“The US economy grew faster than expected in the first
quarter, according to the Commerce Department's initial estimate of gross
domestic product released Friday.
GDP,
the value of all goods and services produced within the US, increased at an
annualized rate of 2.3%, down from 2.9% in the fourth quarter.” Story at…
MICHIGAN SENTIMENT (MarketWatch)
“The final reading of the University of Michigan consumer
sentiment index was 98.8, up from the initial reading of 97.8
but still below March’s level of 101.4.
Current economic conditions fell sharply, though
expectations were basically unchanged.” Story at…
INTEL SOARS (Reuters)
“Intel Corp (INTC.O) beat earnings expectations for the
first quarter and raised its full-year revenue and profit forecasts on
Thursday, driven by the biggest-ever quarterly jump in its data centre business
and small-but-steady growth in its personal computer business. Shares of the
Santa Clara, California-based chipmaker rose 5.4 percent to $55.95 in
after-market trading…” Story at
Regular readers know we have been Intel fans for some
time. It’s up 10.9% over the last 2-months and that is during a correction.
Facebook is down 2% over the same period.
MARKET REPORT / ANALYSIS
-Friday the S&P 500 rose about 0.1% to 2670.
-VIX was Down about 5% to 15.41.
-The yield on the 10-year Treasury slipped to 2.959%.
The chart of the S&P 500 showing a “symmetrical
wedge” pattern indicated by the blue lines in the following chart. This is a
neutral pattern that usually (9-times out of 10) breaks out on higher volume in
the direction of the “existing trend” according to Investopedia.
The trouble is that it’s hard to say whether the existing
trend is up or down. The longer-term trend is down, but it has been up since 2
April. We need to see whether the Index will break above the upper trend line
or fall below the lower trend-line. If
the Index can break above the upper trend line and stay there for 2 closes, it
will “confirm” that the longer-term trend has turned to the upside. A failure to break higher here will cause
more selling.
My daily sum of 17 Indicators improved from -5 to +2; the
10-day smoothed version improved from -6 to -4.
I don’t see any indicators giving very strong Buy or Sell signals right
now.
As noted above, we’re still watching the upper trend line
{50-day-moving-average (50-dMA)}. If it can break higher and stay there for
2-days I’ll feel better about my “correction over” call.
My plan ahead is: if the S&P 500 drops to its prior
low of 2581 and there is an unsuccessful retest, 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…
FRIDAY MARKET INTERNALS (NYSE DATA)
Market Internals
improved to 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).
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: Friday, the VIX indicator was positive; Volume, Price and
Sentiment indicators were neutral. Overall this is a NEUTRAL indication.
