JOBLESS CLAIMS (Reuters)
“The number of Americans filing applications for
unemployment benefits rose more than expected last week, but there is still no
sign of a significant pickup in layoffs even as economic growth has shifted
into lower gear. Initial claims for state unemployment benefits increased
10,000 to a seasonally adjusted 227,000 for the week ended June 22… Story at…
GDP (MarketWatch)
“The pace of growth in the U.S. economy in the first
three months of 2019 was left at 3.1%, revised government figures show, as
stronger business investment offset a weaker increase in consumer spending.” Story at…
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 rose about 0.4% to 2925.
-VIX slipped about 2% to 15.82.
-The yield on the 10-year Treasury dropped to 2.013%.
Cyclical stocks are still out-performing
the S&P 500 on a 10-day basis, a bullish signal. Utilities are still
out-performing relative to the S&P 500 (a bearish sign), but not by much.
On the whole, this suggests that this pullback may not get too much
farther.
My daily sum of 20 Indicators declined from -3 to -6 (a
positive number is bullish; negatives are bearish) while the 10-day smoothed
version that negates the daily fluctuations dropped from +13 to +1. (These
numbers sometimes change after I post the blog based on data that comes in
late.) Most of these indicators are short-term. The negative numbers are mostly
on new-high/new-low data and comparisons to the Cyclicals and Utility ETFs.
Some of these indicators are disagreeing with each other and might more
correctly be considered neutral.
The most troubling negative signal is the Smart Money
Indicator, based on late day action. It has reached extreme levels and is
signaling a top. We need more than one
indicator to call a top, so for now we won't be too concerned.
Still, I 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 27
June (The Smart Money {Late-Day action} top-indicator 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…
THURSDAY 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
Thursday, the PRICE indicator was positive; VOLUME, VIX
and SENTIMENT indicators were neutral. Overall the Long-Term Indicator
remained NEUTRAL.
