Consumer Price Index (CPI) … Jobless Claims … “Dogs and Cats Living Together - Mass Hysteria” … Stock Market Analysis… ETF Trading … Dow 30 Ranking

CPI (MarketWatch)

“American families paid more for gas, rent and airfare in August, but upward pressure on consumer inflation eased for the first time in almost a year. The consumer price index rose by 0.2% in August…” Story at…

https://www.marketwatch.com/story/consumer-inflation-climbs-again-in-august-cpi-shows-but-pace-of-increase-slows-2018-09-13

 

JOBLESS CLAIMS (Reuters)

“The number of Americans filing for unemployment benefits unexpectedly fell last week, hitting its lowest level in nearly 49 years and pointing to robust labor market conditions. Initial claims for state unemployment benefits slipped 1,000 to a seasonally adjusted 204,000 for the week ended Sept. 8…” Story at…

https://www.reuters.com/article/us-usa-economy-unemployment/u-s-weekly-jobless-claims-drop-to-near-49-year-low-idUSKCN1LT23J

 

DOGS & CATS LIVING TOGETHER…MASS HYSTERIA

I have no problem with evacuations on the NC Outer Banks and South of here, this was after all a dangerous storm, but the hysteria in Hampton Roads of Virginia regarding hurricane Florence has been over the top. I was at Home Depot Wednesday in Chesapeake, VA buying a smoke detector.  There were lines of people buying generators and water.  At the time, the hurricane was predicted (with high confidence) to pass more than 200-miles south of us.  As of 4PM Thursday, the storm is tracking as predicted and the instruments at a buoy at Ft Story reported sustained winds of 33 mph. (Buoy reports are the highest you’ll get.) This is typical for a winter northeaster in our area when no evacuations are normally ordered.

 

Incredibly, evacuation orders were issued by the Governor on Monday (based on the 5-day forecast from the Hurricane Center) and reaffirmed Thursday (even though the forecast by then showed Florence would miss our area by hundreds of miles). Due to the evacuation orders, children have been out of school for 4- days. Residents of nursing homes were forced to move at great cost and risk. Many businesses were forced to close along with some area government offices and medical centers. MASS HYSTERIA!

 

MARKET REPORT / ANALYSIS         

-Thursday the S&P 500 was up about 0.5% to 2904.

-VIX dropped about 6% to 12.37. 

-The yield on the 10-year Treasury increased slightly to 2.976% as of this post.

 

Currently, my daily sum of 17 Indicators declined from -3 to -7 (a positive number is bullish; negatives are bearish) while the 10-day smoothed version that negates the daily fluctuations dipped from -41 to -54 indicating that conditions are worse than 2-weeks ago. 

 

BULLISH SIGNS

-Up volume continues to pick up.

-Size of the up-moves have been larger than the down moves over the last month.

 

NEUTRAL SIGNS

-Breadth (measured as the % of NYSE stocks advancing over the past 10-days) is flat; but it is only 46.9% indicating that less than half of all stocks on the NYSE have been advancing over the last 10-days.

-Late day action (the Smart Money) is flat.

-VIX is neutral.

 

BEAR SIGNS

-Breadth vs the S&P 500 index indicates that the Index is too far ahead of most stocks on the NYSE.

-New-high/new-low data is headed sharply lower.

-Money Trend is falling.

-Statistically, the S&P 500 is too calm (measured by daily moves) suggesting some down moves ahead.

 

Overall, the indicators are dipping, but I think the market will climb somewhat higher before we see a retreat. If I’m wrong, we’ll worry if the Index falls below the 50-day value…or if the indicators really turn south.

 

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

 

THURSDAY MARKET INTERNALS (NYSE DATA)

Market Internals improved 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; Sentiment was negative; Volume & VIX were neutral. Overall this is a NEUTRAL indication.