“Manufacturing activity in New York slowed in early July after a big gain in the previous month. The Federal Reserve Bank of New York says that its Empire State manufacturing index slowed to a reading of 0.55 in July…Any reading above zero points to expansion.” Story at…
http://www.usnews.com/news/business/articles/2016-07-15/factory-activity-in-new-york-region-slows-in-july
RETAIL SALES (MarketWatch)
“Sales at U.S. retailers rose sharply in June, a sign consumers are spending at a healthy clip and propping up the U.S. economy after a slow start earlier in the year. Retail sales rose a seasonally adjusted 0.6% to mark the third straight strong gain…” Story at…
http://www.marketwatch.com/story/us-retail-sales-rise-jump-06-in-june-2016-07-15
CONSUMER PRICE INDEX (Bloomberg)
“The cost of living in the U.S. rose in June, propelled by a rebound in fuel prices and sustained gains in rents that is driving inflation closer to the Federal Reserve’s goal. The consumer-price index climbed 0.2 percent for a second month…” Story at…
http://www.bloomberg.com/news/articles/2016-07-15/consumer-prices-in-u-s-increased-in-june-as-fuel-rents-climbed
INDUSTRIAL PRODUCTION (Reuters)
“U.S. industrial production rose more than expected in June on large gains in automotive manufacturing and utility output, the Federal Reserve said on Friday, a sign that the economy was regaining momentum at the end of the second quarter. Industrial output increased 0.6 percent last month…” Story at…
http://www.reuters.com/article/us-usa-economy-output-idUSKCN0ZV1MT?il=0
MICHIGAN SENTIMENT (CNBC)
“A key measure of consumers' attitudes was lower so far this month, as high-income consumers digested Britain's surprise vote to leave the European Union. The Index of Consumer Sentiment hit 89.5 in July's preliminary reading, the University of Michigan said Friday.” Story at…
http://www.cnbc.com/2016/07/15/consumer-sentiment-preliminary-for-july-2016-reported-by-the-university-of-michigan.html
MARKET REPORT / ANALYSIS
-Friday the S&P 500 was down 0.1% to 2162
-VIX dropped about 1% to 12.67.
-The yield on the 10-year Treasury rose to 1.59%.
The S&P 500 remains “overbought” when using the old stand-by Advance-Decline ratio, but the %-advancing has been falling hard for the last 3-days suggesting further downside ahead; the S&P 500 Index is close to its upper Bollinger Band, (but not overbought yet). The upper 2-standard deviation, Bollinger-Band has been moving up as the Index has climbed so the Bollinger overbought indication remains out of reach. RSI is nearly overbought Friday, at 77 (SMA, 14-day) vs. 80 for overbought. A value above 80 will wake up some traders who are likely to sell. Up-volume is falling hard as is the percentage of stocks advancing. All are bearish indicators short-term.
Indicators remained generally bullish today, little changed from Thursday, but shorter term indicators suggest a retreat – I’m guessing in the 4-5% range. I remain Bullish in the intermediate term; bearish short-term.
MONEY TREND & SHORT TERM TRADING
My short-term Money Trend indicator can be volatile; currently it is giving a bullish reading, but it is slowing and may reverse soon. I will be selling some short positions in SH and QID in my trading portfolio soon depending on market action – I’m waiting for the pullback.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) fell to 59.3% Friday, but it remains “overbought” using the old overbought/oversold index. It was 61.8% Thursday. A number above 50% is usually GOOD news for the markets, but this is too high and suggests a pullback soon.
On a longer term, the 150-day moving average of advancing stocks climbed to 53.6%. A value above 50% generally indicates an up-trend. The McClellan Oscillator (a Breadth measure) dropped from +41 (percentage calculation method) to +33.
New-highs outpaced New-lows. The spread (new-highs minus new-lows) rose to +181 Friday. (It was +236 Thursday.) The 10-day moving average of the change in spread declined to minus-20. In other words, over the last 10-days, on average; the spread has decreased by 20 each day. Market Internals remain neutral on the market, but they have deteriorated over the last 2-days.
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 2014, using these
internals alone would have made a 9% return vs. 13% for the S&P 500 (in on
Positive, out on Negative – no shorting).
LONG TERM INDICATOR
Friday, the Price, Sentiment and VIX indicators were neutral. Volume (a variant of on-balance-volume) was positive although it has been falling for the last 4-days.
MY INVESTED STOCK POSITION:
TSP (RETIREMENT ACCOUNT – GOV EMPLOYEES) ALLOCATIONOn 12 July I increased my invested position in my retirement account to 25% invested in stocks thru an S&P 500 Index fund (“C”-fund in the TSP).
The NTSM system indicated Buy at the 11 Feb bottom; and again 2-days after the bottom on high up-volume; and from 22 Feb thru 25 April. I ignored the early signals convinced that it was a bear market bounce; I ignored more recent signals due to overbought conditions. I’m following my system now, especially since the Index has climbed above my initial sell-point of 2100 on the S&P 500 back in November 2015.
