FOMC MINUTES (MarketWatch)
“Federal Reserve officials were more worried about the
U.S. economy by the time they met in mid-September, according to minutes of the
central bank’s meeting released Wednesday. “Participants generally judged that
downside risks to the outlook for economic activity had increased somewhat
since their July meeting, particularly those stemming from trade policy
uncertainty and conditions abroad,” the minutes said.” Story at…
JOLTS (Reuters)
“U.S. job openings fell to a 1-1/2-year low in August and
hiring slipped, suggesting employment growth was slowing mostly because of
ebbing demand for labor. Job openings, a measure of labor demand, dropped by
123,000 to a seasonally adjusted 7.05 million in August…” Story at…
CRUDE INVENTORIES (OilPrice.com)
“As crude oil entered its third day of price declines in
a row, the Energy Information Administration added to already existing pressure
by reporting a
build in crude oil inventories of 2.9 million barrels for the week to October
4.” Story at…
MARKET REPORT / ANALYSIS
Wednesday the S&P 500 rose about 0.9% to 2919.
-VIX fell about 8% to 18.64.
-The yield on the 10-year Treasury rose to 1.555.
close enough today.
My daily sum of 20 Indicators improved from -10 to
-6 (a positive number is bullish; negatives are bearish) while the 10-day
smoothed version that negates the daily fluctuations dropped from -57 to
-60. (These numbers sometimes change after I post the blog based on data that
comes in late.) A reminder: Most of these indicators are short-term.
My bullish lean is based on the chart, recent price
action and internals; however, if we close much lower than today’s close, I’ll
have to re-think my position. The
S&P 500 is only 2.5% above the 200-dMA. That will provide support to the
market unless we have bad news on the trade front.
TOP / BOTTOM INDICATOR SCALE OF 1 TO 10 (Zero is a
neutral reading.)
Today’s Reading: 0
Most Recent Day with a value other than Zero: +2 on 3
October.
(1) +10 Max Bullish / -10 Max Bearish)
(2) -4 or below is a Sell sign. +4 or better is a Buy
Sign.
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…
WEDNESDAY 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).
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 60% invested in
stocks as of 7 Oct 2019 (up from 50%). This is a conservative balanced position
appropriate for a retiree.
INTERMEDIATE / LONG-TERM INDICATOR
Wednesday, the VOLUME, VIX, PRICE and
SENTIMENT Indicators were neutral. Overall, the Long-Term Indicator remained
HOLD.
