“U.S. retail sales rebounded in March after three
straight monthly declines as households boosted purchases of motor vehicles and
other big-ticket items, suggesting consumer spending was heading into the
second quarter with some momentum… The Commerce Department said on Monday
retail sales increased 0.6 percent last month after an unrevised 0.1 percent
dip in February.” Story at…
EMPIRE MANUFACTURING (Advsor Perspectives)
“Business activity grew at a solid clip in New York
State, according to firms responding to the April 2018 Empire State
Manufacturing Survey. The headline general business conditions
index, at 15.8, remained firmly in positive territory…”
Charts and analysis at…
RETEST OF THE LOW IS COMING (CNCB)
“He's a Wall Street bear who sees more monster market
moves coming — with the majority of them leaving stocks deep in the red…The
Bleakley Advisory Group's Peter Boockvar warns there's more trouble brewing,
because the era of easy money is ending, thanks to global central banks hiking
borrowing costs…"We're late cycle in the market. We're late cycle in the
economy, and you have an intensification in a tightening of monetary
policy," he said.” Story at…
MARKET REPORT / ANALYSIS
-Monday the S&P 500 was Up about 0.8% to 2678.
-VIX was Down about 5% to 16.56.
-The yield on the 10-year Treasury was little changed at
2.828%.
The S&P 500 broke above the upper limit of the
Ascending Triangle chart pattern I mentioned Friday. This will be considered a
bullish breakout if it can remain higher for another day or if the Index can get
3% above the resistance line. Unfortunately, we broke one bear pattern only to
be faced with more resistance – the Index is only 0.3% below its 50-dMA and 0.8%
below its 100-dMA.
I’ve seen a couple of commentaries that stocks should
recover because investors are more bearish. That may be what the investor
surveys show, but I’d rather follow what investors are actually doing. Based on
investments in long/short Rydex funds, investors are more bullish now than when
the correction started. At the top (26 Jan) sentiment was 80% (5-dMA
Bulls/{Bulls+Bears}). Friday it was 83%. Don’t count on this correction ending
because sentiment is Bearish – it’s not.
-My daily sum of 17 Indicators slipped from +0 to +4; the
10-day smoothed version rose from +22 to +30.
Correction Update:
Today was trading-day 55 since the prior top. The S&P
500 was 6.8% below the top and was 3.3% above the prior correction bottom. On average, corrections >10% have lasted
68-days…Corrections <10% have lasted 32-days. The S&P 500 is 3% above
its 200-dMA (day moving average).
I still suspect that we will
dip again and I expect that we will retest the 8 Feb low. At that point we
should have a better idea whether this correction will end or continue.
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…
MONDAY 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).
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: Monday, the Volume indicator turned positive; VIX, Price and
Sentiment indicators were neutral. Overall, the Intermediate/Longterm Indicator
remains Neutral, but we are Defensive based on numerous signals.
