“Orders for long-lasting or “durable” goods jumped 2.6%
in March, riding a big increase in contracts for Boeing planes. Yet orders were
flat minus transportation and business investment fell for the third time in
four months.” Story at…
JOBLESS CLAIMS (Bloomberg)
“U.S. filings for unemployment benefits plunged to the
lowest level since 1969, mainly reflecting the return of educational service
workers in New York state, figures showed Thursday.” Story at…
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 rose about 1% to 2667.
-VIX was Down about 9% to 16.24.
-The yield on the 10-year Treasury slipped to 2.981%.
Late day action was down today and closing Tick (sum of
last day trades) was -82. It’s impossible to know whether the late-day selling
was simply profit taking by traders or a real turning point, i.e. a return to
selling. The day was a statistically-significant up-day. That just means that
the price-volume move up exceeded statistical parameters that I track. The
stats show that about 60% of the time a statistically significant move up will
be followed by a down-day the next day, but not always. The big move today
could be the sign that investors are beginning to feel like the earnings are
good enough to forget the correction. Statistically-significant days seem to
clump at Tops (when confusion leads to a series of up and down days) and at Bottoms
as buyers jump in. We’ll need to see
some upward follow-through to conclude investors are ready to buy with conviction.
It’s not that I am particularly bearish now, I think we’ve seen the bottom, but
apparently other investors have not agreed with me so far.
My daily sum of 17 Indicators improved from -6 to -5; the
10-day smoothed version dipped from +3 to -6, so it’s a mixed bag. I don’t see any indicators giving very strong Buy
or Sell signals right now.
We’re still watching 2700 as a point that would suggest a
change in trend on the charts if the Index can break above that level. Actually,
this is very close to the 50-day-moving-average (50-dMA) so we might just say
we need to break above the 50-day and stay there for 2-days to feel better
about my “correction over” call.
My plan ahead is: if there is an unsuccessful retest of
prior lows, 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.
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…
THURSDAY MARKET INTERNALS (NYSE DATA)
Market Internals improved
to 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).
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: Thursday, VIX, Volume, Price and Sentiment indicators were
neutral. Overall this is a NEUTRAL indication.
