RSI (14-day SMA) hit 75 Thursday. 70 is overbought for this indicator. Late day selling is continuing. I’m not particularly worried because the Internals still look good, but breadth is starting to look too good. I’ll be surprised if the markets can get through October without some sort of correction, at least in the 10% area. It is important for the markets to move up from here, but not in a straight line.
MARKET REPORT
Thursday, the S&P 500 was
UP 0.3% to 1992 (rounded). VIX fell about 0.3% to 11.74.
The yield on the 10-year Treasury Note was down some to 2.41% at the close; the bond Ghouls remain worried.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks
advancing (NYSE) rose to 64% at the close Thursday. (A number above 50% for the 10-day average is
generally GOOD news for the market. The
average in a normally rising market is 53%.) New-highs still outpaced New-lows Thursday. The spread (new-highs minus new-lows) was +157
(It was +123 Wednesday). The 10-day moving average of change in the spread was
+18. In other words, over the last 10-days, on average, the spread has INCREASED
by 18 each day.
Internals remain 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 2013, using these
internals alone would have made a 16% return vs. 30% for the S&P 500 (in on
Positive out on Negative – no shorting).
Of course, few trend-following systems will do well in an extreme
low-volatility, straight-up year like 2013.
NTSM
Thursday, the NTSM is
HOLD. Volume is now positive; all other indicators
are neutral.
MY INVESTED POSITION
I made a BUY call on Monday, 18 August 2014 because the
charts were looking better; therefore, I upped my invested percentage to 50%
invested in stocks on Tuesday 19 August.
The 5-10-20 Timer and Market Internals
both gave positive signals on 19 August confirming the previous day’s Buy
signal.--INDIVIDUAL STOCKS FROM A VALUE HOUND--
ENSCO (ESV): BUY
For my initial discussion see the NTSM blog at:
http://navigatethestockmarket.blogspot.com/2014/05/coppock-curve-says-stock-crash-nowblow.html
ESV has successfully tested its recent low as selling has declined at the low. Dividend is 6%. PE is 8.5 so downside is limited. I rate it BUY again even though you can find a lot of negative talk about the drillers.
ENSCO RELEASES FLEET REPORT (SeekingAlpha)
“Offshore drillers bounce [ESV up 2.3% Wednesday] as Ensco updates fleet Status: Ensco released its latest fleet status report yesterday, and it seems to be helping lift other offshore drillers…ESV's update was highlighted by new contracts within the jackup fleet, along with incremental upgrade and inspection related downtime across the fleet in H2 2014 and FY 2015, Johnson Rice analysts say…”
