Home Sales ... Crude Inventory ... 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.
 
NATE SILVER (NY Times)
“My gut says Donald Trump. And my guess is that it is true for many anxious Democrats. But I don’t think you should put any value whatsoever on anyone’s gut — including mine. Instead, you should resign yourself to the fact that a 50-50 forecast really does mean 50-50. And you should be open to the possibility that those forecasts are wrong, and that could be the case equally in the direction of Mr. Trump or Ms. Harris.” – Nate Silver, Silver Bulletin Election Forecast.
Nate Silver: Here’s What My Gut Says About the Election. But Don’t Trust Anyone’s Gut, Even Mine.
 
EXISTING HOME SALES (Yahoo Finance)
“U.S. existing home sales dropped to a 14-year low in September, weighed down by higher mortgage rates and house prices.
The second straight monthly decline in home resales reinforced economists' views that the slump in residential investment, which includes homebuilding, deepened in the third quarter... Home sales fell 1.0% last month...”
https://finance.yahoo.com/news/us-existing-home-sales-fall-140141499.html
 
CRUDE INVENTORY (EIA)
“U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 5.5 million barrels from the previous week. At 426.0 million barrels, U.S. crude oil inventories are about 4% 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 slipped about 0.9% to 5797.
-VIX rose about 6% to 19.24.  
-The yield on the 10-year Treasury rose (compared to about this time, prior trading day) to 4.246%.
 
MY TRADING POSITIONS:
XLK – Holding since the October 2022 lows.  Added more 9/20.
UWM – Sold half this position 10/21.
QLD – added 7/24.
SSO – added 10/16.
SPY – added 9/19 & more 10/16
 
CURRENT SUMMARY OF APPROXIMATELY 50 INDICATORS:
Today, of the 50-Indicators I track, 12 gave Bear-signs and 9 were Bullish. The rest are neutral. (It is normal to have a lot of neutral indicators since many of the indicators are top or bottom indicators that will signal only at extremes.)

The daily Bull/Bear, 50-Indicator spread (Bull Indicators minus Bear Indicators, red curve in the chart above) declined to -3 (3 more Bear indicators than Bull indicators).
 
TODAY’S COMMENT:
Today’s Bull-Bear spread of -3 is mildly bearish, but probably should be considered neutral. The 10-dMA of the 50-Indicator Spread (purple line in the chart above) has turned bearish since it is moving lower. (I follow the 10-dMA for trading buy-signals and as an indicator for sell signals.)
 
First warning on breadth? The 10-dMA of issues advancing on the NYSE shows that over the last 2-weeks, less than half of issues on the NYSE have advanced. That’s a bear sign and there are now more bear signs than I care to list.
 
Wednesday was a statistically significant down-day. That just means that the price-volume move exceeded my statistical parameters. Statistics show that a statistically-significant, down-day is followed by an up-day about 60% of the time. 
 
Statistical analysis of the daily moves on the S&P 500 improved again today. In advance of prior pullbacks, statistical moves have continued to signal weakness until the pullback occurred. This may be telling us again that a pullback (if it continues) will not be very big. The S&P 500 is 2.2% above its 50-dMA and that is a likely support level, i.e., the drop from today’s close is not likely to be much more than another 2%.
 
I’ve added a Blue, dashed line in the chart above to show a lower, trend-line back to the lows of early August. This shows a possibility that the pullback could be over.
 
BOTTOM LINE
I don’t know if the decline will continue, but even if it does, the drop should be small from today’s close.
 
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 declined to SELL. (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 70% 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 confident that markets will continue higher.)
 
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.