INDUSTRIAL PRODUCTION (Marketwatch)
“U.S. industrial production jumped 0.6% in August, the
largest increase in a year, the Federal
Reserve reported Tuesday.” Story at…
PAUL SCHATZ COMMENTARY EXCERPT (Heritage Capital)
“Last week, semiconductors scored a fresh, all-time high.
As you know, this is a group I have been very positive on all year and
especially over the past few months as it began to outperform with each passing
tariff tantrum tweet. In other words, semis began to behave better and ignore
what seemed to be bad news on the trade front. At the same time, consumer
discretionary is right back to the July highs. Banks and transports are
threatening to break out. That would make all four key sectors in gear
together. What a change from the summer concerns.” Commentary at…
OFF TOPIC - NY TIMES CRITICIZED (Politico)
“The Times revealed a fresh allegation of sexual
misconduct by Kavanaugh while a student at Yale University in a Sunday Review
piece by reporters Robin Pogrebin and Kate Kelly, who are co-authors of the new
book, rather than through a traditional news story. In addition, the authors omitted
a key piece of information — the fact that the alleged victim of the incident
didn’t remember it…” Commentary at…
My cmt: Good heavens; how the mighty have fallen! The
Times was even criticized by liberal feminists on this one. Here’s what Trump
Tweeted on this subject: “This is all about the LameStream Media working with
their partner, the Dems.”
-Tuesday the S&P 500 rose about 0.3% to 3006.
-VIX dipped about 2% to 14.44.
-The yield on the 10-year Treasury slipped to 1.803%.
Markets are waiting for the Fed meeting tomorrow, so we
probably didn’t get much information today.
My daily sum of 20 Indicators remained +5 (a
positive number is bullish; negatives are bearish) while the 10-day smoothed
version that negates the daily fluctuations improved from +71 to +79.
(These numbers sometimes change after I post the blog based on data that comes
in late.)
RSI did give an overbought reading today, but that is the
only top indicator in play today.
Overall, I remain bullish.
TOP / BOTTOM INDICATOR SCALE OF 1 TO 10 (Zero is a
neutral reading.)
Today’s Reading: -1
-RSI was negative.
- Most Recent Day with a value other than Zero: -1 on 17
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:
TODAY’S RANKING OF
15 ETFs (Ranked Daily)
The top ranked ETF receives 100%. The rest are then ranked
based on their momentum relative to the leading ETF. While momentum isn’t stock performance per
se, momentum is closely related to stock performance. For example, over the
4-months from Oct thru mid-February 2016, the number 1 ranked Financials (XLF)
outperformed the S&P 500 by nearly 20%. In 2017 Technology (XLK) was ranked
in the top 3 Momentum Plays for 52% of all trading days in 2017 (if I counted
correctly.) XLK was up 35% on the year while the S&P 500 was up 18%.
*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…
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 20 August 2019. This is a conservative balanced position
appropriate for a retiree.
INTERMEDIATE / LONG-TERM INDICATOR
Tuesday, the VOLUME indicator
was positive; PRICE, SENTIMENT and VIX Indicators were neutral. Overall, the
Long-Term Indicator remained HOLD.
