“U.S. job growth surged in February, recording its
biggest increase in more than 1-1/2 years, but a slowdown in wage gains pointed
to a gradual increase in inflation this year. Nonfarm payrolls jumped by
313,000 jobs last month, above expectations of 200,000.” Story at…
“The February employment report resuscitated the
Goldilocks narrative. Specifically, it was highlighted by robust job growth and
a deceleration in the year-over-year change in average hourly earnings, which
helped temper the angst about increasing wage-based inflation pressures that
were borne out of the January employment report.” For more see Briefing.com at…
MARKET REPORT / ANALYSIS
-Friday the S&P 500 was Up about 1.7% to 2787.
-VIX was DOWN about 12% to 14.6.
-The yield on the 10-year Treasury rose to 2.896%.
I commented yesterday that, “If we can break meaningfully
above the 2750 region, buying may accelerate.” That’s what we got and more. The
S&P 500 Index popped above its recent high of 2780. Can we get back to all-time high of 2873?
Probably, but we need to see if the Index can hold above 2780 first.
My sum of 17 Indicators improved from +3 to +4, a bullish
indication. The smoothed version has shifted and is now headed up too.
Sentiment has pulled back a little as more Rydex-traders
have been shorting the rally off the bottom. That leaves enough room for the
Index to rise; one can usually bet against that crowd.
10-day Breadth hung in at 55% and that means over the
last 10-days, 55% of the stocks on the NYSE have moved up. That’s a nice sign
for the bulls since it shows the trend is bullish…until it isn’t.
New-high/new-low data remained bullish, too.
The buying continued into the close today – closing Tick
was +31. That’s down from recent closing action but let’s not quibble after a
day that saw the Index rise 1.7%.
Some negative signs are creeping into the narrative:
-Bollinger Bands are nearly giving an “overbought” sign,
but RSI is not. I usually like to
consider these two indicators in tandem.
The don’t agree so I am not worried.
-New-Highs are still falling when measured on a long-term
basis. Usually this indicator bottoms when the S&P 500 makes a bottom so it’s
a worry that it is falling.
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…
FRIDAY 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
Friday, the VIX
indicator was negative; Price was positive; Sentiment and Volume 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.
