RSI (14-day SMA) was 85 Tuesday at the close. 70 is overbought for this indicator. Late day selling is continuing. Over the last 2-weeks, late day selling has
been slightly negative. 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
0.1% to 2000 (rounded).
VIX was DOWN about 0.6% to 11.63.
The yield on the 10-year Treasury Note was up slightly to
2.39% at the close; the bond Ghouls remain worried.
Volume remained low Tuesday; it was about 15% below the average for the month.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks
advancing (NYSE) rose slightly to 61% at the close Tuesday. (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 Tuesday. The spread (new-highs minus new-lows) was +172
(It was +144 Monday). The 10-day moving average of change in the spread was +15.
In other words, over the last 10-days, on average, the spread has INCREASED by 15
each day.
Internals remained neutral on the market as the smoothed 10-dMA of UP volume continues to fall. This may be the result of low volume, since that means that Up-volume is also low, rather than a meaningful indicator. All other Internals look good.
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
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.
