ADP EMPLOYMENT (FXStreet)
“The ADP Employment Report printed gains of 195k jobs for
the month of August, beating the 149k figure expected. This is a strong positive
signal for Friday's Non-Farm Payrolls…” Story at…
JOBLESS CLAIMS (Reuters)
“U.S. services sector activity accelerated in August and
private employers boosted hiring, suggesting the economy continued to grow at a
moderate pace…” Story at…
FACTORY ORDERS (MarketWatch)
“Factory orders rose 1.4% in July, for the second
straight monthly gain, the Commerce Department said Thursday. The increase was
led by volatile civilian aircraft orders, primarily Boeing…” Story at…
ISM NON-MANUFACTURING (prnewswire)
“Economic activity in the non-manufacturing
sector grew in August for the 115th consecutive month, say the nation's
purchasing and supply executives in the latest Non-Manufacturing
ISM® Report On Business®…ISM®'s Business Activity Index registered 61.5
percent in August, an increase of 8.4 percentage points from the July reading
of 53.1 percent.” Story at…
MARKETS RALLY (WSJ)
“U.S. stocks rose Wednesday, following rallies in global
markets as political developments eased fears of instability in Hong Kong and a
messy Brexit.” Story at…
PAUL SCHATZ COMMENTARY EXCERPT (Heritage Capital)
“This morning, pre-market indications look for the bulls
to attempt a full-fledged assault higher and break through the month-long
trading…I fully expect semis to break out today and them run to say hello to
the all-time highs last seen in July. That’s where the important test will
come.” Commentary at…
PAUL SCHATZ, PRESIDENT, HERITAGE CAPITAL
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 rose about 1.3% to 2976.
-VIX fell about 6 to 16.27.
-The yield on the 10-year Treasury rose to 1.565%.
More bullishness – we had another strong day today.
-My MACD of Breadth has turned bullish. The MACD of S&P 500 price turned bullish 2
weeks ago and remains bullish.
-The S&P 500 moved above the 50-dMA by a good
margin. The 50d-MA is 2945.
-5-10-20 Timer system turned bullish. The 5d-EMA and the
10-dEMA are higher than the 20-dEMA.
-77% of volume on the NYSE was up, so we almost had
additional back-to-back 80% up-volume days. We’ve already recently had enough
to give very bullish indications.
As always, there are bearish signs in the mix. Bollinger Bands are overbought and the
Overbought/Oversold Index is overbought. The Index is always very early;
Bollinger Bands are responding to the strong up-move. Until we see a lot more
top indicators, I will ignore them both.
My daily sum of 20 Indicators improved 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 -12 to
-14. (These numbers sometimes change after I post the blog based on data that
comes in late.)
Today we saw more bullish signs. I think we go up from
here and will make new highs.
TOP / BOTTOM INDICATOR SCALE OF 1 TO 10 (Zero is a neutral
reading.)
Today’s Reading: -2
-The Long-term Fosback Logic Index indicator was bearish,
but this indicator isn’t valid now because the McClellan Oscillator remains
positive. Bollinger Bands are overbought.
- Most Recent Day with a value other than Zero: -2 on 5
September.
(1) +10 Max Bullish / -10 Max Bearish)
(2) -4 or below is a Sell sign. +4 or better is a Buy
Sign.
MOMENTUM ANALYSIS:
Just a reminder…During corrections, momentum is
generally not giving a very accurate picture, or at least it is giving a
correction picture – it will change significantly when the correction ends.
During the correction, Utilities will generally outperform as will similar Dow
stocks, like Verizon. Momentum here is a short-term call.
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
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 20 August 2019. This is a conservative balanced position
appropriate for a retiree.
INTERMEDIATE / LONG-TERM INDICATOR
Thursday,
the VIX, VOLUME, SENTIMENT and PRICE Indicators were neutral. Overall, the
Long-Term Indicator remained to HOLD.
