RSI (14-day SMA) was 84 Monday at the close. 70 is overbought for this indicator. Late day selling is continuing as it has for
the past week or so. Internals remained neutral today. I’ll be surprised if the
markets can get through October without some sort of correction, at least in
the 10% area.
MARKET REPORT
Monday, the S&P 500 was UP 0.5%
to 1998 (rounded). VIX was UP about 2% to 11.70.
The yield on the 10-year Treasury Note was down some to 2.38% at the close; the bond Ghouls remain worried.
Volume remains low; today it was about 20% below the daily average for
the past month.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks
advancing (NYSE) fell slightly to 59% at the close Monday. (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 outpaced New-lows Monday. The spread (new-highs minus new-lows) was +144
(It was +81 Friday). The 10-day moving average of change in the spread was +9.
In other words, over the last 10-days, on average, the spread has INCREASED by 9
each day.
Internals remained neutral on the market as the smoothed
10-dMA of UP volume continues to fall.
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
Monday, the NTSM is HOLD. All indicators are neutral.
MY INVESTED STOCK 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.
