“U.S. consumer prices rose 0.2% in May, with surging
gasoline costs driving much of the increase. The Labor Department said Tuesday
that the consumer price index climbed 2.8% last month from a year earlier,
putting inflation on its fastest annual pace since February 2012. But core
prices — which exclude the volatile food and energy categories — have risen a
milder 2.2% over the past 12 months.” Story at…
WORLD HEADED FOR A SLOWDOWN (Financial Sense)
“Despite the U.S. leading economic indicators appearing
healthy, the global economy appears to be headed for a slowdown, with only 34%
of the 40 countries we track having leading economic indicators (LEI’s) signaling
growth ahead, and the actual GDP-weighted Global LEI growth now below zero…This
correlation by no means implies a US recession, but it undoubtedly is likely to
put downward pressure on the U.S. LEI in the coming months.” – Dwaine Van
Vuuren. Commentary at…
JEFFREY SAUT COMMENTARY (Raymond James)
“There is a little flat spell in the short-term energy
model arriving today [Monday] and extending into early next week. Yet, it is
difficult to see much downside coming in right here, but we could get a big
stall. Over the intermediate term we don’t see much to stop the S& P 500
(SPX) from making new all-time highs…” Commentary at…
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 rose about 0.2% to 2787.
-VIX slipped about 0.1% to 12.34.
-The yield on the 10-year Treasury rose to 2.961%.
My daily sum of 17 Indicators improved from +6 to +8,
while the 10-day smoothed version improved from +38 to +48. A number above zero
shows most indicators are bullish.
The overbought/oversold ratio (Based on Breadth) remains
“overbought.” Overbought conditions are not unusual after a correction bottom
as investors pile back into the market. RSI is a neutral 66 so I am not too worried
about overbought signals now. However, there is some concern creeping in. I’ve
suggested 2800 may be a trouble point.
That “concern level” has gone up a bit to around 2850.
Most other key indicators remain bullish: Smart Money
(late-day action is bullish); Money Trend (an estimate of where $ are going) is
bullish; new-high/new-low data remains bullish.
My longer-term indicator system remains bullish and I
remain a bull. I’ll pay attention when the Index reaches the vicinity of 2800-2850;
we could be due for a small pullback (say a couple %) at that time. Unless the
markets get way ahead of themselves, there’s no point to trade small market
moves – at least that’s my take.
MOMENTUM ANALYSIS:
TODAY’S RANKING OF
15 ETFs (Ranked Daily)
The top ranked ETF receives 100%. The rest are then
ranked based on their momentum relative to the leading ETF. While momentum isn’t stock performance per
se, momentum is closely related to stock performance. For example, over the 4-months
from Oct thru mid-February 2016, the number 1 ranked Financials (XLF) outperformed
the S&P 500 by nearly 20%. In 2017 Technology (XLK) was ranked in the top 3
Momentum Plays for 52% of all trading days in 2017 (if I counted correctly.)
XLK was up 35% on the year while the S&P 500 was up 18%.
*For additional background on the ETF ranking system see
NTSM Page at…
TODAY’S 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. (On 5 Apr 2018 I
corrected a coding/graphing error that had consistently shown Nike
incorrectly.)
*I rank the Dow 30 similarly to the ETF ranking system.
For more details, see NTSM Page at…
TUESDAY MARKET INTERNALS (NYSE DATA)
Market Internals
remained Positive 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).
18 Apr 2018 I
increased stock investments from 35% to 50% based on the Intermediate/Long-Term
Indicator that turned positive on the 17th. (It has since turned Neutral.) For
me, fully invested is a balanced 50% stock portfolio. 50% is my minimum unless
I am in full defense mode.
On 10 May 2018 I added
stock positions to increase Stock investments to 58% based on more evidence
that the correction is over. This is high for me given that we are late in this
cycle (and as a retiree), but it indicates my bullishness after the correction.
I’ll sell these new positions quickly if the market turns down.
INTERMEDIATE / LONG-TERM INDICATOR
Intermediate/Long-Term
Indicator: Tuesday, the Price, Volume and VIX Indicators are positive; the Sentiment
indicator was neutral. Overall this is a BULLISH indication.
