“Labor data continued to come up roses in June, as the number of vacancies in the U.S. workforce sat near an all-time high at 5.6 million and new hires hit their highest mark since March at 5.1 million, according to a report published Wednesday by the Bureau of Labor Statistics.” Story at…
http://www.usnews.com/news/articles/2016-08-10/openings-hiring-skewed-toward-low-paying-jobs-says-jolts-report
CRUDE INVENTORIES (Street Insider)
“U.S. crude oil imports averaged 8.4 million barrels per day last week, down by 334,000 barrels per day from the previous week. Over the last four weeks, crude oil imports averaged over 8.4 million barrels per day, 11.5% above the same four-week period last year.” Story at…
http://www.streetinsider.com/Commodities/Crude+Inventory+%2B1.1M+Barrels+vs+-1.34M+Expected/11924141.html
The above piece noted: “Crude Inventory: +1.1M Barrels vs -1.34M Expected”
THE 1200-YEAR-EVENT BUBBLE (Jesse Felder Tumblr)
“…the utilities sector, one of the most popular yield-focused segments of the equity market, [is] trading at 3 standard deviations, also called “sigma,” above its long-term average. Jeremy Grantham defines a bubble as a 2 sigma event, which should occur every 44 years or so. This 3 sigma event in utilities is statistically the very same degree of overvaluation we witnessed in residential real estate at the height of its recent bubble and should only occur once every 1,200 years, according to Grantham.” – Jesse Felder. Commentary at…
http://jessefelder.tumblr.com/post/148464579765/utilities-stocks-just-did-something-that-should
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 was down about 0.3% to 2175.
-VIX rose about 3% to 12.05.
-The yield on the 10-year Treasury dipped to 1.51%.
VXX TRADE:
VXX split 1 for 4 Tuesday and that accounts for the big jump in price Tuesday. My trade is actually down about 1.6% as of Wednesday. Today, the calm-before-the-storm indicator remains down and that suggests that VXX was still a buy as of Wednesday’s close.
This trade may take 1 to 3-weeks to play out; a big move up in VIX will move VXX up (about half as much). My sell signal is based on statistical analysis of movements of the S&P 500 and not actual movement of VIX or VXX.
BOLLINGER BAND SQUEEZE PLAY: The Bollinger Band squeeze play occurs when the difference between the upper and lower Bollinger Bands (2xStd Deviations of the 20-dSMA of the S&P 500 Index above and below the index) are at 6-month lows. That spread between the upper and lower Bollinger Bands is now lower than the recent 6-month value and, in fact, it is lower than all of my prior records going back to June of 2008. This is a big squeeze, but that doesn’t necessarily relate to a huge move to follow.
To summarize, the Bollinger Band Squeeze-Play remains Wednesday on the S&P 500 and that indicates a big move is coming, most likely down. In addition to a squeeze (upper and lower bands close together) the Index is close to its upper band and that is a bearish indicator.
Indicators: My 10-day sum of 16 indicators improved from -7 to +1 Wednesday. Since a turn-down is likely soon (per some indicators) it is not a surprise that many of my trend-following indicators are getting more positive.
SHORT TRADE
I am still holding short positions.
MONEY TREND INDICATOR
My short-term Money Trend indicator can be volatile; Wednesday it is still flat; a neutral indication. This indicator turned down on 15 July. Since then the S&P 500 has struggled for more than 3-weeks and has only managed to get about 1/2% higher.
Overall, this week is still likely to be down.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) dipped to 53% Wednesday. It was 53.2% Tuesday. A number above 50% is usually GOOD news for the markets.
On a longer term, the 150-day moving average of advancing stocks improved to 54%. A value above 50% generally indicates an up-trend. The McClellan Oscillator (a Breadth measure) declined from -4 (percentage calculation method) to -14.
New-highs outpaced New-lows. The spread (new-highs minus new-lows) dropped to +187 Wednesday. (It was +265 Tuesday.) The 10-day moving average of the change in spread slipped to +3. In other words, over the last 10-days, on average, the spread has increased by 3 each day. Market Internals remained 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
Wednesday, 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 one really just shows that the markets have been doing well recently.
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.
