“Three aspects of the stock market that I follow closely
are fundamentals, sentiment and technicals. According the measures below, all
three now show the stock market has entered uncharted territory…it is fair to
say that this is now the most overvalued, overbullish and overbought stock
market of all time.” Commentary with charts ad further discussion at…
MARKET REPORT / ANALYSIS
-Monday the S&P 500 was up about 0.8% to 2833.
-VIX was down about 2% to 11.03.
-The yield on the 10-year Treasury was little changed at
2.656%.
NOT MUCH DIFFERENCE:
-RSI is still giving a sell signal.
-Most of the Topping Indicators I listed a week ago
remain elevated.
-My comparison of Breadth vs. the S&P 500 showed that
the Index is way ahead of the market internals, so it’s giving a sell signal
now.
-My sum of 17 Indicators remained at -2 today. (A “-”
number means that most indicators are bearish.) Longer term, the indicators are
falling and that’s bearish.
I am bearish short-term. Actually, I have been bearish
since 3 Jan and the market is up 100 points (4%) since then. As I have noted
frequently this year, but even more so now, complacency is at extremes as indicated by the
extreme low VIX; % above the 200-dMA; deteriorating market internals, etc. When
it will break is anyone’s guess. We are due for a correction in 2018 due to
Presidential election cycle history, but I still wouldn’t short this market –
there are too many buyers. We’ve gone straight up, and a surprising number of
people think this market is going much higher.
Longer term I am a bull.
TODAY’S RANKING OF 15 ETFs (Ranked Daily)
The top ranked ETF receives 100%. The rest are then
ranked based on their momentum relative to the leading ETF. While momentum isn’t stock performance per
se, momentum is closely related to stock performance. For example, over the 4-months
from Oct thru mid-February 2016, the number 1 ranked Financials (XLF) outperformed
the S&P 500 by nearly 20%.
*For additional background on the ETF ranking system see
NTSM Page at…
In 2017 Technology (XLK) was ranked in the top 3 Momentum
Plays for 52% of all trading days in 2017 (if I counted correctly.) XLK was up
35% on the year while the S&P 500 was up 18%.
TODAY’S RANKING OF THE DOW 30 STOCKS (Ranked Daily)
The top ranked stock receives 100%. The rest are then
ranked based on their momentum relative to the leading stock. Avoid GE. Its
120-day moving average is falling. Merck bounced yesterday with a new cancer
drug that is very promising.
*I rank the Dow 30 similarly to the ETF ranking system.
For more details, see NTSM Page at…
Intel seems to have gotten past the recent chip design
issues and investors have apparently decided to move back into Intel. It’s up
nearly 5% in the last 5-dasy and may be worth another look. Low PE; Decent
Dividend. He question mark remains growth but it did break out from a 3-year
plateau and is above that point now. It is still not a momentum play – I say
it’s a value play at this point.
MONDAY MARKET INTERNALS (NYSE DATA)
Market Internals remained
Neutral on the market. (Market Internals are based on a package of internals
and all must be positive to create a positive indication.)
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, Price and Volume indicators were positive; Sentiment &
VIX indicators were neutral. This adds up to a BUY indication, but at this
point a BUY signal is meaningless. The
NTSM system is designed to issue BUY signals near a Bottom as conditions rapidly
improve. Now, it is just an indication
that the market is doing well. The NTSM
long-term signal can sometimes signal BUY at the top if conditions are too good.
The last actionable Buy signal was on 15 November 2016.
MY INVESTED STOCK POSITION:
TSP (RETIREMENT ACCOUNT – GOV EMPLOYEES) ALLOCATION
I remain FULLY INVESTED at 50% stocks in the S&P 500
Index fund (C-Fund) with the remainder is 50% G-Fund (Government securities).
This is a conservative retiree allocation, but I consider it fully invested for
my situation.
