“Federal Reserve officials at their most recent meeting
saw an economy growing at a strong pace and inflation moving up as well, justifying
continued interest rate increases. Minutes from the March gathering of the
Federal Open Market Committee showed central bankers largely hopeful about the
direction in which the economy was headed, though with a few misgivings.” Story
at…
CPI (Reuters)
“U.S. consumer prices fell for the first time in 10
months in March, weighed down by a decline in the cost of gasoline, but
underlying inflation continued to firm amid rising prices for healthcare and
rental accommodation…The Consumer Price Index slipped 0.1 percent last month,
the first and largest drop since May 2017, after climbing 0.2 percent in
February…” Story at…
CRUDE INVENTORIES (OilPrice.com)
“The Energy Information Administration reported a build in
U.S. crude oil inventories of 3.3 million barrels for the week to April 6,
double that of API’s estimate for a 1.76-million-barrel inventory
increase, which weighed on prices yesterday.” Story at…
LABOR FORCE PARTICIPATION DISAPPOINTING (Advisor
Perspectives)
“Based on the moving average, today's age 25-54 cohort
would require 1.7 million additional people in the labor
force to match its interim peak participation rate in 2008 and 3.0 million to
match the peak rate around the turn of the century. Why are so many labor force
participants needed for a complete [Labor Force Participation Rate] LFPR
recovery? When the economy is moving at full speed, as in the late 1990s, jobs
are abundant, which encourages the population on the workforce sidelines to
join the ranks of the employed. Today's economy doesn't offer that sort of
encouragement.” – Jill Mislinsky. Charts, commentary and analysis at…
RE: “Today's economy doesn't offer that sort of
encouragement.” Imagine that. It must mean that both Obama and Trump are liars.
Imagine that.
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 was Down about 0.6% to 2642.
-VIX was Down about 1% to 20.24.
-The yield on the 10-year Treasury slipped to 2.784%.
I had hoped we might see some follow-thru from yesterday
that would indicate an end to this correction, but that was not the case today,
Wednesday. After making a high around noon the S&P 500 dropped 10 points
immediately after 3PM and closed near the lows for the day. Looks like we’ll have
to keep waiting for the market to decide which way it wants to go
-My daily sum of 17 Indicators slipped from +4 to +3; the
10-day smoothed version improved from +7 to +17. Indicators are generally turning more
bullish. To be precise, conditions are more bullish than 2-weeks ago.
Correction Update:
Today was trading-day 52 since the prior top. The S&P
500 was 8% below the top and was 2.1% above the prior correction bottom. On average, corrections >10% have lasted
68-days…Corrections <10% have lasted 32-days. The S&P 500 is 1.7% above
its 200-dMA (day moving average). The 50-day moving average (dMA) is very close
to its 100-dMA. This isn’t the Death Cross
(when the 50-day drops below the 200-day), but it could cause some more concern
among traders if the Index drops lower.
We’ve seen a lot of up and down movement with large
whipsaws each way over the last 2+ weeks.
This is typical at a top where some traders are buying the dips and
others are selling. Now, I think it just shows there’s a lot of confusion about
where the markets are headed.
I suspect it suggests we may retest the 8 Feb low again,
in spite of the indicators that are now more positive. We’ll have to wait to
see if the indicators prevail.
MOMENTUM ANALYSIS IS NOW NEARLY WORTHLESS. As one can see
below in both momentum charts, most of the issues I track are now in negative
territory, i.e., few have any 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…
Over the last 2-months, Intel (INTC) is up 14.3%; WalMart
(WMT) is down 13.8%; GE is down 12.6%. Momentum helps manage a portfolio, but
it is not a replacement for keeping track of investments.
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).
INTERMEDIATE / LONG-TERM INDICATOR
21 March, I cut
stock holdings from 50% to 35% with the remainder in a mix of stocks and (mostly
short-term) bonds. I previously reduced stock exposure on 31 Jan.
Intermediate/Long-Term
Indicator: Wednesday, the VIX indicator was bullish; Volume, Price and
Sentiment indicators were neutral. Overall, the Intermediate/Long-term
Indicator remains Neutral, but we remain Defensive based on numerous signals.
