CONSUMER CONFIDENCE (Conference Board)
“The Index now stands at 121.5 (1985=100), down from
131.3 in May…“After two consecutive months of improvement, Consumer Confidence
declined in June to its lowest level since September 2017 (Index, 120.6),” said
Lynn Franco, Senior Director of Economic Indicators at The Conference Board.
“The decrease in the Present Situation Index was driven by a less favorable
assessment of business and labor market conditions. Consumers’ expectations
regarding the short-term outlook also retreated. The escalation in trade and
tariff tensions earlier this month appears to have shaken consumers’
confidence. Although the Index remains at a high level, continued uncertainty
could result in further volatility in the Index and, at some point, could even
begin to diminish consumers’ confidence in the expansion.” Press release
at…
NEW HOME SALES (MarketWatch)
“Sales fell 7.8% compared to April, but that month’s
number was revised up. May sales were 3.7% lower than a year ago.” Story at…
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 dropped about 1% to 2917.
-VIX rose about 7% to 16.28.
-The yield on the 10-year Treasury dipped to 2.003%.
Cyclical stocks are now out-performing the S&P 500 on
a 10-day basis, a bullish signal. Perhaps the weakness we’ve been experiencing
is abating? Well, maybe not. Utilities increased their out-performance
relative to the S&P 500 a bearish sign. Neither are strong signs.
My daily sum of 20 Indicators dropped from -4 to -5 (a
positive number is bullish; negatives are bearish) while the 10-day smoothed
version that negates the daily fluctuations improved from +33 to +21. (These
numbers sometimes change after I post the blog based on data that comes in
late.) Most of these indicators are short-term.
Still, I’m remain bullish.
TOP / BOTTOM INDICATOR SCALE OF 1 TO 10
Today’s Reading: 0
Most Recent Day with a value other than Zero: -1 on 24
June (RSI was bearish.)
(1) +10 Max Bullish / -10 Max Bearish)
(2) -4 or below is a Sell sign. +4 or better is a Buy
Sign.
MOMENTUM ANALYSIS:
TODAY’S RANKING OF
15 ETFs (Ranked Daily)
*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…
MICROSOFT is still #1 in the momentum ranking and I will
continue to hold it as long as it is, but…
“Shares of Microsoft…[MSFT closed down 3.2%]…after an
analyst at Jefferies raised concern about the long-term success of the
company’s cloud service, Azure, relative to Amazon Web Services
(AWS). “Azure will likely never see margins similar to AWS at scale, and the
long-term margin of even AWS may be lower than most expect,” the analyst said.”
- CNBC
TUESDAY 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).
Using the Short-term indicator in 2018 in SPY would have
made a 5% gain instead of a 6% loss for buy-and-hold. The methodology was Buy
on a POSITIVE indication and Sell on a NEGATIVE indication and stay out until
the next POSITIVE indication. The back-test included 13-buys and 13-sells, or a
trade every 2-weeks on average.
My current stock allocation is about 55% invested in
stocks as of 4 June 2019. This is based on the improved indicators 3 June and
my recommendation to increase stock holdings if we saw strong buying on 4 June.
As a retiree, I am conservatively positioned with a balanced portfolio. You may be comfortable with a higher % invested
in stocks – that’s OK.
INTERMEDIATE / LONG-TERM INDICATOR
Tuesday, the PRICE indicator was positive; VOLUME, VIX
and SENTIMENT indicators were neutral. Overall the Long-Term Indicator remained
NEUTRAL.
