“U.S. economic growth was a bit stronger than initially
thought in the second quarter, notching its best performance in nearly four
years and putting the economy on track to hit the Trump administration’s goal
of 3 percent annual growth. Gross domestic product increased at a 4.2 percent
annualized rate…” Story at…
HOME SALES (Marketwatch)
“Pending-home sales declined 0.7% in July, the National Association of Realtors said Wednesday.”
Story at…
My cmt: Year over-year pending home sales are down 2.3%
& this is the 7th consecutive month of declines. Home sales
could be warning signs of an economic slowdown, but the evidence seems to show
the slowdown is due in large part to lack of supply. Other numbers show the
economy is cooking along quite well.
CRUDE INVENTORIES (OilPrice.com)
“Crude oil prices were set to rise following the Energy
Information Administrations’ latest weekly petroleum status report as
the authority reported a draw in crude oil inventories, of 2.6 million barrels
for the week to August 24…” Story at…
THE BULL RESUMES (Real Investment Advice)
“Regardless of the reasons, the breakout Friday, with the
follow through on Monday, is indeed bullish. As we stated repeatedly going back
to April, each
time the market broke through levels of overhead resistance we increased equity
exposure in our portfolios. The breakout above the January
highs now puts 3000 squarely into focus for traders.” Story at…
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 was up about 0.6% to 2914.
-VIX dipped about 2% to 12.25.
-The yield on the 10-year Treasury was unchanged at 2.884%
as of this post.
Volumes have been below normal every day over the last 2
weeks, between 2% and 16% below the monthly average. If we run out of buyers that
will begin a decline in stock markets.
Currently, my daily sum of 17 Indicators improved from +4
to +6 (a positive number is bullish) while the 10-day smoothed version that
negates the daily fluctuations improved from +30 to +43 indicating that
conditions are much better than 2-weeks ago.
Things are bullish except that the Bearish signs are the
same as we’ve seen for a couple of days: Bollinger Bands and the
Overbought/Oversold Ratio both remain oversold. 8 out of the last 10-days have
been up and that’s a cautionary number. So far, RSI remains neutral at 67
(14-day, SMA). If we get more negative signs the most likely move would be a
3-5% pullback, unless we see a lot more negative signs. All of the
beforementioned negative signs are “overbought” indications. Overbought
conditions can remain for some time.
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…
WEDNESDAY MARKET INTERNALS (NYSE DATA)
Market Internals
remained 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).
I am now 50% invested in stocks. For me, fully invested
is a balanced 50% stock portfolio. As a retiree, this is a position with which
I am comfortable unless I am in full defense mode or feeling especially
optimistic.
INTERMEDIATE / LONG-TERM INDICATOR
Intermediate/Long-Term
Indicator: Wednesday, the Price & VIX indicators were positive; Volume &
Sentiment were neutral. Overall this is a NEUTRAL indication.
