RSI (14-day SMA) was 70 Friday at the close. 70 is overbought for this indicator. Late day selling is continuing as it has for the past week or so. Internals turned neutral today. I’ll be surprised if the markets can get through October without some sort of correction, at least in the 10% area, but there is no indication that a correction is starting now. As of Thursday, stocks had been UP 8-days out of the last 10 so a down day Friday was to be expected.
MARKET REPORT
Friday, the S&P 500 was
down 0.2% to 1988 (rounded). VIX fell about 2% to 11.47.
The yield on the 10-year Treasury Note was down some to 2.40% at the close; the bond Ghouls remain worried.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks
advancing (NYSE) fell to 60% at the close Friday. (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 Friday. The spread (new-highs minus new-lows) was +81
(It was +157 Thursday). The 10-day moving average of change in the spread was +10.
In other words, over the last 10-days, on average, the spread has INCREASED by 10
each day.
Internals switched to neutral on the market as the smoothed
10-dMA of UP volume declined.
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
Friday, the NTSM is
HOLD. All 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.
