“U.S. retail sales rose solidly in June as households
boosted purchases of automobiles and a range of other goods, cementing
expectations for robust economic growth in the second quarter.” Story at… https://www.reuters.com/article/us-usa-economy/us-retail-sales-increase-solidly-on-automobiles-idUSKBN1K61KV
EMPIRE MANUFACTURING (MarketWatch)
“The Empire State manufacturing index fell 2.4 points in
July to a reading of 22.6, the New York Federal Reserve said Monday.... Economists
believe the U.S. manufacturing sector is on an impressive roll but there is
concern trade tensions could dampen growth. [Still] There is no hard evidence
that tariffs are hurting business investment yet.” Story at…
MARKET REPORT / ANALYSIS
-Monday the S&P 500 was down about 0.1% to 2798.
-VIX rose about 5% to 12.83.
-The yield on the 10-year Treasury rose to 2.857%.
Volume was still about 15% below the monthly average
today. Usually, Volume peaks at tops due to a buying frenzy that drives volume
and price higher. To some extent, we saw that in January as volume was 22% and
12% above the monthly average 2 and 3-days before the January 26 top. The
opposite side of the coin is that if buying dries up, the market is going to
fall. I am not saying that’s what is happening now, but there are concerns. Let’s
not panic yet, but…
My daily sum of 17 Indicators slipped from +3 to -4 while
the 10-day smoothed version that negates the daily fluctuations dipped from +8
to +7. The Sum of Indicators is moving up. This is still mildly bullish for the
market, but there is some worry there.
Some specific bearish signs are:
-Breadth (number of stocks advancing) is falling on a
10-day basis.
-New-highs are not keeping up with the market and the
slightly falling trend is concerning.
-Bollinger Bands are close to overbought, but not yet
there.
-RSI is headed higher, but again, not yet overbought.
-The Industrial Cyclical stocks (XLI-ETF) are still
under-performing the S&P 500 and this is a decidedly bearish sign.
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.
MONDAY 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: Monday, the Volume, VIX, Price & Sentiment indicators were
neutral. Overall this is a NEUTRAL indication.
