-Tuesday the S&P 500 unchanged at 2169.
-VIX rose about 1% to 13.05. (The Options Boys may be a bit concerned.)
-The yield on the 10-year Treasury dipped to 1.57%.
Tuesday’s value of RSI was 81, indicating “overbought” for the S&P 500 as it has for 5 of the last 7-days. The Index is no longer “overbought” when using the old stand-by Advance-Decline Ratio, but the A/D Ratio continues to decline giving a warning for the future.
Market Internals on the NYSE continue to fall faster that the S&P 500 and this usually indicates a pullback is coming.
My 10-day sum of 16 indicators dropped from +11 to -1, so deterioration is showing up in more indicators.
Tuesday’s beat for Apple is a good news item for the bulls, but the miss for McDonalds was a surprise to the downside. (MCD lost more than 4% on the day.) Futures are up as I write this, but technicals continue to say down.
I’m still 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 remains pointing down; a bearish indication. [I am going to revamp short-term indicators and begin some more serious short-term trading to make back losses on my overzealous short trade, now down more than 10%.]
I’ll cover the short position I added last week unless the S&P 500 falls or opens really big Wednesday. A huge open would indicate a 1% up day and that too would be bearish.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) dipped to 53.8% Tuesday. It was 54.7% Monday. A number above 50% is usually GOOD news for the markets, but this number peaked about 2-weeks ago showing a deterioration in the markets.
On a longer term, the 150-day moving average of advancing stocks climbed to 54%. A value above 50% generally indicates an up-trend. The McClellan Oscillator (a Breadth measure) rose from -4 (percentage calculation method) to +1; essentially unchanged.
New-highs outpaced New-lows. The spread (new-highs minus new-lows) rose to +212 Tuesday. (It was +166 Monday.) The 10-day moving average of the change in spread rose 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, the Price indicator was positive; Sentiment, Volume and VIX indicators were neutral. 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). I added to that position Thursday 21 July bringing my invested total up to 40% in stocks. I expect to add more stocks should we get the anticipated pullback.
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.
