“The consumer-price
index leaped 0.5% in January to mark the biggest increase in
five months, adding to recent worries about rising inflation. The cost of rent,
clothes, gasoline, health care and auto insurance all rose.” Story at…
RETAIL SALES (Reuters)
“U.S. retail sales unexpectedly fell in January,
recording their biggest drop in nearly a year, as households cut back on
purchases of motor vehicles and building materials. The Commerce Department
said on Wednesday that retail sales decreased 0.3 percent last month…” Story
at…
CRUDE INVENTORY (OilPrice.com)
“After reporting two consecutive weekly crude oil
inventory builds, this week the EIA continued with
another build, of 1.8 million barrels for the week to February 9."
TRUMP BUDGET (Financial Sense)
“President Trump released his first budget proposal yesterday. At first glance, it
looks pretty ugly where the concept of fiscal responsibility is concerned…
Assuming the future plays out as he proposes, President Trump’s tenure in
office would appear set to add the second-most amount of debt to the nation’s
total public debt outstanding of any US President, following only Barack Obama’s dubious achievement.”
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 was up about 1.3% to 2699.
-VIX was down about 23% to 19.26.
-The yield on the 10-year Treasury slipped to 2.922%.
The S&P 500 is down 6.1% from its recent high; this
is day 14 in the correction. If the bottom was 8 Feb, then this “correction”
lasted 10-days top to bottom. A 2-week
correction is awfully short and difficult to believe.
My sum of 17 Indicators deteriorated from -2 to -4 today.
(A “-” number means that most indicators are bearish.) The 10-day versions of
this indicator (designed to avoid the daily fluctuation) was flat – a neutral
indication. The smoothed version is still headed down.
Changes from yesterday’s indicators are more bearish than
not and I won’t list them all here. But some key ones:
-New-high/new-low data turned down and is now negative on
the market.
-Money Trend is still falling; it didn’t turn up as I
guessed it might yesterday so this indicator is still bearish.
The S&P 500 is in a zone that is critical. If the
Index can move higher for another day or two and new-highs can outpace
new-lows, a “V” correction is likely with the Index making a quick recovery near
the prior highs is likely. If not, the bounce may be over and the correction may
look more like the typical correction that includes a lot of choppiness after
the bounce and a retest of the recent low. We’ll see.
TODAY’S RANKING OF
15 ETFs (Ranked Daily)
In corrections
this chart may be less valuable – all stocks are falling.
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)
In corrections
this chart may be less valuable – all stocks are falling.
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
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).
LONG TERM INDICATOR
Wednesday,
Sentiment, Volume and VIX Indicators were negative; Price remained neutral.
MY INVESTED STOCK POSITION:
TSP (RETIREMENT ACCOUNT – GOV EMPLOYEES) ALLOCATION
I remain 40%
invested in stocks and 60% in cash as of 31 Jan or 50% in the S&P 500 Index
fund (C-Fund) with the remainder 50% G-Fund (Government securities). For none
Government employees holding short-term bonds would be OK rather than 60% cash.
