JOBLESS CLAIMS (Reuters)
“The number of Americans filing for unemployment benefits
rebounded from a near 45-year low last week, but remained below a level that is
associated with a tightening labor market. Initial claims for state
unemployment benefits increased 7,000 to a seasonally adjusted 230,000 for the
week ended Feb. 10...
PPI…” Story at…
EMPIRE MANUFACTUIRNG (xinhuanet)
“Manufacturing firms in U.S. New York State reported that
business activity continued to expand, though at a somewhat slower pace than
last month, according to a report released on Thursday. The February Empire
State Manufacturing Survey showed its headline general business conditions
index fell five points to 13.1…” Story at…
PHILLY FED (Nasdaq.com)
“A report released by the Federal Reserve Bank of
Philadelphia on Thursday unexpectedly showed a faster rate of growth in
regional manufacturing activity in the month of February. The Philly Fed said
its index for current manufacturing activity climbed to 25.8 in February from
22.2 in January, with a positive reading indicating growth.” Story at…
INDUSTRIAL PRODUCTION (CNBC)
“U.S. factory output was flat for the second straight
month in January, raising questions about the manufacturing outlook as
production dropped in the aerospace, plastics and food industries…. Overall
industrial production fell 0.1 percent in January…” Story at…
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 was up about 1.2% to 2731.
-VIX was down about 0.7% to 19.13.
-The yield on the 10-year Treasury slipped to 2.903%.
We saw High unchanged-volume today. That’s a sign that
investors are confused; some think it is a bearish sign, although I was never
able to confirm that as an indicator. Either way, we are at a possible trouble
point for the bulls.
The Fibonacci resistance levels are 38.2%, 50%, and 61.8%.
We are now at the 50% retracement level. If the Index were to go 2% higher it would
be the at the 61.8% retracement level. So, we are reaching zones where the
bounce may stall, if you believe that sort of thing. I’ve always thought a return half-way to the
previous high was a point of high resistance – without using the “F” word. A
more important fact may be that a bounce after a big drop in a “normal”
correction usually stalls in this zone. Subsequently, I’d expect a lot of turbulence
followed by an eventual re-test of the low.
This may not be a normal event – we’ll see.
The S&P 500 is down 4.9% from its recent high; this
is day 15 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 improved from -4 to 0 today – a neutral
indication. The smoothed version is still headed down.
Repeating: The S&P 500 remains in a zone that is
critical. If the Index can move higher for another day or two (or break above Fibonacci
resistance level for believers), a “V” correction is likely with the Index
making a quick recovery near the prior highs is more 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…
THURSDAY 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
Thursday,
Sentiment, Price, Volume and VIX Indicators were negative; New-High/New-Low
data was positive.
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.
