New Home Sales ... Jobless Claims ... Nat’l Activity Index ... 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.
 
“What is a level of U.S. debt that financial markets think is too large? The answer is “we have no idea” because it will depend on what is going on around the world and where else investors could park their money, said Maya MacGuineas, the president of the Committee for a Responsible Federal Budget, a nonpartisan budget watchdog. “When you look at the fiscal situation structurally, clearly it is unsound. The definition of unsustainable is if your debt is growing faster than your economy...
... “So, if you’re in the markets, you’re going to be unwise to bet on a fiscal crisis until it starts,” MacGuineas said. “And then my assumption is it would happen incredibly quickly, a Treasury auction that goes bad, depending on what the responses are, things could go incredibly quickly.”  Story at...
A U.S. fiscal crisis would happen incredibly quickly — and there’s no way to predict when, says head of budget watchdog
 
NEW HOME SALES (Reuters)
“Sales of new U.S. single-family homes increased to the highest level in nearly 1-1/2 years in September as buyers rushed in to take advantage of a decline in mortgage rates. New home sales jumped 4.1%...” Story at...
https://www.reuters.com/markets/us/us-new-home-sales-highest-nearly-1-12-years-september-2024-10-24/
 
JOBLESS CLAIMS (AP News)
“The number of Americans filing for unemployment benefits fell last week, but the total number of those collecting benefits rose to its highest level in almost three years. The Labor Department reported Thursday that applications for jobless claims fell by 15,000 to 227,000 for the week of Oct. 19... Continuing claims, the total number of Americans collecting jobless benefits, rose by 28,000 to 1.9 million for the week of Oct. 12. That’s the most since November 13, 2021.” Story at...
https://apnews.com/article/unemployment-benefits-jobless-claims-layoffs-labor-529340624cf272ba6030b8070264d920
 
NATIONAL ACTIVITY INDEX (Advisor Perspectives)

“The headline for the latest release of the Chicago Fed's National Activity Index (CFNAI) reads "Index suggests economic growth decreased in July". The Chicago Fed National Activity Index (CFNAI) fell to -0.34 in July from -0.09 in June. Two of the four broad categories of indicators used to construct the index decreased from June and three categories made negative contributions in July.” Commentary and chart at...
https://www.advisorperspectives.com/dshort/updates/2024/08/22/chicago-fed-national-activity-index-cfnai-economic-growth-decreased-july-2024
 
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 rose about 0.2% to 5810.
-VIX declined about 1% to 19.08.  
-The yield on the 10-year Treasury declined (compared to about this time, prior trading day) to 4.214%.
 
MY TRADING POSITIONS:
XLK – Holding since the October 2022 lows.  Added more 9/20.
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, 10 gave Bear-signs and 10 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) improved to zero (equal Bear indicators and Bull indicators).
 
TODAY’S COMMENT:
Today’s Bull-Bear spread of zero is neutral. The 10-dMA of the 50-Indicator Spread (purple line in the chart above) remained bearish since it is still moving lower. (I follow the 10-dMA for trading buy-signals and as an indicator for sell signals.)
 
I’ve added a light 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.
 
My guess is that the decline will continue, but not much farther. The 50-dMA is a little more than 2% lower than today’s close.
 
BOTTOM LINE
I’m neutral on the markets. I don’t know if the decline will continue, but if it does, the drop should be small.
 
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
 
THURSDAY MARKET INTERNALS (NYSE DATA)

My basket of Market Internals improved to 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 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 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.