HOUSING (MarketWatch)
“Housing starts jumped in June but from downwardly-revised levels earlier in the year, pointing to a market for newly-constructed homes that continues to grind forward slowly and steadily. Starts were up 4.8% to a seasonally adjusted annual pace of 1.19 million…” Story at…
http://www.marketwatch.com/story/housing-starts-rise-48-to-annual-119-million-pace-in-june-2016-07-19
OPINION
“The single event that changed my life more than any other was TARP, aka the banker bailouts. The unfairness, extreme greed and selfishness with which the status quo bailed out financial criminals while leaving the public high and dry changed me forever. When it comes to shaping American history, it is equal in importance to the attacks of 9/11.” – Mike Krieger
http://www.zerohedge.com/news/2016-07-19/america-being-divided-and-conquered-oblivion
My cmt: Radical, but thought provoking.
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 dipped 0.14% to 2164.
-VIX dropped about 4% to 11.97.
-The yield on the 10-year Treasury dipped to 1.56%.
VIX dropped below 12 Tuesday and that has signaled trouble for the markets going back to 2013. It seems to be part of the cycle - low VIX prior to a pullback usually in the 5% range.
Volume was low again today; more importantly, up-volume has been falling for the last 2-weeks and that’s a bearish sign.
Tuesday’s value of RSI was 87 and that is an “overbought” indication; this puts on more pressure on the bulls. The S&P 500 also remains “overbought” when using the old stand-by Advance-Decline Ratio.
I’m guessing we see a pullback in the 4-5% range. I remain Bullish in the intermediate term; bearish short-term. A retracement down is due now.
MONEY TREND & SHORT TERM TRADING
My short-term Money Trend indicator can be volatile; Tuesday it is sharply down and giving a bearish reading. I added to short positions Monday using 2x short ETF’s. I hope to make some profits now to counter losses I expect to realize when I sell short positions I have held for a while. I don’t expect to short for long; the trend is up.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) improved to 60.9% Tuesday, but it remains “overbought” using the old overbought/oversold index. It was 59.3% Monday. A number above 50% is usually GOOD news for the markets, but this is too high and suggests a pullback.
On a longer term, the 150-day moving average of advancing stocks climbed to 53.9%. A value above 50% generally indicates an up-trend. The McClellan Oscillator (a Breadth measure) dropped from +36 (percentage calculation method) to +18.
New-highs outpaced New-lows. The spread (new-highs minus new-lows) dipped to +157 Tuesday. (It was +179 Monday.) The 10-day moving average of the change in spread improved to minus-5. In other words, over the last 10-days, on average; the spread has decreased by 5 each day. Market Internals remain 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 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
Tuesday, Sentiment, Price and VIX indicators were neutral; Volume was positive. The long-term indicator is HOLD.
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.
