CRUDE INVENTORIES (OilPrice.com)
“Crude oil prices hesitated today after the Energy
Information Administration reported a U.S. oil inventory build of 7.5 million
barrels for the first week of February. The report came a day after the American
Petroleum Institute estimated an inventory build of 6 million
barrels.” Story at…
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 rose about 0.7% to 3379.
-VIX dropped about 9% to 13.74.
-The yield on the 10-year Treasury rose to 1.637.
The daily sum of 20 Indicators improved from +3 to
+7 (a positive number is bullish; negatives are bearish). The 10-day smoothed sum
that negates the daily fluctuations improved from -37 to -18. (These
numbers sometimes change after I post the blog based on data that comes in
late.) Most of these indicators are short-term.
We note some concerning issues for the Bulls. The S&P
500 is now 11.6% above its 200-dMA. There
were only 2 periods when the S&P 500 reached this level in the last 6+
years. Once back in Jan of 2018, for about 8-days before the top that preceded
a 20% drop in the Index and again, in May of 2013, 5-days before the top that preceded
a 6% drop. The sky isn’t falling here, but this is a rare event.
The percent of stocks making new 52-week-highs at today’s
all-time high was a good number today, so the market is not particularly narrow;
therefore, I suspect that a retreat from here will be fairly small, but bigger
than the 3% dip we saw at the end of January. This assumes the coronavirus (COVID19) doesn't become a bigger issue.
I am expecting another dip. We’ll see.
TOP / BOTTOM INDICATOR SCALE OF 1 TO 10 (Zero is a
neutral reading.)
Today’s Reading: -1
Most Recent Day with a value other than Zero: -1 on 12
February (The S&P 500 was too far above its 200-dMA when sentiment is
considered.)
(1) +10 Max Bullish / -10 Max Bearish)
(2) -4 or below is a Sell sign. +4 or higher 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.
We note that Microsoft has overtaken Apple. There’s nothing wrong with owning both. I
still like Intel, too. I’ll add them if we get another dip.
For more details, see NTSM Page at…
TUESDAY MARKET INTERNALS (NYSE DATA)
Market Internals remained
POSITIVE / BULLISH 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 45% invested in
stocks as of 27 January (down from 60%). This is a conservative 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
Wednesday, the VOLUME indicator is bullish; VIX, PRICE,
and SENTIMENT Indicators were neutral. The Long-Term Indicator is HOLD.
