“A report released by the Commerce Department on Thursday
showed personal income and spending in the U.S. both increased in line with
economist estimates in the month of July. The Commerce Department said personal
income rose by 0.3 percent in July after climbing by 0.4 percent in June.”
Story at…
PCE PRICES (Reuters)
“U.S. consumer spending increased solidly in July,
suggesting strong economic growth early in the third quarter, while a measure
of underlying inflation hit the Federal Reserve’s 2 percent target for the
third time this year.” Story at…
My cmt: PCE is the believed to be the favored inflation
stat for the Federal Reserve.
JOBLESS CLAIMS (Reuters)
“The number of Americans filing for unemployment benefits
rose last week, but the underlying trend continued to point to a robust labor
market that should keep the economy on a strong growth path this year. Initial
claims for state unemployment benefits increased 3,000…” Story at…
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 was down about 0.4% to 2901.
-VIX rose about 10% to 13.53.
-The yield on the 10-year Treasury was little changed at
2.857% as of this post.
Markets don’t go up forever; we were due for a pause of
some kind and today was evidence of that fact.
Currently, my daily sum of 17 Indicators slipped from +6
to -1 (a positive number is bullish; negatives are bearish) while the 10-day
smoothed version that negates the daily fluctuations improved from +43 to +45
indicating that conditions are about the same as 2-weeks ago. So now the sum of
indicators is essentially neutral.
Bollinger Bands are no longer overbought, but the Overbought/Oversold
Ratio remains overbought. (My apologies; I typed oversold instead of overbought
recently. We have had overbought conditions suggesting
a pullback not oversold!)
RSI climbed a bit, but it is still neutral at 70 (14-day,
SMA).
We can't really say where we go from here; one likely move would be a 3-5% pullback, but
further advance before a retreat is always possible since indicators are neutral.
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…
THURSDAY MARKET INTERNALS (NYSE DATA)
Market Internals declined
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).
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: Thursday, the Price indicator was positive; Volume, VIX &
Sentiment were neutral. Overall this is a NEUTRAL indication.
