“American manufacturers grew in June at the fastest pace
in four months, but they’re running into trouble getting supplies delivered on
time owing to recent Trump administration tariffs as well as transportation
bottlenecks. The Institute for Supply Management said its manufacturing index
rose to 60.2% last month…” Story at…
CONSTRUCTION SPENDING (Seattle Times)
“Spending on U.S. construction projects edged up 0.4
percent in May, while April’s figure was revised down significantly — signs
that new building is still uneven despite a growing economy.” Story at…
MARKET REPORT / ANALYSIS
-Monday the S&P 500 was up about 0.3% to 2727.
-VIX dipped about 3% to 15.6.
-The yield on the 10-year Treasury rose to 2.875%.
Friday’s close couldn’t have been much worse as the Index
fell nearly 1% in the late-day-action. Today’s couldn’t have looked much better
with a strong afternoon and a positive closing Tick of +191. Unfortunately,
indicators did not improve today.
My daily sum of 17 Indicators slipped from -3 to -6,
while the 10-day smoothed version dropped from -58 to -61. The poor
new-high/new-low data is to blame for some of the indicator breakdown.
The chart signals actually improved today as the S&P
500 closed above its 50-dMA and the trend line looks good. Drawing a trend line
can sometimes be open to interpretation, but now the lower trend line seems
fairly clear. The good news is that the Index has not closed below the lower
trend line even though it briefly closed below its 50-dMA last week.
Indicators are declining; chart action is improving…it’s
a toss up so we’ll wait.
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.
MONDAY MARKET INTERNALS (NYSE DATA)
Market Internals declined
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 VIX, Price, Sentiment & Volume indicators were
neutral. Overall this is a NEUTRAL indication.
