“A day after the API’s estimated oil inventory draw of 6
million barrels failed to impress the market, the Energy Information
Administration may have succeeded after
reporting a draw of 1.4 million barrels of crude for the week to August 3.”
Story at…
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 was early unchanged at 2858.
-VIX dropped about 1% to 10.85.
-The yield on the 10-year Treasury was down to 2.960% as
of this post.
Currently, my daily sum of 17 Indicators dropped from +1
to -3 while the 10-day smoothed version that negates the daily fluctuations fell
from +7 to zero. Just like that – indicators reverse down, but not drastically.
A -3 on the day isn’t extremely bearish, so no panic yet.
Topping indicators are not overly bearish.
-Bollinger Bands are close to giving an overbought
indication, but RSI is still in neutral territory. I work these two together so
this is a neutral indication.
-Breadth vs. the S&P 500 index is beginning to suggest
the Index is overbought, but it isn’t there yet.
-Statistical analysis of daily market moves shows the
market is too calm – that’s the calm before the storm. This indicator has not
been reliable recently so we can’t get worked up over this one.
-The Index is close to its short-term upper trend line so
we could be due for a pullback of a couple %.
Conversely, this could also be a fake-out given that the Index could
power thru the trend line up to the old highs and the longer-term, trend-line.
All in all, not too many bear signs; however, a really
big up-day (>1%) might indicate a short-term top since the Index is near its
upper trend-line. A drop of a couple of % would be expected if we get that big up-day. This is probably the most likely scenario. I remain fully
invested.
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.
*I rank the Dow 30 similarly to the ETF ranking system.
For more details, see NTSM Page at…
WEDNESDAY MARKET INTERNALS (NYSE DATA)
Market Internals declined
to 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).
18 Apr 2018 I
increased stock investments from 35% to 50% based on the Intermediate/Long-Term
Indicator that turned positive on the 17th. (It has since turned Neutral.) For
me, fully invested is a balanced 50% stock portfolio. 50% is my minimum unless
I am in full defense mode.
On 10 May 2018 I
added stock positions to increase Stock investments to 58% based on more
evidence that the correction is over. This is high for me given that we are
late in this cycle (and as a retiree), but it indicates my bullishness after
the correction. I’ll sell these new positions quickly if the market turns down.
INTERMEDIATE / LONG-TERM INDICATOR
Intermediate/Long-Term
Indicator: Wednesday, the Price indicator was positive; Volume, VIX &
Sentiment indicators were neutral. Overall this is a NEUTRAL indication.
