Sunday, July 10, 2016

No portfolio changes Monday … Death Cross for the Dow Transports … Pros don’t Like Stocks or Bonds …

I will be busy Monday morning and unable to make any portfolio changes even if I did like the market action Monday.
The overbought condition bothers me as it relates to advancing stocks vs declining stocks over the most recent 10-day period (the old overbought/ oversold ratio). It has been overbought for the last 7-trading days.
Further, I noticed that the 100-dMA of the percentage of stocks advancing was at an extreme high of 56.3% last Wednesday.  That is the highest value for the 100-day going all the way back to August of 2010. That’s as far as my current data goes and I’m too lazy to track it further back thru some of my older files. This is just more evidence that the Index is due for a pullback of some sort.
“This does not mean a "sell signal" for investors, Gordon said. Rather, he sees the crude rally as an indication of a broader recovery…” Story at…
My cmt: In June of 2015 when the 50-dMA of Transports crossed below its 200-dMA I suggested that it wasn’t the end of the world because freight haulers and trucking remained in good condition. Now, the CASS freight Index shows a drop in shipments of nearly 6% year-over-year.  Fuel prices are up but not drastically.  The death-cross in transports is not good news.
“The outlook for U.S. stocks is terrible. GMO’s central forecast — which is a directional estimate more than a precise prediction — warns that U.S. large- and small-cap stock indices are now both so overpriced compared to history that they will probably lose value, compared to inflation, over the next seven or so years.” Story at…