HOME SALES
U.S. home sales rose in May, boosted by lower interest
rates for mortgages, giving a positive signal for the health of the U.S.
economy.
The National Association of Realtors said on Friday
existing home sales increased 2.5%...” Story at…
MARKET ISN’T IN A BUBBLE – BELIEVING IT IS COULD GET YOU IN
REAL TROUBLE (MarketWatch)
“The stock market is not in a bubble. I suppose it was
inevitable that the stock market’s new all-time high this week would cause
bubble talk to bubble up, so to speak. Yet, it shouldn’t need repeating,
calling something a bubble doesn’t make it a bubble.” Commentary at…
MARKET REPORT / ANALYSIS
-Friday the S&P 500 slipped about 0.1% to 2950.
-VIX rose about 4% to 15.40.
-The yield on the 10-year Treasury rose to 2.060%.
RSI remained bearish today, but Bollinger Bands are still
in neutral territory. Bollinger Bands are close to overbought, but not there
yet. I use these indicators together so
I am cautious, but still bullish. These signals could be bearish for some time. It would take more than RSI and Bollinger
Bands to call a sell.
Cyclical stocks are still under-performing the S&P
500 while Utilities are out- performing relative to the S&P 500. Both are
bearish indications, but we have not yet seen a lot of other indicators joining
the bear party.
The Smart Money (late day action) dropped today and has
been down over a longer term. We’ll have to see where this stat goes.
My daily sum of 20 Indicators dropped from +5 to -2 (a
positive number is bullish; negatives are bearish) while the 10-day smoothed
version that negates the daily fluctuations droppd from +54 to +45. (These
numbers sometimes change after I post the blog based on data that comes in
late.) Most of these indicators are short-term. A minus 2 is not drastically
negative so…
I’m remain bullish.
TOP / BOTTOM INDICATOR SCALE OF 1 TO 10
Today’s Reading: -1
Most Recent Day with a value other than Zero: -1 on 21
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…
FRIDAY MARKET INTERNALS (NYSE DATA)
Market Internals switched
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).
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
Friday, the PRICE indicator was positive; VOLUME, VIX and
SENTIMENT indicators were neutral. Overall the Long-Term Indicator dropped
to a NEUTRAL indication.
