Stock Market Analysis… ETF Trading … Dow 30 Ranking

Looks like Monday's post went in the Draft pile. Sorry, here's Monday's post...


It's been a long day so I'll keep this short.

MARKET REPORT / ANALYSIS
-Monday the S&P 500 was up about 0.4% to 2850.
-VIX dropped about 3% to 11.27.

-The yield on the 10-year Treasury was little changed at 2.944%.

 

The Bollinger Band indicator showed a squeeze last week and today it is nearly oversold. RSI is not confirming the signal so for now I’ll just watch.

 

Currently, my daily sum of 17 Indicators slipped from +5 to +3 while the 10-day smoothed version that negates the daily fluctuations improved from -8 to +1.

 

Statistical analysis of the daily moves indicates a breakout (usually to the downside) is coming in the next several weeks. This used to be a reliable indicator, but it has been wrong the last several times.  We need to see more evidence.

 

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…

http://navigatethestockmarket.blogspot.com/p/exchange-traded-funds-etf-ranking.html

 

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…

https://navigatethestockmarket.blogspot.com/p/a-system-for-trading-dow-30-stocks-my_8.html

 

MONDAY MARKET INTERNALS (NYSE DATA)

Market Internals remained 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: Monday, the Price indicator was positive; Volume, VIX & Sentiment indicators were neutral. Overall this is a NEUTRAL indication.