JOBLESS CLAIMS (Reuters)
“The number of Americans filing applications for
unemployment benefits unexpectedly rose last week, which could add to concerns
that the labor market was losing steam after job growth slowed sharply in May…
Initial claims for state unemployment benefits rose 3,000 to a seasonally
adjusted 222,000 for the week ended June 8.” Story at…
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 rose about 0.4% to 2892.
-VIX dipped about 0.6% to 15.82.
-The yield on the 10-year Treasury dipped to 2.090%.
My daily sum of 20 Indicators improved slightly from +5
to +6 (a positive number is bullish; negatives are bearish) while the 10-day
smoothed version that negates the daily fluctuations improved from +8 to +24.
(These numbers sometimes change after I post the blog based on data that comes
in late.) Most of these indicators are short-term.
Not too much to say; “Looking Good Billy Ray! Feeling Good
Lewis!
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 31
May (Bollinger Bands were bullish.)
(1) +10 Max Bullish / -10 Max Bearish)
(2) -4 or below is a Sell sign. +4 or better is a Buy
Sign.
MOMENTUM ANALYSIS:
I believe the correction/pullback has ended so momentum
analysis should get more valuable. Remember, XLU (utilities) is highly rated,
but that is probably a holdover from the pullback when utilities almost always
outperform.
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…
FYI, I bought a significant position in Microsoft last
Tuesday as I was increasing stock holdings since it was one of the top momentum
plays in my system. Its PE was 27.8. Its PE was twice that a year ago, so it
looks like MSFT has room to run higher as long as it remains highly ranked in
momentum. The PE for the S&P 500 is 26.7 today so MSFT is not overpriced.
THURSDAY MARKET INTERNALS (NYSE DATA)
Market Internals
remained to POSITIVE 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, VOLUME and PRICE indicators were positive; VIX
and SENTIMENT indicators were neutral. Overall the Long-Term Indicator
improved to BUY. This doesn’t mean much; I issued a BUY recommendation on 4
June, the day after the bottom.
