“Oil prices finished higher Wednesday in volatile
trading, with concerns surrounding Iran and the risks to global crude supplies
helping to erase earlier losses fed by an unexpected weekly rise in U.S.
inventories.” Story at…
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 rose about 0.2% to 2639.
-VIX was Down about 1% to 17.84.
-The yield on the 10-year Treasury rose to 3.029%.
It was nice to see an up-day for a change, but declining
stocks outpaced advancing stocks today with only 43% of stocks advancing on the
day. Over the last 10-days only 49% of stocks have advanced and that’s not a
sign of a good market. A related disconcerting sign is that Breadth is falling
faster than the Index and that’s bearish.
-My daily sum of 17 Indicators declined from -5 to -6;
the 10-day smoothed version dipped from +12 to +3. More bearish signs here.
As noted yesterday, the Chart remains mired in a
downtrend and would need to break above about 2700 to make a run at changing
the trend. The 150-dMA of advancing stocks remains above 50% (51.4%) so the
current downtrend is short-term and not set in stone.
Late day action was mixed today. The Index dropped after 3PM, but recovered
some before the close and finished with a closing Tick of 218 (sum of last day
trades). The 10-dMA of closing Tick was 196. In spite of the bearish way the
market has been acting recently, there has been a fair amount of bullish late
action in the market especially buying at the close.
Money Trend is has turned down.
Repeating: We need to consider the possibility that a
retest of prior lows is likely and it may fail – if it does, I will probably
cut stock holdings again. If we see a successful test I’ll be adding to stocks.
I am expecting a break to the upside, but I have been wrong in the past
CORRECTION UPDATE
I think it is over - we'll see. The S&P 500 is currently 8.1% below its prior high and 2% above the low.
MOMENTUM ANALYSIS IS STILL QUESTIONABLE BUT GETTING
BETTER. As one can see below in both momentum charts, there are still a lot of
issues in negative territory, i.e., they have weak upward momentum. That’s just
an indication that the market is in correction mode and most stocks have been
headed down.
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. (On 5 Apr 2018 I
corrected a coding/graphing error that has consistently shown Nike
incorrectly.)
*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
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).
Thursday, 18 Apr
2018 I increased stock investments from 35% to 50% based on the
Intermediate/Long-Term Indicator that turned positive on the 17th. For me,
fully invested is a balanced 50% stock portfolio. This is not the time to
take extra risk.
INTERMEDIATE / LONG-TERM INDICATOR
Intermediate/Long-Term
Indicator: Wednesday, VIX, Volume, Price and Sentiment indicators were
neutral. Overall this is a NEUTRAL indication.
