“U.S. worker productivity increased less than initially
thought in the first quarter, while growth in unit labor costs was a bit
stronger, supporting views that inflation pressures were steadily building up. The
Labor Department said on Wednesday nonfarm productivity, which measures hourly
output per worker, rose at a 0.4 percent annualized rate in the January-March
quarter, instead of the 0.7 percent pace it reported last month.” Story at…
CRUDE INVENTORIES (Oilprice.com)
“A day after American Petroleum Institute estimated a
solid build in
gasoline inventories that pressured West Texas Intermediate, the Energy
Information Administration added to the bearish mood by reporting a build in
both crude oil and gasoline inventories for the week ending June 1.
Crude oil stockpiles, the authority said, rose by 2.1 million barrels in
the week to June 1…” Story at…
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 was up about 0.9% to 2772.
-VIX dropped about 6% to 11.64.
-The yield on the 10-year Treasury rose to 2.970%.
My daily sum of 17 Indicators improved from +4 to +5,
while the 10-day smoothed version improved from +17 to +19. The key takeaway is
that conditions are better now than they were 2-weeks ago. A number above zero
shows most indicators are bullish.
Bollinger Bands are still issuing a bearish “squeeze”
warning because the upper and lower bands (2-std deviations from the 20-day
median) are close together. In addition, the Index is now above the upper band
and that’s signaling an “overbought” condition. The overbought/oversold ratio
is also “overbought.” This one is based on breadth and the % of advancing
stocks has been high recently. These are the bearish indicators.
Bullish indicators from yesterday remained 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; late-day action
(theoretically the Smart Money) is up; closing Tick (sum of last trades of the
day) was a strong +776. We’ll keep an eye on this stat to be sure it doesn’t
get too bullish.
Neutral Indicators: RSI is a neutral 59 so this is not
confirming the Bollinger Band overbought indication.
My longer-term indicator system remains bullish and I
remain a bull. I’ll pay attention when the Index reaches the vicinity of 2800; we
could be due for a small pullback of a couple % then.
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…
WEDNESDAY MARKET INTERNALS (NYSE DATA)
Market Internals
switched 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).
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: Wednesday, the Price and VIX Indicators remained positive;
Volume and Sentiment indicators were neutral. Overall this is a BULLISH
indication.
