“U.S. producer prices increased more than expected in
March, boosted by rising healthcare and food costs, pointing to a steady
buildup of inflation pressures…The Labor Department said on Tuesday its
producer price index for final demand rose 0.3 percent last month after
increasing 0.2 percent in February.” Story at…
SMALL BUSINESS OPTIMISM (Bloomberg)
“Sentiment among U.S. small companies took a step back in
March as a smaller share of owners said they expected business conditions to
improve in coming months, a possible reflection of concerns about the economic
impact from tariffs. Expansion plans and sales expectations also eased, pushing
the index of small-business optimism to a five-month low of 104.7, according to
the National Federation of Independent Business.” Story at…
RUSSIA STOCKS FALL AFTER US SANCTIONS (Independent)
“Russia’s main share index crashed 11 per cent on Monday after
the US imposed new sanctions on oligarchs and companies linked to Vladimir
Putin. Aluminium giant Rusal, which is controlled by Oleg
Deripaska, halved in value on the Hong Kong stock exchange on
Monday, while EN+, a holding company also owned by Mr. Deripaska, crashed by 40
per cent.” Story at…
LOUISE YAMADA (Financial Sense)
“Famed technician Louise Yamada at LY Advisors warns
that investors have been selling the rallies since the January peak, leading to
a descending triangle formation on the chart, which is typically a bearish
sign… Given these pullbacks and where markets are right now, Yamada advises
exercising restraint in equity markets. With stocks making higher lowers, we’re
seeing confirmation of the downtrend.” Commentary at…
10 REASONS THE BULL HAS ENDED (Real Investment Advice)
“I highly suggest you use any substantial rally to reduce
risk and rebalance portfolios accordingly. Why? Because I am going to out
on a limb and making a call. I think the 9-year old bull market may have
ended in February…If I am right, the conservative stance and hedges in
portfolios will protect capital in the short-term…If I am wrong, and the bull
market resumes, we simply remove hedges and reallocate equity exposure.” –
Lance Roberts. The 10-reasons along with commentary and charts are here…
My cmt: I am not going to argue with Lance Roberts. I’m not sure
he’s right about the end of the Bull, but the truth is I am already positioned for a major bear market since
I am only 35% invested in stocks. Like Roberts, I’ll get back in as soon as I
get a buy signal – possibly Wednesday…or not.
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 was Up about 1.7% to 2657.
-VIX was Down about 6% to 20.47.
-The yield on the 10-year Treasury rose 2.804%.
-My daily sum of 17 Indicators improved from +3 to +4;
the 10-day smoothed version improved from -7 to +8. Indicators are generally turning more
bullish. To be precise, conditions are more bullish than 2-weeks ago.
Correction Update:
Today was trading-day 51 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 2.6% above
its 200-dMA (day moving average).
The Index is at a resistance point, but if it can break
higher it could clear the way for the S&P 500 to make it back to around
2785.
The question for tomorrow (Wednesday) is, “Will we see
another strong up-day that would signal some follow-thru and possibly an end to
this correction?” We’ll see.
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…
TUESDAY 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: Tuesday, the VIX indicator was bullish; Volume, Price and
Sentiment indicators were neutral. Overall, the Intermediate/Long-term
Indicator remains Neutral.
