“Home builder confidence surged in September to match its
highest reading in a decade, an industry group said Monday. The National
Association of Home Builders’ index jumped six points to 65 in September. That
was the highest since last October…” Story at…
MARKET REPORT / ANALYSIS
-Monday the S&P 500 was unchanged at 2139 at the
close.
-VIX was down about 1% to 15.53 at the close.
-The yield on the 10-year Treasury remained 1.7%.
This morning I was about to call the end of the pullback
that hasn’t really gotten going; but when I entered market data, the indicators
didn’t agree. They were still pointing down. That was at the high of the day so
the answers only got worse at the close. Perhaps tomorrow I’ll get better news.
It may be that the market is just biding time until the FED announcement Wednesday
afternoon.
Monday, my collection of 16-indicators improved from -5
to -4.
New-highs outpaced new-lows today and improved from 21 to
50. This stat needs to continue to
improve if we are to avoid further pullback. At the top on 15 August, the
spread was +215.
My Money Trend indicator remains headed down Monday;
after slowing Friday its rate of change picked up Monday.
Breadth is still flashing “Sell” short-term when compared
to the S&P 500; so overall the most likely market direction is down, but
its signal is not as strong as it has been.
As noted previously, I’d still like to see some
confirmation in the charts. A drop below the prior low of 2126 on higher volume
would confirm the bearish position. Otherwise, it will necessitate cutting back
on short positions.
SHORT TRADE
I am still holding short positions in SH (about half my
prior position) and QID. My guess is that I will sell at a loss soon. I will wait to see how the market reacts in
the future.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks
advancing (NYSE) dropped to 48.2% Monday. It was 49.4% Friday. A number below
50% is usually BEARISH for the markets short-term.
On a longer term, the 150-day moving average of advancing
stocks dipped to 55.0%. A value above 50% generally indicates an up-trend. The McClellan Oscillator improved from -41 to
-20 (percentage calculation method).
New-highs outpaced New-lows. The spread (new-highs minus
new-lows) improved to +50 Monday. (It was +21 Friday.) The 10-day moving
average of the change in spread was -15. In other words, over the last 10-days,
on average, the spread has decreased by 15 each day. New-high/new-low data
still points down, but its rate of decline slowed sharply and is hinting at a
turn-up.
Market Internals remained
neutral on the market.
Market Internals are a decent trend-following analysis of
current market action, but should not be used alone for short term trading.
They are usually right, but they are often late. They are most useful when they diverge from
the Index. In 2014, using these
internals alone would have made a 9% return vs. 13% for the S&P 500 (in on
Positive, out on Negative – no shorting).
LONG TERM INDICATOR
Monday the Price was positive. Sentiment, Volume &
VIX indicators were neutral. The calm-before-the-storm indicator is “carry-over
negative”. Overall the long-term
indicator remained HOLD.
MY INVESTED STOCK POSITION:
TSP (RETIREMENT ACCOUNT – GOV EMPLOYEES) ALLOCATION
I reduced stock allocation to 30% stocks in the S&P
500 Index fund (C-Fund) Wednesday, 14 Sep in my long-term accounts based on the
Sell signal on 13 Sep.
I’ll switch back to BUY-mode soon if short-term
indicators turn up, assuming the long-term indicators remain OK.
