CONSUMER CONFIDENCE (Conference Board)
“The Conference Board Consumer Confidence
Index® decreased in November, following a slight decline in October. The
Index now stands at 125.5 (1985=100), down from 126.1 in October…"Consumer
confidence declined for a fourth consecutive month, driven by a softening in
consumers' assessment of current business and employment conditions,"
said Lynn Franco, Senior Director of Economic
Indicators at The Conference Board. "The decline in the Present Situation
Index suggests that economic growth in the final quarter of 2019 will remain
weak. However, consumers' short-term expectations improved modestly, and growth
in early 2020 is likely to remain at around 2 percent. Overall, confidence
levels are still high and should support solid spending during this holiday
season." – Press Release at…
NEW HOME SALES (Bloomberg)
“Buyers snapped up new U.S. homes over the past two
months at the fastest pace in more than 12 years, adding to signs of sturdy
housing demand amid lower prices and borrowing costs.” Story at…
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 rose about 0.2% to 3141 (another
new-high).
-VIX dipped about 3% to 11.54.
-The yield on the 10-year Treasury dipped to 1.738.
I’ve been warning of a drop/top in the S&P 500 based
on statistical analysis of price-volume since early November; that warning is
still valid.
My daily sum of 20 Indicators improved from +10 to
+11 (a positive number is bullish; negatives are bearish) while the 10-day
smoothed sum that negates the daily fluctuations rose from -10 to -2
(These numbers sometimes change after I post the blog based on data that comes
in late.) A reminder: Most of these indicators are short-term.
While a pullback or pause is suggested by a few
indicators, Seasonality is bullish for the next month and Sentiment is high,
but not extreme. Overall, indicators are quite bullish. The markets may keep
moving up for a while longer. It’s anyone’s guess regarding what will cause a
dip or when it will occur. I think we could see a dip anytime, but I expect
that it will be bought so any pullback should be relatively small – say down to
the 50-dMA, about 3-4% lower.
I remain bullish.
TOP / BOTTOM INDICATOR SCALE OF 1 TO 10 (Zero is a
neutral reading.)
Today’s Reading: 0
Most Recent Day with a value other than Zero: +2 on 3
October.
(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)
Apple is up 18% over the last 2-months. It remains #1 in
the momentum ranking.
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 60% invested in
stocks as of 7 Oct 2019 (up from 50%). This is a conservative balanced position
appropriate for a retiree. You may wish to have a higher or lower % invested in
stocks depending on your risk tolerance.
INTERMEDIATE / LONG-TERM INDICATOR
Tuesday, the VIX and PRICE indicators were
positive; the SENTIMENT and VOLUME Indicators were neutral. Overall, the
Long-Term Indicator remained BUY. The important BUY was the one we
issued 29 August; we reinforced that bullish view again on 3 October. Today’s
BUY signal just means that conditions are good. Sometimes the NTSM will issue a
buy-signal at a top. I don’t think that is the case this time – I remain
bullish. The falling VIX is a bullish signal, though we are overdue for a small
pullback.
