Tuesday, the S&P 500 was down about 0.7% to 1988 (rounded).
VIX was up about 7% to 13.50.
The yield on the 10-year Treasury Note rose slightly 2.50% at the close; the bond Ghouls remain worried. (This may actually be foreign demand driving down yields rather than fear of an economic decline.)
CORRECTION SOON
The daily up/down moves in the market continue to be
abnormally small and that usually leads to a pullback of some kind. I doubt
that it will be the “big one”. RSI (14-day SMA) was 55 Tuesday at the close, but it was 90
just 5-days ago. 70 is the overbought value for this indicator. There was late
day selling today. Market Internals turned down.
BUT…STATISTICALLY SIGNIFICANT DAY TUESDAY – SUGGESTS AN
UP DAY TOMORROW
Tuesday was statistically-significant in my system. The just means the size of today’s move was
higher than the recent normal as measured by standard deviation from the
norm. It takes a smaller move now to get
a statistically significant day, because the daily moves recently in price and
volume have been much smaller than usual. That implies Wednesday will be an
up-day about 62% of the time. I should
note that Friday was a statistically-significant up-day and that implied a down
day for Monday and indeed, that is what we saw. All of these stats are based on the S&P
500.
I might note that up/down swings with more frequent
statistically significant days are typical of a top; but not necessarily a
major top. This could be just another 5%
dip to the lower trend line.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks
advancing (NYSE) fell to 49% at the close Tuesday.
(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-highs outpaced New-lows Tuesday. The spread (new-highs minus new-lows) was +23 (It was +91 Monday). The 10-day moving
average of change in the spread fell to minus-12. In other words, over the last
10-days, on average, the spread has decreased by 12 each day. Internals turned negative on the market today.
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
Tuesday, the NTSM is HOLD. The volume indicator is Positive. All other
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. 50% is Fully invested for me since I am semi-retired. --INDIVIDUAL STOCKS FROM A VALUE HOUND--
ENSCO (ESV): BUY…Sort of…see below
For my initial discussIon see the NTSM blog at:
http://navigatethestockmarket.blogspot.com/2014/05/coppock-curve-says-stock-crash-nowblow.html
Dividend is 6%. PE is 8.5 so downside is limited.
“Ensco attracts heavy call buying…” (Yahoo Finance) 9/8/2014
Looks like the options boys liked it at Monday’s price.
http://finance.yahoo.com/news/ensco-attracts-heavy-call-buying-104523422.html
