“U.S. home sales fell in September by the most in over
two years as the housing market continued to struggle despite strength across
the broader economy.” Story at…
MARKET REPORT / ANALYSIS
-Friday the S&P 500 dropped about 1 pt to 2768.
-VIX slipped about 0.9% to 19.89.
-The yield on the 10-year Treasury rose to 3.192% as of 4:34pm.
The S&P 500 closed at the 200-dMA again today. While
we have seen a couple of closes below the 200-day, the Index hasn’t stayed
there nor have we seen a close significantly below it. As long as the 200-dMA
holds, we have to feel like this pullback is less likely to develop into a
serious correction. It still could, but so far, not.
We have some decent bullish signs: My Money Trend
indicator is headed up; 52% of volume has been up over the last 10-days on the
NYSE; my basket of internals improved, but remained neutral; new-high/new-low
data finally turned up; the S&P 500 still has had only 5 days that were up
this month (that’s very bullish); RSI is oversold; up-moves have been bigger than
down moves over the last month.
There are some bear signs too: VIX is still rising on smoothed
basis; Sentiment is high, but not yet a sell sign; only 44% of stocks have
advanced over the last 10-days; the smoothed value of new-highs is falling; the
Utilities ETF (XLU) is outperforming the S&P 500.
Smart Money (late day action) is neutral as is the indicator
that compares the Cyclical Industrial stocks to the S&P 500.
Overall, my daily sum of 17 Indicators improved from -6 to
-2 (a positive number is bullish; negatives are bearish) while the 10-day
smoothed version that negates the daily fluctuations improved from -56 to -53.
I am currently neutral to slightly bullish on the markets
as are the indicators (some are negative, but they are improving). Perhaps we’ll
retest the low; perhaps not.
One caution: Sentiment (%-bulls based on funds invested
in selected Rydex funds) is creeping up. If indicators remain where they are
and Sentiment goes negative, we’ll have a sell signal that we probably can’t
ignore.
MOMENTUM ANALYSIS:
(Momentum analysis is not useful in a selloff.)
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…
FRIDAY 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 - SELL
Friday, the Price
indicator was positive; Sentiment was neutral; Volume & VIX indicators were
negative. Overall this is a NEGATIVE indication that suggests reducing stock
allocations, but we are watching S&P 500 200-dMA to see if the chart will
confirm the indicators. So far, it has not so I remain fully invested.
