Friday, the S&P 500 was
UP about 1.2% to 1932 (rounded).
VIX fell about 5% to 15.77. The yield on the 10-year Treasury Note was up slightly to 2.42% at the close; the bond Ghouls remain worried.
STOCKS ABOVE THEIR 200 DAY MOVING AVERAGE
The percent of stocks on the NYSE above their 200-dMA fell
slightly to 48% Thursday (data is a day late).
61% is the trouble point for this stat.
RSI
RSI switched to neutral at 35 as of Friday. Oversold is
below 30.
BOUNCE TIME?
The S&P 500 finally bounced up today. Many credited the end of Russian exercises
along the Ukraine border, but technically, the market was due for a bounce. The number of
investors betting long (%-bulls) in select Rydex long/short funds is still declining. (This is my Sentiment indicator.) This
indicates that there is little dip-buying going on as of Thursday. Perhaps this will change Friday. (Data is available
late Friday.)
A Bounce in a correction only lasts a couple of days. A Bounce in a pullback continues up signaling
a break in the down trend; so we’ll see what happens to this
pullback/correction next week.
STATISTICALLY SIGNIFICANT? NO.
My system is based on Statistical Analysis of the size of moves in
price-volume. The size of today’s move did not meet criteria for a
statistically-significant day based on multiples of standard deviation. A statistically significant day would suggest
a down day for Monday. Usually, a
statistically significant day would be around a 1% move, but because of some
recent bouncing around, it wasn’t. Still, many will see the 1% move and bet
against it, by going short. (The “bet
against a big move the day after” strategy is well known.) In a self-fulfilling
move, they might be right.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks
advancing (NYSE) popped up to 44% at the close Friday. (A number below 50% for the 10-day average is
generally BAD news for the market. The
average in a normally rising market is 53%.)
New-lows still outpaced New-highs Friday so all is not
well with this market (at least as of today).
The spread (new-highs minus new-lows) was minus-18. (It was minus-21 Thursday.)
The 10-day moving average of change in the spread remained minus -5. In other words, over the last 10-days, on
average, the spread has DECREASED by 5 each day. This stat was -20 three-days
ago so new-hi/new-lo data has been improving. The smoothed 10-dMA of up-volume was
UP today and the Internals improved to neutral 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
The NTSM analytical model for LONG-TERM MONEY remaned
SELL Friday. Indicators are as follows: SENTIMENT, PRICE and VIX are
neutral. VOLUME and the PANIC Indicator
are negative so the overall NTSM rating is negative, but just barely.
MY INVESTED POSITION
I reduced my investment in stocks to 30% on 1 August because
of the NTSM indicators turned negative at the close on 31 July. 30% invested protects the portfolio. If there
is a 50% crash I would only lose 15% of the portfolio value. At the same time, if the market goes up, I
will make some gains. No system is perfect and the NTSM system has
underperformed a buy and hold strategy in the Fed driven market currently in
place.--INDIVIDUAL STOCKS FROM A VALUE HOUND--
ENSCO (ESV): HOLD (Earnings announce 31 July)
For my initial discussion see the NTSM blog at:
http://navigatethestockmarket.blogspot.com/2014/05/coppock-curve-says-stock-crash-nowblow.html
