PERSONAL SPENDING / PERSONAL INCOME (CNBC)
“Consumer spending rose 0.4% as households boosted
purchases of motor vehicles and spent more at restaurants and on hotel
accommodation. Consumer spending in May was supported by a 0.5% rise in
personal income, which matched April’s increase.” Story at…
PCE PRICE INDEX (fxstreet.com)
“According to the monthly data published by the U.S.
Bureau of Economic Analysis,
the core Personal Consumption Expenditures Price Index, the Federal Reserve
preferred gauge of inflation, rose 1.6% in May to match the previous reading
and the market expectation.” Story at…
The numbers show inflation is in check.
CHICAGO PMI (MarketWatch)
“A measure of business conditions in the Chicago region
fell in June into contraction territory for the first time since January 2017.
The Chicago PMI business barometer declined to 49.7 in June…” Story at…
SLOWDOWN (RECESSION) HAS ALREADY STARTED (Business
Insider)
“Those who constantly ask "where is the
recession?", well, these findings are dedicated to you. The recession
likely already started in the first quarter, and think how liberating it is to
know that the stock market
meltdown in Q4 wasn't for naught. And that the bond market has
continued to price in the same situation even as the stock market gains
momentum on the hope that Fed rate cuts will save us from a severe downturn. I
wouldn't be holding my breath…” Commentary at…
MARKET REPORT / ANALYSIS
-Friday the S&P 500 rose about 0.6% to 2942.
-VIX slipped about 5% to 15.08.
-The yield on the 10-year Treasury slipped to 2.006%.
I expressed some concern that the Smart Money has been
selling lately, based on late-day action over the last 2-weeks. That concern
was reduced a lot today as the S&P 500 jumped 10 points in the final half
hour of trading. As a result, the Smart Money top-indicator switched back to
neutral. Overall, a number of indicators improved.
My daily sum of 20 Indicators increased from -6 to +5 (a
positive number is bullish; negatives are bearish) while the 10-day smoothed
version that negates the daily fluctuations remained +1. (These numbers
sometimes change after I post the blog based on data that comes in late.) Most
of these indicators are short-term.
I 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 27
June (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…
FRIDAY MARKET INTERNALS (NYSE DATA)
Market Internals improved
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
Friday, the PRICE indicator was positive; VOLUME, VIX and
SENTIMENT indicators were neutral. Overall the Long-Term Indicator remained
NEUTRAL.
