“The great global dichotomy, of course, is that while Central Banks have been flushing the globe in liquidity, suppressing interest rates and bailing out banks as fast as possible, the mainstream media continues to tout the strength of the economy.” - Lance Roberts. Commentary at…
https://realinvestmentadvice.com/weekend-reading-the-global-dichotomy/
WELFARE IS THE NEW WORK (Washington Times)
“Peter Ferrara notes that a big instigator for the welfare state expansion has been the decimation of welfare reform laws passed in 1996 [1st Clinton administration]. “It’s infuriating that a law that worked incredibly well in lowering costs and getting the unemployed into the workforce, has been largely gutted,” he concludes.” Commentary at…
http://www.washingtontimes.com/news/2016/jul/31/welfare-is-the-new-work/
My cmt: My wife is a teacher and she has seen this in action. When she chastised a student for not doing any work in her class the “child” said, “I don’t need to work. I’ll be 18 soon and I can collect welfare.”
MARKET REPORT / ANALYSIS
-Monday the S&P 500 was DOWN about 0.1% to 2181.
-VIX rose about 1% to 11.50.
-The yield on the 10-year Treasury was unchanged at 1.58%.
VXX TRADE
Friday, my calm-before-the-storm indicator flashed sell so I bought a small position in VXX. It warned about a storm coming (a quick move down) again Monday so I remain holding VXX.
The Squeeze Play remains Monday on the S&P 500
Bollinger Bands that indicates a breakout is coming – the most likely breakout
direction is down. In addition to a squeeze (upper and lower bands close
together) the Index is only 2 pts below its upper band and that is a bearish
indicator.
My 10-day sum of 16 indicators improved from -26 to -16 Monday. Internals improved, too. Indicators are mixed and the market mood appears to be it will go up forever. That’s usually when there is a reversal down, but we’ll see.
SHORT TRADE
I am still holding short positions.
MONEY TREND INDICATOR
My short-term Money Trend indicator can be volatile; Monday it is flat; a neutral indication.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) rose to 53.9% Monday. It was 52% Friday. A number above 50% is usually GOOD news for the markets.
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) improved from -4 (percentage calculation method) to -2.
New-highs outpaced New-lows. The spread (new-highs minus new-lows) rose to +247 Monday. (It was +244 Friday.) The 10-day moving average of the change in spread rose to 8. In other words, over the last 10-days, on average, the spread has increased by 8 each day. Market Internals remained positive 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
Monday, the Price & VIX indicators were positive; Sentiment & Volume indicators were neutral. The long-term indicator is BUY. The important buy signal was on 22 February 2016 so this is not an important signal. It just means conditions look good.
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.
