SMALL BUSINESS OPTIMISM
“The NFIB Small Business Optimism Index fell 1.6 points
to 103.1, remaining within the top 15 percent of readings. Overall, August was
a good month for small business. However, optimism slipped because fewer owners
said they expect better business conditions and real sales volumes in the
coming months.” Commentary at…
JOLTS (Advisor Perspectives)
“U.S. job openings fell for a second straight month in
July amid decreases in wholesale trade and the federal government, bolstering
economists’ views that job growth has peaked.” Story at…
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 was up a point to 2979.
-VIX dipped about 0.5% to 15.2.
-The yield on the 10-year Treasury increased to 1.733%.
Today was a lot like yesterday. Again, internals looked
good today: 1712 issues on the NYSE advanced while only 1218 declined; there
were 82 new 52-week highs and only 10 new lows; and up-volume outpaced down--volume
2,904,000,000 to 1,572,000,000.
Like yesterday, the S&P 500 was little changed. We have a spring (the S&P 500) that is
coiled for release. That release will push
the S&P 500 higher.
Don’t believe me? A lot of stocks were up today. The NYSE
Composite was up 0.26% and the Pros seem to agree – there was nearly a half
percent gain in the last hour of the day.
My daily sum of 20 Indicators increased from +10
to +12 (a positive number is bullish; negatives are bearish) while the 10-day
smoothed version that negates the daily fluctuations improved from +4 to
+24. (These numbers sometimes change after I post the blog based on data that
comes in late.)
I remain bullish.
TOP / BOTTOM INDICATOR SCALE OF 1 TO 10 (Zero is a
neutral reading.)
Today’s Reading: -1
-The Long-term Fosback Logic Index indicator was bearish,
but this indicator isn’t valid now because the McClellan Oscillator remains
positive.
- Most Recent Day with a value other than Zero: -1 on 10
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…
TUESDAY MARKET INTERNALS (NYSE DATA)
Market Internals remained
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
Tuesday, the VOLUME indicator
was positive; VIX, SENTIMENT and PRICE Indicators were neutral. Overall, the
Long-Term Indicator remained to HOLD.
