“U.S. new-home construction rose more than forecast to a
three-month high in August, while permits unexpectedly saw the biggest drop
since February 2017, adding to signs that homebuilding is struggling to
stabilize, government figures showed Wednesday…Residential starts rose 9.2%...”
Story at…
CRUDE INVENTORIES (OilPrice.com)
“After API’s latest surprise inventory build pressured
oil prices, the Energy Information Administration cheered the market up
by refuting the
build and reporting instead yet another weekly draw, of 2.1 million barrels for
the week to September 14.” Story at…
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 rose about 0.5% to 2908.
-VIX dropped about 8% to 11.75.
-The yield on the 10-year Treasury rose to 3.069% as of
this post.
Sentiment is still elevated, but it has dropped below
action levels and that would allow the market to make further gains, baring
other issues.
Bollinger Bands on the S&P 500 index are still exhibiting
a “Squeeze” (top and bottom bands are close together) suggesting a breakout (up
or down) is coming. The S&P 500 Index is now much closer to the upper band
suggesting that the break is more likely to be down. We need to see confirmation by RSI, but RSI
is still solidly neutral (47, 14-day SMA) so no need to panic yet. Squeezes over
the past 3-years or so have led to little or no reaction from the stock market.
Currently, my daily sum of 17 Indicators improved
slightly from zero to +1 (a positive number is bullish; negatives are bearish)
while the 10-day smoothed version that negates the daily fluctuations improved
from -45 to -35 indicating that conditions are slightly better than 2-weeks
ago.
Indicators are nearly evenly mixed between bull and bear,
but overall, the indicators are slowly improving.
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 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: Wednesday, the Price indicator was positive; Sentiment, Volume
& VIX were neutral. Overall this is a NEUTRAL indication.
