“Escalating global trade tensions are starting to make
Americans nervous. The University of Michigan's monthly confidence index, a
widely used gauge of consumer sentiment, fell slightly in July from the
previous month.” Story at…
MARKET REPORT / ANALYSIS
-Friday the S&P 500 was up about 0.1% to 2801.
-VIX dropped about 3% to 12.18.
-The yield on the 10-year Treasury slipped to 2.831%.
Volume was more than 20% below the monthly average today - perhaps the traders took off early. I have no
explanation.
Bull Signs.
-Money Trend is up.
-New-high/New-low data looks good.
-Charts look like there’s room to run higher.
-VIX has been falling, but it has flattened recently so
we’ll call this one mildly bullish.
Neutral Signs.
-Smart Money (based on late day trading) is neutral.
-Bollinger Bands are stretched but are not yet overbought.
-RSI is neutral.
Bear Signs.
-Breadth (number of stocks advancing) had been improving
but now has turned flat.
- The Advance/Decline ratio is overbought, but this one
is always early.
-Over the last 10-days, 8- days have been up. That’s a sign that Monday may see some profit
taking. I won’t make much more of it unless we see more overbought signs.
-We’re not seeing the kind of new-high numbers that we
need to keep this rally going. It doesn’t
mean the rally will end now, but we do need to see these numbers improve if the
market is going to continue up.
-The Industrial Cyclicals (XLI-ETF) are underperforming
the S&P 500 while Utilities are outperforming the Index. This is a bearish sign, but only in the very
near term.
My daily sum of 17 Indicators remained +3 while the
10-day smoothed version that negates the daily fluctuations improved from -2 to
+8. The Sum of Indicators is moving up. This is still bullish for the market.
I remain bullish.
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…
I still have GE in my DOW 30 chart. I’ll have to update my calculations to delete
GE and add Walgreens Boots Alliance (WBA) since it has replaced GE in the DOW
30. WBA is best known for operating Walgreens drug stores.
FRIDAY 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: Friday, the Volume, VIX, Price & Sentiment indicators were
neutral. Overall this is a NEUTRAL indication.
