“New applications for U.S. unemployment benefits fell
last week, indicating continued job growth after a slowdown in March. Initial
claims for state unemployment benefits fell 1,000 to a seasonally adjusted
232,000 for the week ended April 14…” Story at…
PHILADELPHIA FED (MarkeWatch)
“The Philadelphia Fed’s manufacturing index edged up 1
point to 23.2 in April. Any reading above zero indicates expansion.” Story at…
LEADING ECONOMIC INDICATORS (Conference Board/PRNewsWire)
“The Conference Board Leading Economic
Index® (LEI) for the U.S. increased 0.3 percent in March to
109.0 (2016 = 100), following a 0.7 percent increase in February, and a 0.8
percent increase in January…its six-month growth rate increased further and
points to continued solid growth in the U.S. economy for the rest of the
year," said Ataman Ozyildirim, Director of Business Cycles and Growth
Research at The Conference Board.” Press release from…
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 was down about 0.6% to 2693.
-VIX was Up about 2% to 15.96.
-The yield on the 10-year Treasury rose to 2.912%.
-My daily sum of 17 Indicators dropped from +8 to -3; the
10-day smoothed version dipped from +34 to +27.
Today we note a significant Bearish move in the
indicators. There was some solid late-day buying and the closing tick (last
trades of the day) totaled a bullish 419. The bulls will need to hope the buying
carries through tomorrow.
The S&P 500 dropped to its lower trend line so we
need to see the Index move higher from here. My opinion remains that the
correction ended 2 April; we just didn’t get a good buy signal on the 2nd.
Advance/decline numbers weren’t good enough compared to the low we had seen
back in February. The buy signal came 17 April due to falling VIX and improving
a variant of an on-balance-volume indicator.
Correction Over repeat:
I think the correction is over. The correction top was
2873 on 26 Jan. The bottom occurred on trading-day 45. Top to bottom the
S&P 500 registered a drop of 10.1%.
On average, corrections >10% have lasted 68-days…Corrections <10%
have lasted 32-days. The length of the correction, 45-days top-to-bottom, is
about what one would expect.
There is still a chance the
S&P 500 will retest the 8 Feb low, but I am following my long-term
indicator and I upped stock holdings. If the 10-year rates continue up, (now 2.91%) this could turn out to
be a mistake. We’ll see.
MOMENTUM ANALYSIS IS STILL QUESTIONABLE BUT IT SHOULD
IMPROVE. As one can see below in both momentum charts, many 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 slipped
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).
For me, that’s a balanced 50% stock portfolio.
INTERMEDIATE / LONG-TERM INDICATOR
Intermediate/Long-Term
Indicator: Thursday, the VIX indicator remained positive; Volume, Price and
Sentiment indicators were neutral. Overall this is a NEUTRAL indication.
MY INVESTED POSITION
Wednesday, 18 Apr
2018 I increased stock investments from 35% to 50% based on the
Intermediate/Long-Term Indicator that turned positive on the 17th.
