ISM MANUFACTURING / CONSTRUCTION SPENDING (Reuters)
“A measure of U.S. factory activity retreated from a
more than 14-year high in September as growth in new orders slowed, but supply
bottlenecks appeared to be easing, suggesting a steady pace of expansion in
manufacturing. Other data on Monday showed a small increase in construction
spending in August…” Story at…
MARKET REPORT / ANALYSIS
-Monday the S&P 500 rose about 0.4% to 2925.
-VIX dipped about 1% to 12.00.
-The yield on the 10-year Treasury rose to 3.084% as of 5:07PM.
We’ve been waiting for investors to make up their minds. Today, we had a positive result in price (the
S&P 00 was up), but advancers were outpaced by decliners by a big margin, so
we can’t feel great about the day. New 52-week
lows are still much higher than new 52-week highs. We still have a significant
warning from the Fosback Hi-Low Logic indicator. This one is based on the fact that new
52-week highs and new 52-week lows should not both be high numbers at the same
time. That is a recipe for a correction if it continues. The Smart Money is selling
(based on late day action).
Currently, my daily sum of 17 Indicators improved
slightly from -7 to -5 (a positive number is bullish; negatives are bearish)
while the 10-day smoothed version that negates the daily fluctuations dipped
from -1 to -6 indicating that conditions are worse than 2-weeks ago.
I’m not ready to move yet, there aren’t enough negative
signs to suggest a significant sell-off, but it sure feels like trouble ahead. Cyclicals
vs the Index, Bollinger Bands and RSI are all neutral as is my comparison of
Breadth vs, the S&P 500.
All in all, I remain a very cautious Bull.
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…
MONDAY 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
Monday, the Price
indicator was positive; Sentiment, Volume & VIX were neutral. Overall this
is a NEUTRAL indication.
