“New orders for U.S.-made goods unexpectedly rose in May,
pointing to a strengthening manufacturing sector, but business spending on
equipment appeared to have slowed further in the second quarter.” Story at…
AUTO SALES (USA Today)
“U.S. auto sales ticked upward in June, compared
with a year earlier, as rising sales of SUVs, crossovers and pickup trucks
offset the continued slide of passenger cars.” Story at…
RAYMOND JAMES COMMENTARY (Raymond James)
“Our work suggests the equity markets are gathering
enough energy, and momentum, to permit a dash to new all-time highs and then
keep right on pushing higher. Interestingly, almost NOBODY is expecting this to
occur. Most continue to look for a decline, or at best a range-bound stock
market. We do not believe it…” – Jeffrey Saut, Raymond James investment
strategist. Commentary at…
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 was down about 0.5% to 2713.
-VIX rose about 4% to 16.14.
-The yield on the 10-year Treasury was little changed at
2.831%.
The S&P 500 Index closed below its 50-dMA Tuesday,
but it remained above its lower trend line and the move was on very low,
shortened, pre-holiday trading.
Looks like the traders didn’t want to hold their
positions over the long weekend. Given the low volume, my guess is that they
all left for the Hamptons and won’t return until Monday. (Maybe the second team
will be working Thursday and Friday.) With the selloff, one would think the
indicators would be in the tank. Nope. Market Internals improved a lot on the
day and on a 10-day basis.
My daily sum of 17 Indicators improved from -6 to +2,
while the 10-day smoothed version improved from -61 to -53. We haven’t seen a bullish
move in the indicators in a month.
My longer-term indicator system remained neutral. I
remain cautiously bullish.
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…
I still have GE in my DOW 30 chart. I’ll have to update my calculations to delete
GE and add Walgreens Boots Alliance (WBA) since it has replaced GE in the DOW
30. WBA is best known for operating Walgreens drug stores.
TUESDAY MARKET INTERNALS (NYSE DATA)
Market Internals Improved
to Neutral on the market and may switch to Positive soon.
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 VIX, Price, Sentiment & Volume indicators were
neutral. Overall this is a NEUTRAL indication.
