Monday, September 10, 2018

Jeffrey Saut Commentary Excerpt ...Stock Market Analysis… ETF Trading … Dow 30 Ranking

JEFFREY SAUT COMMENTARY EXCERPT (Raymond James)
“The D-J Transports made a new all-time high recently, which has not been confirmed by a new all-time high in the D-J Industrials. That, as of now, is a Dow Theory upside non-confirmation that we will be monitoring in the sessions ahead… Speaking to the Buying Power and Selling Pressure indices, Buying Power has seen a slight softening since late July, while Selling Pressure has experienced a slight increase. This does not meaningfully impact our bullish “call.” – Jeffrey Saut. Commentary at…
 
MARKET REPORT / ANALYSIS         
-Monday the S&P 500 rose about 0.2% to 2877.
-VIX dropped about 5% to 14.15. 
-The yield on the 10-year Treasury dipped slightly to 2.934% as of this post.
 
Currently, my daily sum of 17 Indicators dipped from -4 to -5 (a positive number is bullish; negatives are bearish) while the 10-day smoothed version that negates the daily fluctuations dipped from -11 to -22 indicating that conditions are worse than 2-weeks ago.  Indicators still have a negative outlook at this point.
 
It still looks like the Index will fall to the 50-dMA. We’ll worry if the Index falls below the 50-day value…or if the indicators really turn south. Both Utilities and XLI spread vs. the S&P 500 are turning more bullish, so it doesn’t look like a serious drop is near.
 
I remain fully invested. 
 
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.
*I rank the Dow 30 similarly to the ETF ranking system. For more details, see NTSM Page at…
 
MONDAY MARKET INTERNALS (NYSE DATA)
Market Internals remained 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). 
I am now 50% invested in stocks. For me, fully invested is a balanced 50% stock portfolio. As a retiree, this is a position with which I am comfortable unless I am in full defense mode or feeling especially optimistic.
 
INTERMEDIATE / LONG-TERM INDICATOR
Intermediate/Long-Term Indicator: Monday, the Price indicator was positive; Sentiment was negative; Volume & VIX were neutral. Overall this is a NEUTRAL indication.