“The job market is hot, and could get hotter. Businesses
added 235,000 jobs in February, payroll processor ADP said Wednesday, more
than the 200,000 gains economists had expected.” Story at…
BEIGE BOOK (Marketwatch)
“The report gives the Fed a lot of good reasons to
continue hiking rates when officials meet in two weeks. Fed Chairman Jerome
Powell and many of his colleagues have expressed confidence in speeches that
inflation will move higher. A rate hike at the March meeting is considered a
done deal by the market.” Story at…
CRUDE INVENTORIES (OilPrice.com)
“The Energy Information Administration reported a
2.4-million-barrel build in crude oil inventories for last week.” Story at…
PRODUCTIVITY (The Fresno Bee)
“U.S. productivity showed no gain in the fourth quarter,
the poorest performance since an outright decline in the first quarter of 2016.
It was further evidence of the struggles the country is facing in boosting
worker efficiency.” Story at…
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 slipped 1pt to 2727.
-VIX was DOWN about 3% to 17.76.
-The yield on the 10-year Treasury was 2.885% at 4:56 PM.
We were Trumped today. Until yesterday afternoon, Wall
Street believed that Trump’s tariffs were a bluff to better the long-sought NAFTA
re-negotiation deal. When his economic
adviser, Gary Cohn, quit yesterday, the futures fell more than 1% almost
immediately. Cohn was considered a friend of Wall St, but more importantly, his
resignation signaled the tariffs are real since Cohn was opposed to tariffs. Markets
opened down 1% but, improved all day. Today we learned that Cohn had been
expected to resign before the tariff announcement. Tariffs? It’s anybody’s
guess, but steel prices are rising in anticipation of tariffs. Tariffs? Wow! Is
it 1929 again?
My sum of 17 Indicators remained 0, a neutral indication.
The smoothed version remained pointing down.
Late-day action was again very bullish and Closing Tick
(sum of last trades of the day) was a very bullish +333. The Pros appear to be
bullish. Breadth climbed to 55% and that means over the last 10-days, 55% of
the stocks on the NYSE have moved up.
The Index remains 0.4% below its 50-dMA (2739). It still
needs to break above it before we feel more positive.
Repeating: I am still not sure where this market is going
in the short-run. But I’ll be a seller of the S&P 500 drops much below
2700.
2700 is around the lower trend line of an up-trending
channel. I am guessing we’ve seen the low and the market is slowly
recovering. This tariff stuff is a
wild-card that could torpedo the recovery and send us back into correction.
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)
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
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).
LONG TERM INDICATOR
Wednesday, the
VIX indicator was negative; Volume, Sentiment and Price were neutral.
MY INVESTED STOCK POSITION:
TSP (RETIREMENT ACCOUNT – GOV EMPLOYEES) ALLOCATION
27 February, I
increased stock holdings from 40% to 50% with the remainder in a mix of stocks
and (mostly short-term) bonds. (A comparable TSP allocation would be 50% in the
S&P 500 Index fund (C-Fund) with the remainder 50% G-Fund (Government
securities). This is a conservative retiree position.
