“The NAHB housing market index for June came in at 68
versus 70 expected. That was also lower than the 70 in May.” Story at…
MARKET REPORT / ANALYSIS
-Monday the S&P 500 slipped about 0.2% to 2774.
-VIX was up about 3% to 12.31.
-The yield on the 10-year Treasury slipped to 2.897%.
My daily sum of 17 Indicators declined slightly from -2
to -3, while the 10-day smoothed version dropped from +33 to +24. A number
above zero shows most indicators are bullish. Overall not much change from last
week, but as noted last week, a number of the indicators have stalled and
appear to be rolling over to the downside.
Breadth, measured as the % of stocks on the NYSE that
advanced over the last 10-days, has dropped below 50% and now sits at 49.1%. (More
stocks have been going down over the last 2-weeks than have been going up.) The
market internals I track would be negative except that advancing volume is
still headed up.
RSI is surprisingly elevated at 71 (I was surprised that
RSI was up today on a down day for the S&P 500). 80 is overbought. Smart
Money is headed down. When we compared the Internals vs the S&P 500 price,
price is too far ahead of Internals and is close to signaling a top. New-high/new-low
data is generally bearish, but the graph of new-highs continues higher and that’s
a bullish sign for the time being.
My longer-term indicator system remains bullish and I
remain a bull. Short-term, the deterioration in indicators is worrisome. Indictors are still declining, but it's not yet time to panic.
MOMENTUM ANALYSIS:
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%. 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%.
*For additional background on the ETF ranking system see
NTSM Page at…
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. (On 5 Apr 2018 I
corrected a coding/graphing error that had consistently shown Nike
incorrectly.)
*I rank the Dow 30 similarly to the ETF ranking system.
For more details, see NTSM Page at…
MONDAY MARKET INTERNALS (NYSE DATA)
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).
18 Apr 2018 I
increased stock investments from 35% to 50% based on the Intermediate/Long-Term
Indicator that turned positive on the 17th. (It has since turned Neutral.) For
me, fully invested is a balanced 50% stock portfolio. 50% is my minimum unless
I am in full defense mode.
On 10 May 2018 I
added stock positions to increase Stock investments to 58% based on more
evidence that the correction is over. This is high for me given that we are
late in this cycle (and as a retiree), but it indicates my bullishness after
the correction. I’ll sell these new positions quickly if the market turns down.
INTERMEDIATE / LONG-TERM INDICATOR
Intermediate/Long-Term
Indicator: Monday, the Price & VIX indicators were positive; the
Sentiment & Volume indicators were neutral. Overall this is a BULLISH
indication.
