“U.S. hiring topped forecasts in June while unemployment rose
from an 18-year low and wage gains unexpectedly slowed, indicating the labor
market has room to keep expanding. Nonfarm payrolls climbed 213,000…” Story at…
AVG HOURLY EARNINGS (Reuters)
“Average hourly earnings gained five cents, or 0.2
percent in June after increasing 0.3 percent in May. That kept the annual
increase in average hourly earnings at 2.7 percent. The moderate wage growth
should allay fears of a strong build-up in inflation pressures.” Story at…
545 PEOPLE [FEDERAL POLITICIANS] ARE RESPONSIBLE FOR THE MESS,
BUT THEY UNITE IN A COMMON CON (Orlando Sentinel, Pub Feb 3, 1984)
The column has been making the rounds on social media as
Charley Reese’s last column. It wasn’t (his actual column was a more normal
farewell), but he updated this original version from 1984 over the years.
Here’s a short excerpt from the 1984 commentary:
“Politicians are the only people in the world who create
problems and then campaign against them. Have you ever wondered why, if both
the Democrats and the Republicans are against deficits, we have deficits? Have
you ever wondered why, if all the politicians are against inflation and high
taxes, we have inflation and high taxes?... If the tax code is unfair, it's
because they want it unfair. If the budget is in the red, it's because they
want it in the red. If the Marines are in Lebanon, it's because they want them in
Lebanon…Those 545 people and they alone are responsible. They and they alone
have the power. they and they alone should be held accountable by the people
who are their bosses...” – Charley Reese, Orlando Sentinel. Full column here…
My cmt: We really should vote all the incumbents/rats out
of office.
MARKET REPORT / ANALYSIS
-Friday the S&P 500 was up about 0.9% to 2759.
-VIX dropped about 11% to 13.38.
-The yield on the 10-year Treasury slipped to 2.822%.
BULLISH SIGNS
-Money trend is moving up – a bullish sign.
-Sentiment is a high 84% (5-dMA of bulls/{bulls+bears} in
selected Rydex long/short funds. While it is high, it would need to get above
91% to send a sell signal for the Sentiment Indicator.
-My daily sum of 17 Indicators rose from -2 to +4, and
the 10-day smoothed version improved from -50 to -40. The Sum of Indicators is
moving up. This is bullish for the market.
-New-High/new-Low data has turned up and now looks good.
BEAR SIGNS
-Smart Money (based on late-day-trading) is dropping now
a bearish sign. Traders don’t want to hold positions overnight. I’d guess Trump tariffs are the concern.
-Breadth has moved up to 56% and the Advance/Decline
ratio is now overbought. This indicator is always early and without
confirmation by Bollinger Bands and RSI there’s no point in paying much
attention to this indicator.
-Spread between the S&P 500 and the cyclical
industrial stocks (XLI-ETF) is bearish because the cyclicals are
underperforming the S&P. That’s a sign that investors are worried. At the
same time Utilities have been outperforming S&P 500 and that’s confirming
the bear sign.
Overall, I’ll go with the sum of Indicators and it is
moving up strongly. I am bullish
short-term.
My longer-term indicator system remained neutral, but I am
bullish there too.
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 improved
to Positive 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 VIX, Price, Sentiment & Volume indicators were
neutral. Overall this is a NEUTRAL indication.
