Stock Market Analysis… ETF Trading … Dow 30 Ranking

“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.

 

No news is good news…

 

MARKET REPORT / ANALYSIS         

-Friday the S&P 500 rose about 0.4% to 3164 (another new-high).

-VIX rose about 2% to 11.75. (The Options Boys may be skeptical of this rally.)

-The yield on the 10-year Treasury rose to 1.765.

 

Trading was shortened today for the holiday. As a result, we saw low trading volumes, so today’s data doesn’t mean much.

 

We can, however, look at recent highs and make an important conclusion.  At new all-time highs on the S&P 500, the 5-year average of stocks making new-highs is 6.7% (as a percentage of stocks on the NYSE). If the percentage of stocks making new-highs at the S&P 500 all-time high was low, we would be concerned that the advance was too narrow and didn’t involve enough stocks.  At the all-time high on 27 Nov, 5.5% of stocks on the NYSE made new highs.  This is broad enough that we are not currently worried about the breadth of the market.

 

My daily sum of 20 Indicators slipped from +13 to +11 (a positive number is bullish; negatives are bearish) while the 10-day smoothed sum that negates the daily fluctuations rose from +16 to +30 (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.

 

While a pullback or pause is suggested by a few indicators, Seasonality is bullish for the next month and Sentiment is high, but not extreme. Overall, indicators are quite bullish. The markets may keep moving up for a while longer. It’s anyone’s guess regarding what will cause a dip or when it will occur. I think we could see a dip anytime, probably starting Monday, but I expect that it will be bought so any pullback should be relatively small – say down to the 50-dMA, about 3-4% lower than current values.

 

I remain bullish.

 

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: -1 on 20 November (RSI was overbought).

(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…

http://navigatethestockmarket.blogspot.com/p/exchange-traded-funds-etf-ranking.html

 

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.

For more details, see NTSM Page at…

https://navigatethestockmarket.blogspot.com/p/a-system-for-trading-dow-30-stocks-my_8.html

 

FRIDAY 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 60% invested in stocks as of 7 Oct 2019 (up from 50%). This is a conservative balanced position appropriate for a retiree. You may wish to have a higher or lower % invested in stocks depending on your risk tolerance.

 

INTERMEDIATE / LONG-TERM INDICATOR

Friday, the VIX and PRICE indicators were positive; the SENTIMENT and VOLUME Indicators were neutral. Overall, the Long-Term Indicator remained BUY. The important BUY was the one we issued 29 August; we reinforced that bullish view again on 3 October. Today’s BUY signal just means that conditions are good. Sometimes the NTSM will issue a buy-signal at a top. I don’t think that is the case this time – I remain bullish. The falling VIX is a bullish signal, though we are overdue for a small pullback.    

FED Beige Book … Jobless Claims … GDP-Second Estimate … Durable Orders … Chicago PMI … Personal Income… PCE Inflation … Crude Inventories … Stock Market Analysis… ETF Trading … Dow 30 Ranking

“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.

 

Have a Happy Thanksgiving!

 

FED BEIGE BOOK (MarketWatch)

The U.S. economy expanded “modestly” from October through mid-November and the outlook “generally remained positive,” according to the Federal Reserve’s latest findings. The Fed’s Beige Book was slightly more upbeat compared to its previous assessment last month, when the central bank said the economy was expanding at a “slight to modest pace.” Story at…

https://www.marketwatch.com/story/fed-beige-book-sees-slight-pickup-in-us-economy-just-ahead-of-the-holiday-season-2019-11-27

 

JOBLESS CLAIMS (MarketWatch)

The number of people who applied for unemployment benefits fell sharply in the week before the U.S. Thanksgiving holiday, putting jobless claims back near historic lows and reflecting the persistent strength in the U.S. labor market. Initial jobless claims declined by 15,000 to 213,000 in the seven days ended Nov. 23…” Story at…

https://www.marketwatch.com/story/jobless-claims-tumble-15000-to-213000-and-fall-back-near-postrecession-low-2019-11-27

 

GDP (Reuters)

“U.S. economic growth picked up slightly in the third quarter, rather than slowing as initially reported, and there are signs the downturn in business investment could be drawing to a close….Gross domestic product increased at a 2.1% annualized rate, the Commerce Department said in its second estimate of third-quarter GDP.” Story at…

https://www.reuters.com/article/us-usa-economy/us-third-quarter-gdp-growth-raised-business-investment-stabilizing-idUSKBN1Y11LI

 

DURABLE ORDERS (CNBC)

“Orders to U.S. factories for big-ticket manufactured goods tumbled in September by the largest amount in four months….The Commerce Department said Thursday that orders for durable goods dropped 1.1% in September…” Story at…

https://www.cnbc.com/2019/10/24/us-durable-goods-orders---september-2019.html

 

CHICAGO PMI (MarketWatch)

“A measure of economic activity in the Midwest showed persistent contraction but did improve slightly in November…The Chicago Purchasing Management Index registered at 46.3 in November from an unrevised 43.2 in October.” Story at…

https://www.marketwatch.com/story/chicago-pmi-shows-regions-economic-health-contracting-but-not-as-weak-as-october-2019-11-27

 

PERSONAL INCOME / PCE INFLATION (Nasdaq)

“The Commerce Department released a report on Wednesday showing U.S. personal income came in nearly flat in the month of October, while personal spending rose in line with economist estimates…A reading on inflation said to be preferred by the Federal Reserve [PCE] showed the annual rate of core consumer price growth slipped to 1.6 percent in October from 1.7 percent in the previous month.” Story at…

https://www.nasdaq.com/articles/u.s.-personal-income-unexpectedly-unchanged-in-october-2019-11-27

 

CRUDE INVENTORIES (OilPrice.com)

“Oil fell about 1% on Wednesday after a report showing U.S. crude inventories grew unexpectedly last week and gasoline stocks surged, but optimism that a U.S.-China trade deal would be reached soon limited losses.” Story at…

https://www.cnbc.com/2019/11/27/oil-markets-us-china-trade-deal-us-oil-stocks-in-focus.html

 

MARKET REPORT / ANALYSIS         

-Wednesday the S&P 500 rose about 0.4% to 3164 (another new-high).

-VIX rose about 2% to 11.75. (The Options Boys may be skeptical of this rally.)

-The yield on the 10-year Treasury rose to 1.765.

 

I’ve posted charts and a link to Chris Ciovacco’s analysis recently. See…

https://www.youtube.com/watch?v=qSv1WQueby4&feature=youtu.be

His thesis is that the correction low on 24 Dec 2018 was a major correction low equal in strength (though not %-loss) to the Dot.com and Financial crashes of 2001 and 2009. As such, he has suggested that we are now in a secular bull-market and we must recognize that gains in the market could be much higher than market participants currently expect. (I am surprised to see traders still calling for massive losses and a stock market crash soon.) Looking at my stats, I see that the 10-day % of stocks advancing on the NYSE reached a low of 32% at the 24 Dec 18 low.  That was lower than the value of 40%-advancing at the 2009 crash low. Chris Ciovaccio seems to have a good point. We must be prepared for a downturn; but also open to potentially big gains ahead.

 

For now, Holiday and end-of-month / first-of-month gains are underway with some fear-of-missing-out action too. I’ve been warning of a short-term drop/top in the S&P 500 based on statistical analysis of price-volume since early November; that warning is still valid based on a continued low reading of statistical moves in price-volume. Perhaps by Monday we’ll see some weakness.

 

My daily sum of 20 Indicators improved from +11 to +13 (a positive number is bullish; negatives are bearish) while the 10-day smoothed sum that negates the daily fluctuations rose from +2 to +16 (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.

 

While a pullback or pause is suggested by a few indicators, Seasonality is bullish for the next month and Sentiment is high, but not extreme. Overall, indicators are quite bullish. The markets may keep moving up for a while longer. It’s anyone’s guess regarding what will cause a dip or when it will occur. I think we could see a dip anytime, probably starting Monday, but I expect that it will be bought so any pullback should be relatively small – say down to the 50-dMA, about 3-4% lower than current values.

 

I remain bullish.

 

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: -1 on 20 November (RSI was overbought).

(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…

http://navigatethestockmarket.blogspot.com/p/exchange-traded-funds-etf-ranking.html

 

TODAY’S RANKING OF THE DOW 30 STOCKS (Ranked Daily)

Apple is up 20% over the last 2-months. It remains #1 in the momentum ranking.

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…

https://navigatethestockmarket.blogspot.com/p/a-system-for-trading-dow-30-stocks-my_8.html

 

WEDNESDAY 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 60% invested in stocks as of 7 Oct 2019 (up from 50%). This is a conservative balanced position appropriate for a retiree. You may wish to have a higher or lower % invested in stocks depending on your risk tolerance.

 

INTERMEDIATE / LONG-TERM INDICATOR

Wednesday, the VIX and PRICE indicators were positive; the SENTIMENT and VOLUME Indicators were neutral. Overall, the Long-Term Indicator remained BUY. The important BUY was the one we issued 29 August; we reinforced that bullish view again on 3 October. Today’s BUY signal just means that conditions are good. Sometimes the NTSM will issue a buy-signal at a top. I don’t think that is the case this time – I remain bullish. The falling VIX is a bullish signal, though we are overdue for a small pullback.    

Consumer Confidence … New Home Sales … Stock Market Analysis… ETF Trading … Dow 30 Ranking

"Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.

 

CONSUMER CONFIDENCE (Conference Board)

“The Conference Board Consumer Confidence Index® decreased in November, following a slight decline in October. The Index now stands at 125.5 (1985=100), down from 126.1 in October…"Consumer confidence declined for a fourth consecutive month, driven by a softening in consumers' assessment of current business and employment conditions," said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. "The decline in the Present Situation Index suggests that economic growth in the final quarter of 2019 will remain weak. However, consumers' short-term expectations improved modestly, and growth in early 2020 is likely to remain at around 2 percent. Overall, confidence levels are still high and should support solid spending during this holiday season." – Press Release at…

https://www.prnewswire.com/news-releases/the-conference-board-consumer-confidence-index-declined-slightly-in-november-300965428.html

 

NEW HOME SALES (Bloomberg)

“Buyers snapped up new U.S. homes over the past two months at the fastest pace in more than 12 years, adding to signs of sturdy housing demand amid lower prices and borrowing costs.” Story at…

https://www.bloomberg.com/news/articles/2019-11-26/u-s-new-home-sales-post-two-best-months-in-more-than-12-years

 

MARKET REPORT / ANALYSIS         

-Tuesday the S&P 500 rose about 0.2% to 3141 (another new-high).

-VIX dipped about 3% to 11.54.

-The yield on the 10-year Treasury dipped to 1.738.

 

I’ve been warning of a drop/top in the S&P 500 based on statistical analysis of price-volume since early November; that warning is still valid.

 

My daily sum of 20 Indicators improved from +10 to +11 (a positive number is bullish; negatives are bearish) while the 10-day smoothed sum that negates the daily fluctuations rose from -10 to -2 (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.

 

While a pullback or pause is suggested by a few indicators, Seasonality is bullish for the next month and Sentiment is high, but not extreme. Overall, indicators are quite bullish. The markets may keep moving up for a while longer. It’s anyone’s guess regarding what will cause a dip or when it will occur. I think we could see a dip anytime, but I expect that it will be bought so any pullback should be relatively small – say down to the 50-dMA, about 3-4% lower.

 

I remain bullish.

 

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…

http://navigatethestockmarket.blogspot.com/p/exchange-traded-funds-etf-ranking.html

 

TODAY’S RANKING OF THE DOW 30 STOCKS (Ranked Daily)

Apple is up 18% over the last 2-months. It remains #1 in the momentum ranking.

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…

https://navigatethestockmarket.blogspot.com/p/a-system-for-trading-dow-30-stocks-my_8.html

 

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 60% invested in stocks as of 7 Oct 2019 (up from 50%). This is a conservative balanced position appropriate for a retiree. You may wish to have a higher or lower % invested in stocks depending on your risk tolerance.

 

INTERMEDIATE / LONG-TERM INDICATOR

Tuesday, the VIX and PRICE indicators were positive; the SENTIMENT and VOLUME Indicators were neutral. Overall, the Long-Term Indicator remained BUY. The important BUY was the one we issued 29 August; we reinforced that bullish view again on 3 October. Today’s BUY signal just means that conditions are good. Sometimes the NTSM will issue a buy-signal at a top. I don’t think that is the case this time – I remain bullish. The falling VIX is a bullish signal, though we are overdue for a small pullback.    

Shiller PE … Impeachment … Stock Market Analysis … ETF Trading … Dow 30 Ranking

“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.

 

SHILLER VALUATIONS – DO THEY MEAN ANYTHING?

“We should keep an open mind regarding what valuations may look like 10 to 20 years down the road.” – Chris Ciovacco, Ciovacco Capital Management. From a YouTube presentation by Ciovacco Capital Management at…

https://www.youtube.com/watch?v=qSv1WQueby4&feature=youtu.be

In the video, Chris notes that if you were trading stocks based on Shiller PEs in the 60’s thru 80’s, one might have waited for a better buying opportunity after 1988; but there wasn’t one and you would have missed an historic bull run. The point is that we really don’t know what the Shiller PE should be in the future.  As I have noted previously, we have more investors chasing fewer stocks; supply and demand suggests that one should expect higher PEs in the future.

 

IMPEACHMENT (CNBC)

“President Trump claimed that the Democrats’ impeachment efforts are hurting the stock market, but strategists say that’s not so.” Story at…

https://www.cnbc.com/2019/10/31/impeachment-not-impacting-the-stock-market-yet-but-it-could-soon.html

My cmt: The chances that Trump will be removed are miniscule; proving quid-pro-quo won’t do it. Governments apply pressure on other Governments all the time. The problem for the Democrats is that they must prove to Republican Senators that President Trump’s actions were not for legal investigative purposes but instead, were solely Political. Biden’s son received millions to sit on a Ukrainian oil firm’s board of Directors for which he has no qualifications. When investigations began on the oil company, Biden’s son went to the State department. Questions remain: To what extent did he intervene? Is Biden’s son a registered Lobbyist? What duties did he perform entitling him to a $600,000 per year salary? It would seem that the President has the authority pressure Ukraine to investigate, including refusing aid if they refused. The following letter provides a more concise comment:

 

WSJ- LETTER TO THE EDITOR (WSJ)

“Let’s see: A president suspects corruption involving an elected politician and a foreign country. Key witnesses and records are located in the foreign country and outside the legal jurisdiction of the FBI and Justice Department. He asks the foreign country to help investigate. This is wrong and impeachable because (a) the target is a Democrat; (b) our elected officials are allowed to use their position to enrich their families; or (c) the president is Donald Trump? You decide.” - Geoff Smith. From…

https://www.wsj.com/articles/see-what-you-want-in-the-trump-zelensky-transcript-11569881440?mod=searchresults&page=1&pos=9

 

MARKET REPORT / ANALYSIS         

-Monday the S&P 500 rose about 0.8% to 3134 (another new-high).

-VIX dipped about 4% to 11.87.

-The yield on the 10-year Treasury dipped to 1.753.

 

I’ve been warning of a drop/top in the S&P 500 based on statistical analysis of price-volume since early November. While we still see the warning, it is important to note that this indicator is very short-term, so it isn’t calling for a crash or severe drop. A move in the 3-5% range would clear this indicator, assuming we see the >1% 1-day move during the pullback. The other possibility is that we’ll see more variation in the data that would clear the indicator without a big drop; however, that is not the most likely outcome.

 

My daily sum of 20 Indicators improved from -3 to +10 (a positive number is bullish; negatives are bearish) while the 10-day smoothed sum that negates the daily fluctuations rose from -19 to -10 (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. These are bullish improvements.

 

The S&P 500 closed at the upper trend-line on a statistically significant up-day today. That just means that the price-volume move exceeded my statistical parameters. Statistics show that a statistically significant up-day is followed by a down-day about 60% of the time. It also sometimes indicates a top. This may be signaling the start of a minor dip of some kind. However, I am not too worried; both Short-term and Long-term indicators are currently Bullish.

 

While a pullback or pause is suggested by a few indicators, Seasonality is bullish for the next month and Sentiment is not overly high. Overall, indicators are quite bullish. The markets may keep moving up for a while longer.

 

I remain bullish.

 

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…

http://navigatethestockmarket.blogspot.com/p/exchange-traded-funds-etf-ranking.html

 

TODAY’S RANKING OF THE DOW 30 STOCKS (Ranked Daily)

Apple is up 18% over the last 2-months. It remains #1 in the momentum ranking.

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…

https://navigatethestockmarket.blogspot.com/p/a-system-for-trading-dow-30-stocks-my_8.html

 

MONDAY MARKET INTERNALS (NYSE DATA)

Market Internals improved to 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 60% invested in stocks as of 7 Oct 2019 (up from 50%). This is a conservative balanced position appropriate for a retiree. You may wish to have a higher or lower % invested in stocks depending on your risk tolerance.

 

INTERMEDIATE / LONG-TERM INDICATOR

Monday, the VIX and PRICE indicators were positive; the SENTIMENT and VOLUME Indicators were neutral. Overall, the Long-Term Indicator remained BUY. The important BUY was the one we issued 29 August; we reinforced that bullish view again on 3 October. Today’s BUY signal just means that conditions are good. Sometimes the NTSM will issue a buy-signal at a top. I don’t think that is the case this time – I remain bullish.    

ETF Trading Momentum Analysis

Here’s the ETF Momentum data thru Friday, 22 November.  As of today, the NTSM Blog is up to date and I’ll return to full posting next week.

 

MOMENTUM ANALYSIS:

FRIDAY’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…

http://navigatethestockmarket.blogspot.com/p/exchange-traded-funds-etf-ranking.html

Heritage Capital Commentary … Raymond James Commentary Excerpt … Stock Market Analysis… ETF Trading … Dow 30 Ranking

“Trade what you see; not what you think.” – The Old Fool, Richard McCranie, trader extraordinaire.

 

The NTSM Blog is back, almost in full swing...

 

HERITAGE CAPITAL COMMENTARY EXCERPT (Heritage Capital)

“…the Dow, S&P 500 and NASDAQ 100 all look similar and very constructive as they have all already broken out to new highs and are now working that off. Many, many times a security will have an obvious break out, only to stop in short order for a pause to refresh that works its way back to that key break out level. Sometimes, the instrument will regather itself and surge higher while occasionally it will completely fail after sucking in the bulls and move quickly in the opposite direction.” – Paul Schatz, President, Heritage Capital. Commentary at… 

http://investfortomorrowblog.com/archives/4541

 

LARRY ADAM COMMENTARY EXCERPT (Raymond James)

“…the National Retail Federation expects retail sales during November and December will rise ~4% from 2018 levels. This leads us to believe that the US economy will continue its slow but steady foot race… a 75 basis point cut has historically been a positive for the equity market, leading to a 12-month average forward return of ~23%...Seasonal trends should continue to be supportive of the equity market, since over this same timeframe, the S&P 500 has posted an average return of 8.0% from November to April and has been positive over 85% of the time!” Full Commentary at…

https://www.raymondjames.com/commentary-and-insights/larry-adam/2019/11/22/weekly-investment-strategy

 

MARKET REPORT / ANALYSIS         

-Friday the S&P 500 rose about 0.2% to 3110.

-VIX slipped about 6% to 12.34.

-The yield on the 10-year Treasury was unchanged at 1.773%.

 

Well…it’s been a month since I had real time to sit down and examine the numbers in detail, so let’s start with a run-down of some of the important indicators.

 

BEAR SIGNS

-New-high/new-low data is headed lower.

-Money Trend is falling.

-Statistically, the S&P 500 remains too calm (measured by daily moves in price-volume) suggesting down moves ahead and a large move down (>1% in a day) to break the market action that is too calm.

-MACD of Price.

-MACD of Breadth.

-Smart Money (based on late-day-action) is pointing down.

-Cyclical Industrials are underperforming the S&P 500 over the past 2-weeks. When investors are worried, cyclicals underperform. (This divergence is not big now, so this isn’t a strong indication.)

-New-Highs are slipping.

-Only 49.2% of stocks on the NYSE have been up over the last 10-days.

 

NEUTRAL

-Breadth vs the S&P 500 index shows that the Index ahead of most stocks on the NYSE, but not to the extent that we can put this indicator in the Bear category.

-RSI was overbought 7 thru 20 Nov, but it has slipped and is now neutral.

-Bollinger Bands are elevated, but neutral.

-Sentiment is elevated, but not in the red zone.

-Fosback High-Low Logic Index indicators.

-There are currently no Top-indicators in bearish mode, though some are close.

-Sentiment is elevated, but not in the red zone.

 

BULL SIGNS

-Up moves have been bigger than down moves over the last month.

-VIX is falling nicely.

-The 5-10-20 Timer is still bullish.

-Advancing volume has been up over the last 10-days.

 

Overall, we see the following:

My daily sum of 20 Indicators improved from -6 to -3 (a positive number is bullish; negatives are bearish) while the 10-day smoothed sum that negates the daily fluctuations declined from -15 to -19 (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.

 

I remain bullish longer term; Short-term the market remains unsettled. I’m not sure where the market will go from here (up, down or sideways), but I don’t see a major drop.

 

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: -1 on 20 November.

(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)

 

I’ll work on the ETF data soon. Dow 30 is now up to date.

 

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…

http://navigatethestockmarket.blogspot.com/p/exchange-traded-funds-etf-ranking.html

 

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…

https://navigatethestockmarket.blogspot.com/p/a-system-for-trading-dow-30-stocks-my_8.html

 

FRIDAY MARKET INTERNALS (NYSE DATA)

Market Internals improved to NEUTRAL on the market. Internals had been negative for the previous 4 trading sessions

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. You may wish to have a higher or lower % invested in stocks depending on your risk tolerance.

 

INTERMEDIATE / LONG-TERM INDICATOR

Friday, the VIX and PRICE indicators were positive; the SENTIMENT and VOLUME Indicators were neutral. Overall, the Long-Term Indicator improved to BUY. The important BUY was the one we issued 29 August; we reinforced that bullish view again on 3 October. Today’s BUY signal just means that conditions are improving.