“The Federal Reserve on Wednesday upgraded its assessment
of the economy, hinting at another rate hike as soon as September.” Story at…
ADP EMPLOYMENT (HousingWire)
“The National Employment Report indicates that private
sector employment increased 219, 000 jobs from June to July.” Story at…
ISM INDEX (MrketWatch)
“American manufacturers grew somewhat less rapidly in
July, held back by shortages of skilled labor, higher costs for raw materials
due to tariffs and difficulty getting enough transportation. The Institute for Supply Management said its manufacturing index dipped to
58.1% in July…” Story at…
CONSTRUCTION SPENDING (CNBC)
“U.S. construction spending recorded its biggest drop in
more than a year in June as investment in both private and public projects
fell, but spending for the prior months was revised sharply higher…The Commerce Department said
on Wednesday that construction spending fell 1.1 percent…” Story at…
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 dipped about 0.1% to 2813.
-VIX rose about 2% to 1315.
-The yield on the 10-year Treasury slipped to 2.995%.
My daily sum of 17 Indicators declined from -1 to -5
while the 10-day smoothed version that negates the daily fluctuations slipped
from -13 to -16. While there were some declines, the indicators are not screaming
sell.
I remain fully invested.
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.
*I rank the Dow 30 similarly to the ETF ranking system.
For more details, see NTSM Page at…
Intel took a huge hit today, dropping 8.6% due to trade
war/tariff concerns. I suspect this is overblown. Intel has a PE of 21 (vs.??
for the Dow 30) and a Dividend yield of 2.3%...seems like a value buy to me. As
shown above, it ranks 21st in the Dow 30 momentum trading system and
that’s not good.
WEDNESDAY MARKET INTERNALS (NYSE DATA)
Market Internals slipped
to 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 Price indicator was positive; Volume, VIX &
Sentiment indicators were neutral. Overall this is a NEUTRAL indication.
