MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 rose dropped about 0.8% to 2901.
-VIX rose about 4% to 17.50.
-The yield on the 10-year Treasury slipped to 1.555%.
We note that we had a 95% down volume day that was followed
closely by an 89% up-volume day and a 77% up-volume day. That constituted an upside reversal, as I see
it, based on Lowry Research papers on the subject. With new-highs twice
new-lows today, we are encouraged that the bottom-reversal call is most likely correct,
but as always, there are no guarantees.
MACD or Breadth is still bearish and that’s a concern,
but 10-day breadth (measured by the % of advancing stocks on the NYSE) is above
50% indicating more than half of the stocks have advanced over the last 10-days.
MACD of S&P 500 price looks like it may soon make a bullish cross.
Overall, my daily sum of 20 Indicators improved
from +7 to +8 (a positive number is bullish; negatives are bearish) while the
10-day smoothed version that negates the daily fluctuations improved
from -86 to -63. (These numbers sometimes change after I post the blog based on
data that comes in late.) Most of these indicators are short-term.
I am once again fully invested with a balanced portfolio
with 55% in stocks at the close Tuesday.
TOP / BOTTOM INDICATOR SCALE OF 1 TO 10 (Zero is a
neutral reading.)
Today’s Reading: -1
-The Long-term Fosback Logic Index indicators was
bearish, but this is suspect since the McClellan Oscillator is positive and
that cancels the Fosback indicators.
- Most Recent Day with a value other than Zero: -1 on 20
August.
(1) +10 Max Bullish / -10 Max Bearish)
(2) -4 or below is a Sell sign. +4 or better is a Buy
Sign.
MOMENTUM ANALYSIS:
Just a reminder…During corrections, momentum is not
giving a very accurate picture – it will reverse when the correction ends.
During the correction, Utilities will generally outperform as will similar Dow
stocks, like Verizon. Momentum here is a short-term call.
TODAY’S RANKING OF
15 ETFs (Ranked Daily)
*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…
TUESDAY MARKET INTERNALS (NYSE DATA)
Market Internals
remained POSITIVE 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).
Using the Short-term indicator in 2018 in SPY would have
made a 5% gain instead of a 6% loss for buy-and-hold. The methodology was Buy
on a POSITIVE indication and Sell on a NEGATIVE indication and stay out until
the next POSITIVE indication. The back-test included 13-buys and 13-sells, or a
trade every 2-weeks on average.
My current stock allocation is about 55% invested in
stocks as of 20 August 2019. This is a conservative balanced position
appropriate for a retiree.
INTERMEDIATE / LONG-TERM INDICATOR
Tuesday,
the VOLUME, VIX, SENTIMENT and PRICE Indicators were neutral. Overall, the
Long-Term Indicator improved to HOLD.
