“New applications for U.S. unemployment benefits fell
last week, pointing to sustained labor market strength despite a sharp slowdown
in job growth in March…Initial claims for state unemployment benefits dropped
9,000 to a seasonally adjusted 233,000 for the week ended April 7…” Story at…
PAUL RYAN TO RETIRE (MarketWatch)
“…the most fiscally irresponsible politician America has
ever seen said today that he will
retire from Congress…He spent his career, first as chair of the
House Budget and Ways and Means committees, and later as speaker, devoted to cutting
taxes so much it would force deep cuts in popular entitlement programs, mostly
Social Security and health insurance, that actually dominate the non-defense
part of the federal budget. Then he wanted to use those cuts to balance the
budget, and leave behind a constitutional amendment forcing Washington to
balance each year’s spending and taxation.
He failed, utterly. And he will leave behind a messy,
stagnating economy…hampered and hamstrung by the very policies Ryan championed.
And his focus on tax cuts over all goals means the poor sap who gets his job
won’t be able to fix it…” – Tim Mullaney. Commentary at…
My cmt: Regular readers know that I am pretty much
apolitical – I dislike all Politicians – but I am particularly angry at
Republicans because they used to stand for Fiscal Responsibility, a hot button
for me. Now they are just cut-tax-and-spend politicians whose policies, at a
time of extreme National Debt, are reckless and incompetent. Don’t get me
started on the Democrats.
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 was Up about 0.8% to 2664.
-VIX was Down about 9% to 18.49.
-The yield on the 10-year Treasury rose to 2.839%.
-My daily sum of 17 Indicators crept up from +3 to +4;
the 10-day smoothed version improved from +17 to +25. Indicators are generally turning more
bullish. To be precise, conditions are more bullish than 2-weeks ago.
Correction Update:
Today was trading-day 53 since the prior top. The S&P
500 was 7.3% below the top and was 2.8% above the prior correction bottom. On average, corrections >10% have lasted
68-days…Corrections <10% have lasted 32-days. The S&P 500 is 1.4% above
its 200-dMA (day moving average).
The 50-day moving average fell below its 100-dMA and the
market yawned. Looks like we don’t need to worry about this.
The S&P 500 is slowly
creeping up. The most recent 4-highs have been 2659, 2663, 2664 and today 2664
again. As I commented recently, the Index needs to break thru this area of
resistance and then we should see some more buying. Whether this could end the
correction is an unknown, but usually corrections retest the lows until market
internals are appreciably improved – we haven’t gotten there yet. There’s no
guarantee though; we could see the market shrug off the lows and move on. My
bet is that we will dip again and I expect that we will retest the 8 Feb low,
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…
THURSDAY 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: Thursday, 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.
