“U.S. industrial production increased in June, boosted by
a sharp rebound in manufacturing and further gains in mining output, the latest
sign of robust economic growth in the second quarter…Manufacturing output
surged 0.8 percent in June…” Story at…
JEFFREY SAUT COMMENTARY (Raymond James)
“…there is the chance we have entered a “buying
stampede.” Recall that buying stampedes typically last 17-25 sessions, with
only one- to three-session pauses/pullbacks, before they exhaust themselves on
the upside. It appears to be the rhythm of the thing in that it takes that long
to get everybody bullish enough to throw in the towel and “buy ‘em” just in
time for a trading top to arrive. While it is true some stampedes have lasted
25-30 sessions, it is rare for one to go more than 30 sessions. If this is such
a stampede, today is session 11.” Jeffrey Saut. Commentary at…
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 was up about 0.4% to 2810.
-VIX dropped about 6% to 12.06.
-The yield on the 10-year Treasury we up slightly to 2.862%.
Volume improved today, but it was still about 5% below
the monthly average. Perhaps investors don’t believe the rally. There are a lot of shorts on some of the
trader boards I visit. When I look at %-Bulls in the Guggenheim/Rydex long/short
funds, it shows sentiment stands at 84%-bulls.
That’s a high value but not presently high enough to give a bearish
warning. Sentiment suggests this rally can go higher.
RSI and Bollinger bands still have room to run before
they give a bearish warning.
My daily sum of 17 Indicators improved from -4 to +1
while the 10-day smoothed version that negates the daily fluctuations climbed
from +7 to +14. The Sum of Indicators is moving up. This is still bullish for
the market.
Market Internals looked good today except that the Advancing
volume is falling on a 10-day basis.
This may not be correctly reflecting the data since I use actual
advancing volume. That means when overall
volume is low, advancing volume is also low; this can give a bearish signal
when one may not be warranted. On a percentage basis, advancing volume is up
58% over the last 10-days and that’s reasonably bullish.
The Bear signs I mentioned yesterday remain, but again, there
aren’t yet enough bear signs to get me too worried; therefore, I remain
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…
GE has been removed from my DOW 30 chart and Walgreens
Boots Alliance (WBA) has been added to match the official DOW 30. WBA is best known for operating Walgreens
drug stores.
TUESDAY MARKET INTERNALS (NYSE DATA)
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).
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 Volume, VIX, Price & Sentiment indicators were
neutral. Overall this is a NEUTRAL indication.
