“U.S. producer prices increased slightly more than
expected in June amid gains in the cost of services and motor vehicles, leading
to the biggest annual increase in 6-1/2 years…In the 12 months through June,
the core PPI advanced 2.7 percent after increasing 2.6 percent in May.” Story
at…
CRUDE INVENTORIES (OilPrice.com)
“Largest crude draw since 2016…The Energy Information
Administration reported a
huge draw in crude oil inventories of 12.6 million barrels for the week to July
6, after a build of 1.2 million
bpd reported for the previous week.” Story at…
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 was down about 0.47% to 2774.
-VIX jumped about 8% to 13.62.
-The yield on the 10-year Treasury slipped to 2.841%.
The markets were down today and the press reported the “reason”
was new Trump tariffs. That could be, markets dropped last night when the news
came out, but there were technical reasons too. Bollinger Bands were close to
overbought. As of Tuesday there had been 8-up days in the last 10-trading
days. Recently, that has been a signal
for a drop of some kind in the S&P 500. It doesn’t necessarily signal a big
drop and the bull could resume Thursday - we’ll have to wait and see.
My daily sum of 17 Indicators dropped from +5 to 0, but
the 10-day smoothed version that negates the daily fluctuations improved from -17
to -10. The Sum of Indicators is moving up. This is still bullish for the
market.
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…
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.
WEDNESDAY MARKET INTERNALS (NYSE DATA)
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: Wednesday, the VIX, Price, Sentiment & Volume indicators
were neutral. Overall this is a NEUTRAL indication.
