Monday, July 30, 2018
TUESDAY: I won't post for Tuesday’s market close.
Too busy. I plan
to catch up Wednesday or Thursday.
Home Sales … Dallas FED … National Debt … Jeffrey Saut Commentary Excerpt … Hussman Market Commentary Excerpt … Stock Market Analysis… ETF Trading … Dow 30 Ranking
HOME SALES (Reuters)
“Contracts to buy previously owned homes unexpectedly
rose in June after two straight monthly declines, but the housing market
remains hobbled by a dearth of properties available for sale…The Realtors group
expects existing home sales to decrease 1.0 percent this year, reversing 2017’s
1.1 percent increase.” Story at…
DALLAS FED (Advisor Perspectives)
“The robust expansion in Texas factory activity continued
in July, according to business executives responding to the Texas Manufacturing
Outlook Survey. The production index, a key measure of state manufacturing
conditions, rose six points to 29.4, signaling an acceleration in output
growth.” Story at…
THE NATIONAL DEBT (Real Investment Advice)
“The last time the nation experienced trillion-dollar
deficits was during a serious economic downturn, no less – lawmakers took the
issue seriously. PAYGO laws were established, a fiscal commission was formed,
new discretionary spending caps were implemented and policymakers entered a
multi-year debate on how best to bring down long-term debt levels.
This time around, with the emergence of trillion-dollar
deficits during a period of economic strength – when we should be saving for future
downturns – few seem to even take notice. On our current course, debt will
overtake the size of the entire economy in about a decade, and interest will be
the largest government program in three decades or less. This will weaken both
our economy and our role in the world.” Commentary at…
JEFFREY SAUT COMMENTARY (Raymond James)
“…we are turning somewhat more cautious
on a VERY short-term trading basis…A short-term trading top is due after a
failed attempt by the SPX to trade out to new all-time highs. However, it is
just that, a short-term trading “call.” – Jeffery Saut. Commentary at…
MARKET COMMENTARY EXCERPT (Hussman Funds)
“Just as the primary driver of market returns in recent
years has been a cyclical move from depressed valuations to the most extreme
valuation multiples in history, much of the growth in the U.S. economy since
the global financial crisis has been driven by the largest cyclical increase in
history in the ratio of civilian employment to the civilian labor force. That’s
another way of saying that the growth has been largely driven by a decline in
the unemployment rate from 10% to just 3.8%. With both valuations and
unemployment at cyclical extremes, the likelihood is that the tailwinds that
have driven the market returns and economic growth of recent years will turn
into headwinds. As that happens, extrapolating growth, as if it is some sort of
entitlement, will be a profound mistake.” – John Hussman, Phd. Commentary at…
MARKET REPORT / ANALYSIS
-Monday the S&P 500 dipped about 0.6% to 2803.
-VIX rose about 9% to 14.26.
-The yield on the 10-year Treasury rose to 2.974%.
If you follow the market regularly it’s always a little
disconcerting to see the markets falling. Half the trading days have finished
down over the last 10-days and there have been 8 down-days over the last month.
That’s never comforting, but indicators were mostly bullish at today’s close so
it doesn’t look like we are headed for a big drop, at least based on the data
so far.
VIX was up but it has not risen enough to give a sell
signal. RSI and Bollinger Bands are neutral. Money Trend is up. Up-volume has turned up
nicely. The Smart Money (based on late day action) is also up. Breadth has
improved on a 10-day basis.
My daily sum of 17 Indicators improved from -1 to +3
while the 10-day smoothed version that negates the daily fluctuations improved
from -18 to -11, indicating that conditions in the market are better than
2-weeks ago.
Cyclical Industrial stocks (XLI-ETF) are still
outperforming the S&P 500 over the most recent 10 and 20-day period and the
S&P 500 has been outperforming
I still don’t see a lot of bearish indicators. One is the statistical analysis of the
S&P 500 daily fluctuations. The
daily swings are very small and that can be a bearish sign, but VIX has not
dropped into the critical low are that it was back last January. A retracement
back to around 2760 or so seems like a likely bottom zone for a small retreat
and we may not get that far…but who knows? Even though I don’t expect it, selling
could always pick up. We’ll see.
I remain fully invested.
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.
*I rank the Dow 30 similarly to the ETF ranking system.
For more details, see NTSM Page at…
Intel took a huge hit today, dropping 8.6% due to trade
war/tariff concerns. I suspect this is overblown. Intel has a PE of 21 (vs.??
for the Dow 30) and a Dividend yield of 2.3%...seems like a value buy to me. As
shown above, it ranks 21st in the Dow 30 momentum trading system and
that’s not good.
MONDAY MARKET INTERNALS (NYSE DATA)
Market Internals improved
to 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: Monday, the Price indicator was positive; Volume, VIX &
Sentiment indicators were neutral. Overall this is a NEUTRAL indication.
Friday, July 27, 2018
GDP … Michigan Sentiment … Stock Market Analysis… ETF Trading … Dow 30 Ranking
GDP (NY Times)
FRIDAY MARKET INTERNALS (NYSE DATA)
“Tax cuts and federal spending are adding fuel to the
already strong economy, putting the United States on a pace for its best year
of growth in well over a decade. The Commerce Department reported Friday that gross domestic product, the broadest
measure of goods and services produced in the economy, grew at a 4.1 percent
rate in the second quarter of the year.” Story at…
My cmt: Ok, but
an overheating economy is not necessarily great news for the stock market since
it raises the likelihood that the FED will raise interest rates at a faster
pace. That’s not a prediction – just a warning. We’ll need to pay attention.
MICHIGAN SENTIMENT (WSJ)
“Trade concerns slightly dimmed U.S. consumers’ outlook
on the economy in July.
The University of Michigan said Friday its index of
consumer sentiment was 97.9 this
month, down from June’s final reading of 98.2.” Story at…
MARKET REPORT / ANALYSIS
-Friday the S&P 500 dipped about 0.7% to 2819.
-VIX rose about 7% to 13.03.
-The yield on the 10-year Treasury dipped to 2.955%.
My daily sum of 17 Indicators slipped from +3 to -1 while
the 10-day smoothed version that negates the daily fluctuations slipped from
-14 to -18, indicating that conditions in the market are slightly worse than
2-weeks ago.
There are a couple of strong bullish signs. Cyclical
Industrial stocks (XLI-ETF) have been outperforming the S&P 500 over the
most recent 10 and 20-day period and the S&P 500 has been outperforming Utilities
recently too. If investors were worried,
the results would be reversed. Add that Smart Money is moving up, and we have
to conclude that most investors think this market is going higher. Advancing
volume has bounced up. Breadth vs. the S&P 500 is bullish.
I don’t see a lot of bearish indicators. One is the statistical analysis of the
S&P 500 daily fluctuations. The
daily swings are very small and that can be a bearish sign, but VIX has not
dropped into the critical low are that it was back last January. The 5-day,
%-bulls value (Sentiment) is 85% and that’s well below the 91% peak during the recent
January-February 10% correction. Bottom
line, sentiment is not suggesting a top now either, so I think we go higher too.
Of course, higher is not always in a straight line.
I remain fully invested.
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.
*I rank the Dow 30 similarly to the ETF ranking system.
For more details, see NTSM Page at…
Intel took a huge hit today, dropping 8.6% due to trade
war/tariff concerns. I suspect this is overblown. Intel has a PE of 21 (vs. 23
for the Dow 30) and a Dividend yield of 2.3%...seems like a value buy to me. As
shown above, it ranks 21st in the Dow 30 momentum trading system and
that’s not good.
Market Internals slipped
to 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).
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: Friday, the Price indicator was positive; Volume, VIX &
Sentiment indicators were neutral. Overall this is a NEUTRAL indication.
Thursday, July 26, 2018
Durable Goods Orders … Jobless Claims … Stock Market Analysis… ETF Trading … Dow 30 Ranking
DURABLE GOODS (MarketWatch)
“Durable-goods orders rose 1% in June, the first increase
in three months…Orders minus transportation rose 0.4%, the
government said. Excluding defense, orders rose 1.5%.” Story at…
JOBLESS CLAIMS (Reuters)
“The number of Americans filing for unemployment benefits
rose from a more than 48-1/2-year low last week, but continued to point to a
tightening labor market. Initial claims for state unemployment benefits
increased 9,000 to a seasonally adjusted 217,000 for the week ended July 2…”
Story at…
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 dipped about 0.3% to 2837.
-VIX was down about 1% to 12.14.
-The yield on the 10-year Treasury little changed at 2.977%.
My daily sum of 17 Indicators slipped from +4 to +3 (not
a significant change) while the 10-day smoothed version that negates the daily
fluctuations was unchanged at -14, indicating that conditions in the market are
similar to 2-weeks ago. This is a mildly bullish indication.
Not much change from yesterday, except that Money Trend was/is
down, not up; I was wrong yesterday. Smart Money (based on late day action) is
turning up. 10-day Breadth improved today again. RSI remans elevated. Bollinger
Bands haven’t indicated overbought yet.
I remain fully invested.
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.
*I rank the Dow 30 similarly to the ETF ranking system.
For more details, see NTSM Page at…
THURSDAY 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: Thursday, the Price indicator was positive; Volume, VIX &
Sentiment indicators were neutral. Overall this is a NEUTRAL indication.
Wednesday, July 25, 2018
New Home sales … Crude Inventories … Stock Market Analysis… ETF Trading … Dow 30 Ranking
NEW HOME SALES (Reuters)
“Sales of new U.S. single-family homes fell to an
eight-month low in June and data for the prior month was revised sharply lower,
the latest indications that the housing market was slowing down… New home sales
are drawn from permits and tend to be volatile on a month-to-month basis. They
increased 2.4 percent from a year earlier.” Story at…
My cmt: So, the big decrease is actually an increase over
year ago data. This isn’t a big deal yet.
“A day after the American Petroleum Institute pushed
prices up by surprising the
market with a draw across the crude oil and fuels inventory board, the Energy
Information Administration reported a
draw in crude oil and another draw in gasoline inventories for the week to July
20. Crude oil inventories were 6.1 million barrels lower in July 16-20 than in
the week before…” Story at…
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 rose about 0.9% to 2846.
-VIX was down about 1% to 12.29.
-The yield on the 10-year Treasury slipped to 2.970%.
Wednesday was a statistically-significant, up-day. That
just means that the price-volume move up exceeded statistical parameters that I
track. The stats show that about 60% of the time a statistically significant
move up will be followed by a down-day the next day. Since I am tracking the
Rydex long/short funds for sentiment, I see a lot of traders playing this trend
and I’d expect to see more shorts added tonight when I get the latest sentiment
(%-bulls) numbers.
The Index moved up to its upper trend line today so that
would suggest a retreat of a couple of % may be in order, especially after the
big move up today…regular readers know I have suggested a small retreat for several
days. There were, however, plenty of bull signs today.
My daily sum of 17 Indicators improved from -5 to +4
while the 10-day smoothed version that negates the daily fluctuations improved
from -18 to -14, indicating that conditions in the market are now better than
2-weeks ago.
My Money Trend indicator turned up and is now bullish. Breadth
reversed upward on a 10-day basis (short-term indicator) and that’s a good sign
too.
Some Bear issues:
-RSI remains overbought, but Bollinger Bands have not yet
confirmed this bearish sign.
-Statistical
analysis of the daily moves shows that over the last month, market moves have
been very consistent. This is sometimes
a sign of complacency and can presage a market drop. VIX has fallen to around
12 which is low, but not the extreme complacency we saw last January when VIX
fell below 10.
We’d need to see more negative indicators flashing sell
signals before I would cut my stock allocation.
I remain fully invested.
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.
*I rank the Dow 30 similarly to the ETF ranking system.
For more details, see NTSM Page at…
WEDNESDAY MARKET INTERNALS (NYSE DATA)
Market Internals improved
to 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: Wednesday, the Price and VIX indicators were positive; Volume
& Sentiment indicators were neutral. Overall this is a BULLISH indication.
Tuesday, July 24, 2018
Jeffery Saut Raymond James Commentary … Stock Market Analysis… ETF Trading … Dow 30 Ranking
MARKET COMMENTARY (Raymond James)
“…Sam Stovall (CFRA), son of legendary strategist Bob
Stovall who was the keeper of the GM indicator, wrote last week, ‘History,
encouragingly says, but doesn’t guarantee, that the S&P 500 could advance
more than 10% beyond the prior high before slipping into another decline of 5%
or more.’” – Jeffery Saut. Commentary at…
My cmt: If this bit of history holds true, the S&P
500 could make 3160 before we see a 5% pullback.
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 rose about 0.5% to 2820.
-VIX was down about 2% to 12.41.
-The yield on the 10-year Treasury slipped to 2.949%.
My daily sum of 17 Indicators improved slightly from -6
to -5 while the 10-day smoothed version that negates the daily fluctuations
dropped from -8 to -18, indicating that conditions in the market are worse than
2-weeks ago. As noted yesterday, 2-weeks ago the S&P 500 was 2784 about a %
lower than today’s value. That seems to suggest that the market will slip some
from here.
Among the topping indicators (Bollinger Bands, RSI,
Breadth vs. S&P 500, etc.) RSI is now overbought. We’ll have to see if the Bollinger
Bands confirm this bearish sign. Some other indicators look bearish: My Money Trend
indicator is headed down and is bearish; Breadth is falling on a 10-day basis
(short-term indicator); Statistical analysis of the daily moves shows that over
the last month, market moves have been very consistent. This is sometimes a sign of complacency and
can presage a market drop. VIX has fallen to around 12 which is low, but not
the extreme complacency we saw last January when VIX fell below 10. None of
this says we are expecting a crash or major fall – a 2 or 3% dip would be more
the norm. We’d need to see more topping indicator flashing sell signals.
I am not too worried yet; I remain fully invested.
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
Negative 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 indicator turned positive; Volume, VIX &
Sentiment indicators were neutral. Overall this is a NEUTRAL indication.
Monday, July 23, 2018
Existing Home Sales … Trade War and Game Theory … Stock Market Analysis… ETF Trading … Dow 30 Ranking
HOME SALES (Reuters)
"U.S. home sales unexpectedly fell in June, posting their
third straight monthly decline as a persistent shortage of properties on the
market drove house prices to a record high…Existing home sales, which make up
about 90 percent of U.S. home sales, dropped 2.2 percent from a year ago in
June.” Story at…
My cmt: Home sales are watched by many as a recession
sign. Weakening home sales is a warning but certainly not a guarantee of
recession. Other part of the economy look good.
TRADE WARS AND GAME THEORY (Bloomberg Opinion)
“For many reasons, trade tensions are less damaging for
the U.S. than for China, whose growth model is still notably dependent on
foreign markets. This relative advantage is already evident in the performance
of the equity and currency markets of the two countries. While this advantage
certainly isn’t protection against some absolute damage, it gives the U.S. a
stronger hand to play.” - Mohamed El-Arian, Chief economic adviser at Allianz
SE, the parent company of Pimco. Commentary at…
MARKET REPORT / ANALYSIS
-Monday the S&P 500 rose about 0.2% to 2807.
-VIX was down about 2% to 12.62.
-The yield on the 10-year Treasury rose to 2.957%.
My daily sum of 17 Indicators slipped from -4 to -6 while
the 10-day smoothed version that negates the daily fluctuations dropped from zero
to -8, indicating that conditions in the market are worse than 2-weeks ago.
Interestingly, 2-weeks ago the S&P 500 was 2784 or less than 1% below today’s
value. That seems to suggest that the market will slip some from here.
Topping indicators (Bollinger Bands, RSI, Breadth vs.
S&P 500, etc.) are not indicating a top at this time, so the most likely outcome
is that the Index will drift down from here rather than see a serious drop.
I remain fully invested.
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…
MONDAY MARKET INTERNALS (NYSE DATA)
Market Internals dropped
to Negative 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: Monday, the Volume, VIX, Price & Sentiment indicators were
neutral. Overall this is a NEUTRAL indication.
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