I will be busy Monday morning and unable to make any
portfolio changes even if I did like the market action Monday.
The overbought condition bothers me as it relates to
advancing stocks vs declining stocks over the most recent 10-day period (the
old overbought/ oversold ratio). It has been overbought for the last 7-trading
days.
Further, I noticed that the 100-dMA of the percentage of
stocks advancing was at an extreme high of 56.3% last Wednesday. That is the highest value for the 100-day going
all the way back to August of 2010. That’s as far as my current data goes and I’m
too lazy to track it further back thru some of my older files. This is just more
evidence that the Index is due for a pullback of some sort.
ANOTHER DEATH CROSS FOR THE DOW TRANSPORTS (CNBC)
“This does not mean a "sell signal" for
investors, Gordon said. Rather, he sees the crude rally as an indication of a
broader recovery…” Story at…
http://www.cnbc.com/2016/07/08/transports-hit-by-airline-woes-which-wont-last-much-longer-trader.html
My cmt: In June of 2015 when the 50-dMA of Transports
crossed below its 200-dMA I suggested that it wasn’t the end of the world
because freight haulers and trucking remained in good condition. Now, the CASS
freight Index shows a drop in shipments of nearly 6% year-over-year. Fuel prices are up but not drastically. The death-cross in transports is not good
news.
PROS DON’T LIKE STOCKS OR BONDS (Marketwatch)
“The outlook for U.S. stocks is terrible. GMO’s central
forecast — which is a directional estimate more than a precise prediction —
warns that U.S. large- and small-cap stock indices are now both so overpriced
compared to history that they will probably lose value, compared to inflation,
over the next seven or so years.” Story at…
http://www.marketwatch.com/story/investment-firm-that-called-the-2008-09-crash-doesnt-like-most-stocks-or-bonds-2016-07-08
