Navigate the Stock Market: September 2024

Monday, September 30, 2024

Chicago FED PMI ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis

“Gold has been the quiet bull market story all year. In interviews and here I have speculated that China has been the primary driver and strong bid beneath the market as they prepare for war, economic or military. When a country knows war is coming, they sell assets in the currency of their enemy. There is also fuel from the perception that the Fed is going to cut interest rates faster than any other major central bank which puts the U.S. dollar in harm’s way.” – Paul Schatz, President Heritage Capital. Blog at...
https://investfortomorrow.com/blog/weakest-week-of-the-year-phooey/

“The drop in the number of publicly traded U.S. companies is continuing. I last reported on that here back in April. Since then, the losses in the Nasdaq have leveled off just a little bit, but the NYSE continues to lose listed issues... By the time that the Nasdaq Composite Index peaked in March 2000, the number of Nasdaq traded issues had already fallen by 17%. The foundations were crumbling for a long time before the final top came.
Now in September 2024, the number of Nasdaq traded issues is down 16% from the 2022 high. And thus far, the major averages are not showing any sign of any liquidity problems. Neither are the breadth statistics, with the NYSE A-D Line at a new all-time high. I believe that the drying up of all the Covid money is going to matter at some point. I cannot demonstrate that we are at that point just yet. But we are on the way.” - Tom McClellan
Editor, The McClellan Market Report

CHICAGO FED PMI (msn)
“The September Chicago PMI edged up, but stayed in contraction territory. PMI rose to 46.6 compared to the forecasted 46.1 level.” Story at...
https://www.msn.com/en-us/money/markets/stock-index-futures-tick-down-ahead-of-chicago-pmi/ar-AA1rsBpP?ocid=finance-verthp-feeds

MARKET REPORT / ANALYSIS
-Monday the S&P 500 rose about 0.4% to 5762.
-VIX declined about 1% to 16.73.
-The yield on the 10-year Treasury rose to 3.787% (compared to about this time, prior trading day).

MY TRADING POSITIONS:
XLK – Holding since the October 2022 lows. Added more 9/20.
UWM – added 7/15 & more 9/20.
QLD – added 7/24.
SSO – added 9/16.
SPY – added 9/19 & more 9/20

CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
The Bull/Bear Spread remained in a BULL position at 6 Bear-sign and 15-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) declined to +9 (9 more Bull indicators than Bear indicators). The 10-dMA is sloping upward, remaining bullish.

TODAY’S COMMENT:
It was nice to see the S&P 500 finish higher Monday. I was beginning to get concerned that the Index hadn’t made much advance in the last 2 weeks and, to reflect that concern, I added a rising wedge pattern to the chart in red. This is a bearish pattern since it is showing that the Index is struggling to move higher. That pattern will be overcome if the Index does continue up. (Fair warning: I am not a great chartist.)

I almost took profits in QLD today since the 10-dMA of indicators is falling. I looked at the market around 2pm and it seemed that panic was underway so I didn’t sell. I don’t like selling into panics. It wasn’t a real panic, but there seem to be Bots on Wall St. that trigger selling based on the news. The news was that Fed Chair Powell commented that future rate cuts would be smaller. I figured markets would bounce back and that was the case. It is really no surprise that the Fed may move slower in the future. So what? That was expected.

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)

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 HOLD. (My basket of Market Internals is a decent trend-following analysis that is most useful when it diverges 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. (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 bullish signs, 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.

Friday, September 27, 2024

PCE ... Durable Goods ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

Political commentary from Michael Ramirez at...
https://michaelpramirez.com/index.html

“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.

PCE PRICES (CNBC)
“The personal consumption expenditures price index, a gauge the Fed focuses on to measure the cost of goods and services in the U.S. economy, rose 0.1% for the month, putting the 12-month inflation rate at 2.2%, down from 2.5% in July and the lowest since February 2021.” Story at...
https://www.cnbc.com/2024/09/27/pce-inflation-august-2024.html

MARKET REPORT / ANALYSIS
-Friday the S&P 500 slipped about 0.1% to 5738.
-VIX rose about 10% to 16.96.
-The yield on the 10-year Treasury declined to 3.751% (compared to about this time, prior trading day).

MY TRADING POSITIONS:
XLK – Holding since the October 2022 lows. Added more 9/20.
UWM – added 7/15 & more 9/20.
QLD – added 7/24.
SSO – added 9/16.
SPY – added 9/19 & more 9/20

CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
The Bull/Bear Spread remained in a BULL position at 4 Bear-sign and 16-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 to +12 (12 more Bull indicators than Bear indicators). The 10-dMA is sloping upward, remaining bullish.

TODAY’S COMMENT:
PCE (Personal Consumption Expenditure) came in better than expected. Advancers outpaced decliners by a lot; advancing-volume was more than twice declining-volume; there were 228 new-highs and only 5 new-lows. The S&P 500 was down; VIX was up? What am I missing?

Only one of my Top Indicators, a subset of indicators, is giving a top signal. That is RSI. Relative Strength measures the size of up-moves vs. all-moves on a 14-day moving average basis and presents the result as a percentile. For example; if the RSI is 85, it means that the size of up-moves are in the 85th percentile when compared to all moves over the 14-day period. If ALL moves had been up, RSI would be 100 – a definite short term sell indicator. For my purposes, 30 is oversold (suggesting a turn-around to the upside) and 80 is overbought. If the up-moves and down-moves are equal in size over the 14-day period, RSI would be 50.

Friday, RSI was 87, an overbought signal. I use this indicator with Bollinger Bands. They are elevated, but not yet overbought, so that’s good news for the bulls. No top yet.

Indicators improved handily and that’s a good sign too.

BOTTOM LINE
I remain bullish.

ETF - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily) ETF ranking follows:

My basket of Market Internals remained HOLD. (My basket of Market Internals is a decent trend-following analysis that is most useful when it diverges from the Index.)

Thursday, September 26, 2024

GDP ... Jobless Claims ... Durable Goods ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

The Bull/Bear, 50-Indicator spread (Bull Indicators minus Bear Indicators) slipped to +7 (7 more Bull indicators than Bear indicators). The 10-dMA is sloping upward, remaining bullish.

TODAY’S COMMENT:
Once more with feeling...tomorrow the PCE is announced, the Fed’s favorite inflation data. Data dependent? Let’s see what the data shows.

The Advance /Decline ratio had been overbought for the last week. Today it moved to a neutral indication, but other indicators stepped into the bearish role. RSI (Relative Strength Indicator) is overbought – not to worry, Bollinger Bands are not. New-high/New-low numbers are getting too bullish and that’s a bearish sign. All in all though, these are issues to watch, but the indicators remain on the bullish side so I am not too worried.

BOTTOM LINE
I am bullish.

ETF - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily) ETF ranking follows:

My basket of Market Internals slipped to HOLD. (My basket of Market Internals is a decent trend-following analysis that is most useful when it diverges from the Index.)

Wednesday, September 25, 2024

New Home Sales ... Crude Inventories ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

The Bull/Bear, 50-Indicator spread (Bull Indicators minus Bear Indicators) slipped to +8 (8 more Bull indicators than Bear indicators). The 10-dMA is sloping upward, remaining bullish.

TODAY’S COMMENT:
The Advance/Decline Ratio remains overbought, so we could easily see another pause in the S&P 500 advance. This tends to be a very short-term signal so it is not a signal to worry about. Overall, indicators look good even though the number of bullish indicators was down Wednesday.

BOTTOM LINE
I am bullish.

ETF - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily) ETF ranking follows:

My basket of Market Internals remained BUY. (My basket of Market Internals is a decent trend-following analysis that is most useful when it diverges from the Index.)

Tuesday, September 24, 2024

Consumer Confidence ... Richmond FED Manufacturing ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

From...
https://www.forexlive.com/news/richmond-fed-composite-index-for-september-18-vs-13-estimate-20240924/

MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 rose about 0.3% to 5733.
-VIX declined about 3% to 15.39.
-The yield on the 10-year Treasury slipped to 3.732% (compared to about this time, prior trading day).

MY TRADING POSITIONS:
XLK – Holding since the October 2022 lows. Added more 9/20.
UWM – added 7/15 & more 9/20.
QLD – added 7/24.
SSO – added 9/16.
SPY – added 9/19 & more 9/20

CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
The Bull/Bear Spread remained in a BULL position at 2 Bear-sign and 20-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) remained +18 (18 more Bull indicators than Bear indicators). The 10-dMA is sloping upward, remaining bullish.

TODAY’S COMMENT:
Today the S&P 50 made another new all-time high. 9% of all issues on the NYSE made new 52-week, new-highs. That’s a good number since the average of new-highs at an all-time high is about 7%. This demonstrates a broad advance with healthy breadth. It suggests that if there was a correction (and I’m not predicting one), it is likely to be less than 10%.

Same as yesterday: The Advance/Decline Ratio remains overbought. This tends to be a very short-term signal. 8 out of the last 10 days have been up-days. We may expect a down-day tomorrow – markets don’t go up in a straight line; but that wasn’t true Tuesday. Will Wednesday continue higher? The odds are against it, but as I often point out, Mr. Market doesn’t pay attention to my blog. As the Short-sellers like to say, “The Markets can remain overbought longer than you can remain solvent.”

BOTTOM LINE
I am bullish.

ETF - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily) ETF ranking follows:

My basket of Market Internals remained BUY. (My basket of Market Internals is a decent trend-following analysis that is most useful when it diverges from the Index.)

Monday, September 23, 2024

... 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.

I always wondered...
HOW PEDIATRICIANS CREATED THE PEANUT ALLERY EPIDEMIC (WSJ)
“The American Academy of Pediatrics (AAP) wanted to respond to public concern by telling parents what they should do to protect their kids from peanut allergies. There was just one problem: Doctors didn’t actually know what precautions, if any, parents should take. Rather than admit that, in the year 2000 the AAP issued a recommendation for children 0 to 3 years old and pregnant and lactating mothers to avoid all peanuts...
...[Dr. Gideon Lack, a pediatric allergist and immunologist in London] was giving a lecture in Israel on allergies and asked the roughly 200 pediatricians in the audience, “How many of you are seeing kids with a peanut allergy?” Only two or three raised their hands. Back in London, nearly every pediatrician had raised their hand to the same question.
Startled by the discrepancy, he had a eureka moment. Many Israeli infants are fed a peanut-based food called Bamba. To Lack, this was no coincidence, and he quickly assembled researchers in Tel Aviv and Jerusalem to launch a formal study. It found that Jewish children in Israel had one-tenth the rate of peanut allergies compared with Jewish children in the U.K., suggesting that genetic predisposition was not responsible, as the medical establishment had assumed.
Lack and his Israeli colleagues titled their paper “Early Consumption of Peanuts in Infancy Is Associated with a Low Prevalence of Peanut Allergy.” – Mary Markary, surgeon and public health researcher at Johns Hopkins University. Commentary at...
https://www.wsj.com/health/how-pediatricians-created-the-peanut-allergy-epidemic-952831c4
Dr. Markary has a book out, “Blind Spots: When Medicine Gets It Wrong, and What It Means for Our Health.”

CONTRARY TO THE MEDIA MYTH, U.S. URBAN CRIME RATES ARE UP (WSJ)
“The new findings were released this month by the National Crime Victimization Survey. Run by the Bureau of Justice Statistics and administered by the Census Bureau, the NCVS dates to the Nixon administration and is one of the largest federal surveys on any topic. It asks some 230,000 U.S. residents annually whether they’ve been the victims of crimes. It then asks about the nature of the crime, whether it was reported to the police, the demographics of the perpetrator and other particulars.
The NCVS report for 2023 finds no statistically significant evidence that violent crime or property crime is dropping in America. Excluding simple assault—the type of violent crime least likely to be charged as a felony—the violent crime rate in 2023 was 19% higher than in 2019, the last year before the defund-the-police movement swept the country.” Commentary at...
https://www.wsj.com/opinion/contrary-to-media-myth-u-s-urban-crime-rates-are-up-violence-cities-9ce714f6?mod=opinion_lead_pos6
My cmt: So ABC’s “Fact Check” during the Presidential debate was incorrect. Crime Rates are up, suggesting that ABC is not only biased, but incompetent.

“The House on Friday voted, 215-191, to overturn the Environmental Protection Agency’s vehicle emissions rule, with eight Democrats joining Republicans. Kamala Harris says she doesn’t support an electric vehicle mandate, but that’s what the Biden EPA rule effectively is.” – Editorial Board, WSJ at...
https://www.wsj.com/opinion/democrats-join-house-republicans-vote-against-vehicle-emissions-rule-epa-electric-vehicles-31379282?mod=editorials_article_pos5
My cmt: I commented against these rules, but my experience has been that when an agency proposes a rule, the cake is already baked. Negative comments, even those by industry professionals, have little effect. That is why the Supreme Court’s ruling that rolls back the Chevron Decision is so important. It will appropriately reduce Executive Branch power. My feeling has always been that a decision to ban internal combustion engines (ICE in the vernacular) is beyond the power of the Executive Branch. This should be a decision to be made by the Congress, elected officials who are representatives of the people, never the Executive.

MARKET REPORT / ANALYSIS
-Monday the S&P 500 rose about 0.3% to 5703.
-VIX declined about 2% to 15.89.
-The yield on the 10-year Treasury rose to 3.751% (compared to about this time, prior trading day).

MY TRADING POSITIONS:
XLK – Holding since the October 2022 lows. Added more 9/20.
UWM – added 7/15 & more 9/20.
QLD – added 7/24.
SSO – added 9/16.
SPY – added 9/19 & more 9/20

CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
The Bull/Bear Spread remained in a BULL position at 2 Bear-sign and 20-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) decreased to +18 (18 more Bull indicators than Bear indicators). The 10-dMA is sloping upward, remaining bullish.

TODAY’S COMMENT:
Last week (19 September) the S&P 50 made a new all-time high. 14.8% of all issues on the NYSE made new 52-week, new-highs. That’s a very good number since the average of new-highs at an all-time high is only about 7%. This demonstrates a broad advance with healthy breadth, ~~buy~~ but the number can be misleading at times. For example, at the top of the recent 10% correction in July, nearly 15% of issues on the NYSE also made new, 52-week highs. This time is different, though. The July top had been preceded by poor breadth on a number of new all-time highs. In those instances, only 2 to 5% of issues on the NYSE were making new-highs when the S&P 500 made a new, all-time high and that signaled trouble for the markets. So far, markets appear to be in good shape.

The Advance/Decline Ratio is again overbought. This tends to be a very short-term signal. 8 out of the last 10 days have been up-days. We may expect a down-day tomorrow – markets don’t go up in a straight line.

BOTTOM LINE
I am bullish.

ETF - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily) ETF ranking follows:

DOW STOCKS - TODAY’S MOMENTUM RANKING OF THE DOW 30 STOCKS (Ranked Daily)

MONDAY MARKET INTERNALS (NYSE DATA)

My basket of Market Internals remained BUY. (My basket of Market Internals is a decent trend-following analysis that is most useful when it diverges from the Index.)

Friday, September 20, 2024

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

Political commentary from Michael Ramirez at...
https://michaelpramirez.com/index.html

“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.

MARKET REPORT / ANALYSIS
-Friday the S&P 500 declined about 0.2% to 5703.
-VIX declined about 1% to 16.15.
-The yield on the 10-year Treasury rose to 3.741% (compared to about this time, prior trading day).

MY TRADING POSITIONS:
XLK – Holding since the October 2022 lows. Added more 9/20.
UWM – added 7/15 & more 9/20.
QLD – added 7/24.
SSO – added 9/16.
SPY – added 9/19 & more 9/20

CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
The Bull/Bear Spread remained in a super BULL position at 1 Bear-sign and 22-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) increased to +21 (21 more Bull indicators than Bear indicators). The 10-dMA is sloping upward, issuing a buy signal.

TODAY’S COMMENT:
There was extremely high volume today (about double the norm) since today was an Options expiration day. Sometimes that can mess with some of the indicators, but that didn’t seem to be an issue today.

The Bull minus Bear spread for the 50-indicators is +21. That is the highest I have seen in the 2-years of records that I have.

I added a bearish triangle to my Summary of 50-Indicators chart (shown in red on the right side of the chart). My point is to show a bullish breakout. This pattern has been violated as the Index has broken above the upper boundary of the triangle.

Momentum looks strong across nearly all the ETF’s we track.

As noted yesterday: Of the 50-indicators I track, my only bearish indicator is the Advance/Decline Ratio. It is now overbought. This tends to be a very short-term signal; it warns at tops. It also gives a false signal after a bottom when investors are buying due to fear-of-missing-out. That’s what we have now.

BOTTOM LINE
I am bullish.

ETF - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily) ETF ranking follows:

My basket of Market Internals remained BUY. (My basket of Market Internals is a decent trend-following analysis that is most useful when it diverges from the Index.)

Buying More Stock ETFs

Indicators remains very bullish so I am adding to the stock portfolio today. I added S&P 500 ETF (SPY); 2x the Russell 2000 ETF (UWM) & the Technology Select Sector Fund ETF (XLK).

These moves bring me to my max invested position at about 75% invested in stocks/stock ETFs.

Thursday, September 19, 2024

Leading Economic Indicators ... Philly Fed ... Jobless Claims ... Momentum Trading DOW Stocks & ETFs … Stock Market Analysis ...

The Bull/Bear, 50-Indicator spread (Bull Indicators minus Bear Indicators) remained +20 (20 more Bull indicators than Bear indicators). The 10-dMA is sloping upward. This is a buy signal.

TODAY’S COMMENT:
Looks like a bullish take-off to me. The only worries we have now are: The election; world-war III; earnings; recession; and a few more. Hopefully Mr. Market will warn us in advance if some of these other worries become more strident. For now, markets look good. Indicators remain very bullish.

Thursday was a Follow-thru Day that is another indicator that signals an end to the weakness.

Thursday was a statistically significant up-day. That just means that the price-volume move exceeded my statistical parameters. Statistics show that a statistically-significant, up-day is followed by a down-day about 60% of the time. While this suggests a down-day tomorrow, it is not in my basket of 50-indicators.

Of the 50-indicators I track, my only bearish indicator is the Advance/Decline Ratio. It is now overbought. This tends to be a very short-term signal, but there may still be enough bullish momentum to send markets higher again Friday.

BOTTOM LINE
I am bullish and getting more “over-invested.”

ETF - MOMENTUM ANALYSIS:
TODAY’S RANKING OF 15 ETFs (Ranked Daily) ETF ranking follows:

My basket of Market Internals remained BUY. (My basket of Market Internals is a decent trend-following analysis that is most useful when it diverges from the Index.)

...My current invested position is about 65% stocks, including stock mutual funds and ETFs. I’m usually about 50% invested in stocks when markets are stretched. (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.