completion Total Stock Market (TSM) Index, a broad market index made up of stocks of U.S. companies not included in the S&P 500 Index. – Added 7/29/2024
 
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
The Bull/Bear Spread count was 14 Bear-signs and 7-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 Bull/Bear, 50-Indicator spread (Bull Indicators minus Bear Indicators) improved from -10 to -7 (7 more Bear indicators than Bull indicators). The 10-dMA declined slightly, but is still suggesting a bounce higher may be coming soon.
 
TODAY’S COMMENT:
I bought more Technology ETF (XLK) today. We got a buy signal 7 August that was confirmed Thursday and again today and I moved to my max stock position.
 
Tom Lee was on CNBC and he called for a 50% gain in small caps between now and the ened of the year. He also noted that the market trouble was over for now and that if we didn’t see a return to selling at the end of August, it would be clear sailing into the new year.
 
LONG-TERM INDICATOR: The Long Term NTSM indicator remained SELL: VOLUME & VIX are bearish; SENTIMENT & PRICE are neutral.
This indicator can be late – now is the time to buy not sell.
 
{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 2022 (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 the 2022 bear market, based on the bearish “Summary of 50” indicator.}
 
BOTTOM LINE
I’m bullish, 75% invested in stocks – I’m maxed out.
 
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
 
Utilities are leading momentum due to the flight-to-safety trade.  I think Technology (XLK) is probably the best ETF to own now based on recent price action.
 
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
 
FRIDAY 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 75% stocks, including stock mutual funds and ETFs. I’m usually about 50% invested in stocks when markets are stretched; my current stock position is above the norm. (75% is my max stock allocation when I am strongly bullish.)
 
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.