“The number of Americans filing for unemployment benefits
unexpectedly rose last week, but the increase was marginal, suggesting strong
job growth in March that should underpin consumer spending. nitial claims for
state unemployment benefits increased 3,000 to a seasonally adjusted 229,000
for the week ended March 17…” Story at…
LEI (Conference Board)
“The Conference Board Leading Economic
Index® (LEI)for theU.S. increased 0.6 percent in February to 108.7 (2016 =
100), following a 0.8 percent increase in January, and a 0.7 percent increase
in December. ‘The U.S. LEI rose again, despite a sharp downturn in stock markets
and weakness in housing construction in February,’ said Ataman Ozyildirim,
Director of Business Cycles and Growth Research at The Conference Board. The
LEI points to robust economic growth throughout 2018. Its six-month growth rate
has not been this high since the first quarter of 2011…’” Press release at…
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 was Down about 2.5% to 2644.
-VIX exploded UP about 31% to 23.34.
-The yield on the 10-year Treasury slipped to 2.824% as
investors bought Bonds.
Ouch. Not much left to say today – the Market said it
all. The indicators just amplify the obvious.
I sold yesterday because there were a lot of negative
signs; not the least of which was the chart that showed the S&P 500 had
failed to break higher to confirm an up-trend and then broke below the lower
trendline suggesting a down trend.
Today’s action just did more to confirm the downtrend. It broke the recent string of higher lows while
it made a lower-low on higher volume and deteriorating internals when compared
to the 19 March higher-low.
Today was an extreme day in terms of up/down volume; 90.4%
of volume was down volume. That’s an
extreme that can mark the market direction unless we have a turn-around soon. This
is the third high-down volume day in the last 3-months.
Over the last 10-days only 44% of the volume on the NYSE
has been advancing-volume and only 45.8% of the stocks on the NYSE have
advanced.
My sum of 17 Indicators slipped from -4 to -6 and the
10-day smoothed version fell from +3 to -6. That’s not encouraging. Negative
totals for indicators are bearish and the smoothed trend is down too.
There were a few bullish signs today: (1) the Index
dropped below the lower Bollinger Band (2-std deviations). This would give us a Buy indication, but RSI
did not confirm it. RSI was 41 and it needs to drop to 30 or below to confirm a
Buy signal for the Bollinger Bands. (2) Today was a statistically-significant,
down-day. That just means that the price-volume move down exceeded statistical
parameters that I track. The stats show that about 60% of the time a
statistically significant move down will be followed by an up-day the next day.
(3) Tick (sum of closing trades) was -61 at the close and that is an area where
it needs to be to make a bottom.
…Last, Smart Money {based on late day action} is actually
turning up ever so slightly. The Pros tend to buy around the bottom; not
necessarily at the bottom.
I think today’s action raises the probability that the
Index will test its prior low of 2581. That would be the norm for a correction.
Usually, the test is successful and the Index will move up quickly after the
test. Let’s hope that’s the case this time if it does in fact test the low.
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…
THURSDAY MARKET INTERNALS (NYSE DATA)
Market Internals remained
Negative 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, the VIX
and Volume indicators were negative; Price and Sentiment were neutral.
MY INVESTED STOCK POSITION:
TSP (RETIREMENT ACCOUNT – GOV EMPLOYEES) ALLOCATION
21 March, I cut
stock holdings from 50% to 35% with the remainder in a mix of stocks and
(mostly short-term) bonds. (A comparable TSP allocation would be 35% in the
S&P 500 Index fund (C-Fund) with the remainder 65% G-Fund (Government
securities). This is a conservative retiree position.
