“New home sales jump 18.0% in August to 504,000 from an
upwardly revised 427,000 (from 412,000) in July… The sales spike in August
pulled new home sales off its smooth 12-month moving average for the first time
in 2014.” Story and charts at…
http://www.briefing.com/Investor/Calendars/Economic/Releases/newhom.htm
STOCKS ABOVE THEIR 200-dMA (Index Indicators)
Only 45% all stocks are above their 200-dMA as of Tuesday’s close.
That’s not good with the S&P 500 very near its highs. It is now more than
1-standard deviation below the mean and that level is a point associated with a
falling market or even a bottom. Given that the S&P 500 is near a high, I
think it suggests that the Index has much further to fall. This is another way of looking at
Breadth. My own analysis of breadth (I measure
as the percentage of stocks advancing) shows that only 44% have gone up over
the last 10-days. Those are worrisome stats for the bulls.
The options crowd disagrees with that assessment; VIX
fell 11% suggesting the pros are turning positive on this market once
again. Tick was positive for only the
second time in the last 12-days – another positive sign. (Tick is a summation of
the last trades of the day. Positive
tick means most stocks moved up on their last trade Wednesday.)
MARKET REPORT
Wednesday, the S&P 500 was UP about 0.8% to 1998 (rounded). VIX was down about 11% to 13.27.
The yield on the 10-year Treasury Note rose slightly to 2.56% at the close.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks
advancing (NYSE) rose to 44% at the close Wednesday.
New-lows outpaced New-highs Wednesday.
The spread (new-highs minus new-lows) was minus-102. (It was -117 MOnday).
The 10-day moving average of change in the spread rose to minus-11. In other
words, over the last 10-days, on average, the spread has decreased by 11 each
day. The smoothed 10-dMA of Up-Volume is
still advancing so the internals remained neutral; otherwise they would have
been negative.
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
Wednesday, the NTSM is HOLD. Volume has turned positive. All other indicators
are neutral, and the VIX fell back to a solidly neutral position. 
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
For my initial discussion see the NTSM blog at:
http://navigatethestockmarket.blogspot.com/2014/05/coppock-curve-says-stock-crash-nowblow.html
ENSCO’s chart doesn’t look good now since it has fallen below prior lows as the oil drillers have not performed well. On the plus side, dividend is 6%. PE is 8.5 so downside is somewhat limited.
TOO CHEAP TO IGNORE (Forbes)
“Ensco has a strong buy rating according to ValuEngine and is 19.6% undervalued with a one-year price target at $50.25.” – Story at…
http://www.forbes.com/sites/investor/2014/09/22/transocean-and-three-other-energy-stocks-too-cheap-to-ignore/?partner=yahootix
