“New orders for U.S.-made goods fell more than expected
in April, weighed down by declines in demand for transportation equipment and
machinery, but the underlying trend continued to suggest strong momentum in the
manufacturing sector.” Story at…
ISM SERVICES (Modern Materials Handling Newsletter)
“The May edition of the Institute for Supply Management’s
(ISM) Non-Manufacturing Report on Business was strong and continued the ongoing
growth thesis for the sector. The index ISM uses to measure non-manufacturing
growth—known as the NMI–headed up 1.8% to 58.6 (a reading above 50 indicates
growth) in May…” Story at…
JOLTS (Bloomberg)
“U.S. job openings unexpectedly rose to a fresh record in
April, with vacancies increasingly exceeding the number of unemployed workers
amid a robust labor market, Labor Department data showed Tuesday.”
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 was up about 0.1% to 2749.
-VIX dropped about 3% to 12.40.
-The yield on the 10-year Treasury slipped to 2.917%.
My daily sum of 17 Indicators slipped from +6 to +4,
while the 10-day smoothed version improved from +15 to +17. The key takeaway is
that conditions are better now than they were 2-weeks ago. A number above zero shows
most indicators are bullish.
Money Trend is moving up; Breadth looks good; new-highs are
increasing and the new-high/new-low data looks good; the size of the up moves
is exceeding the size of down moves on the S&P 500. The biggest negative
now is the Bollinger Band indication.
Bollinger Bands are still giving a squeeze indication and
the Index (S&P 500) is very close to its upper band indicating the Index is
nearly 2-std deviations above its 20-day average. Other indicators are not yet
confirming issues with the markets and that includes RSI. RSI is a neutral 59.
I use RSI and Bollinger Bands together.
My longer-term indicator system remains bullish and I
remain a bull.
MOMENTUM ANALYSIS:
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 had 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 switched
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).
18 Apr 2018 I
increased stock investments from 35% to 50% based on the Intermediate/Long-Term
Indicator that turned positive on the 17th. (It has since turned Neutral.) For
me, fully invested is a balanced 50% stock portfolio. 50% is my minimum unless
I am in full defense mode.
On 10 May 2018 I
added stock positions to increase Stock investments to 58% based on more
evidence that the correction is over. This is high for me given that we are
late in this cycle (and as a retiree), but it indicates my bullishness after
the correction. I’ll sell these new positions quickly if the market turns down.
INTERMEDIATE / LONG-TERM INDICATOR
Intermediate/Long-Term
Indicator: Tuesday, the Price and VIX Indicators remained positive; Volume and
Sentiment indicators were neutral. Overall this is a BULLISH indication.
