“Housing starts tumble to 9-month low as market headwinds
crush momentum…Builders broke ground on far fewer homes in June, signalling
more of the stop-start rhythm that’s characterized the uneven housing recovery.
June’s pace of starts was 12.3% lower than a downwardly-revised May, and 3%
lower than year-ago levels.” Story at…
CRUDE INVENTORIES (OilPrice.com)
“The Energy Information Administration reported a
surprise major build in crude oil inventories of 5.8 million barrels for the
week to July 13, after a huge draw of 12.6 million reported
for the previous week that represented the largest draw since 2016.” Story at…
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 was up about 0.2% to 2816.
-VIX was up about 0.3% to 12.10.
-The yield on the 10-year Treasury rose to 2.877%.
There are a few more bearish signs today. RSI has finally turned negative with a value
of 81 (14-day, SMA). Bollinger Bands are nearly negative, but not yet there. I
usually consider those two signals in combination so it’s not time to panic.
The advance/decline ratio is overbought, but this signal is always early. New-highs
continue to slip, but advancing volume moved up on a 10-day basis and that’s a
good sign.
Over the last 10-days there have been 8-up-days. That is a point that usually brings at least
a down day and sometimes more selling. The Pros (Smart Money) are neutral on the
market based on late-day market action so this signal is neutral.
As noted yesterday, Sentiment is high but not yet issuing
a sell signal.
My daily sum of 17 Indicators slipped from +1 to -2 while
the 10-day smoothed version that negates the daily fluctuations dropped from +14
to +10.
So, we’re seeing more Bear signs, but there aren’t yet
enough bear signs to get me too worried; therefore, I remain fully invested. Unfortunately, this isn't rocket science - there's a lot more certainty in rocket science.
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…
GE has been removed from my DOW 30 chart and Walgreens
Boots Alliance (WBA) has been added to match the official DOW 30. WBA is best known for operating Walgreens
drug stores.
WEDNESDAY 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: Wednesday, the Volume indicator was positive; VIX, Price &
Sentiment indicators were neutral. Overall this is a NEUTRAL indication.
