THE MOST IMPORTANT WEEK OF THE YEAR (ZeroHedge)
“…the coming week "could be the most important week of the
year." Here's why: from the next round in the escalating
trade war in the post-shocking G7 world which has seen Trump and Trudeau engage
in a "low brow" fight, to the historic Trump-Kim summit, to the all
important US CPI report (the US economy is now on the verge of overheating), to
the UK parliament's Brexit vote, to no less than three major central bank
announcements from the ECB, BOJ and FOMC, of which the latter is expected to
delivers its latest rate hike, the 7th of the cycle, while Draghi may announce
the end of QE, from continued deterioration in Italian markets and the latest
Italian bond auction especially following the latest "deposit
flight" Target2 data, to Vladimir Putin meeting
with Saudi Crown Prince Mohammed bin Salman at the opening game of the World
Cup soccer tournament potentially moving the oil-market, it will be a non-stop
bonanza of one market-moving headline to the next.” Story at…
MARKET REPORT / ANALYSIS
-Monday the S&P 500 rose about 0.1% to 2782.
-VIX rose about 1% to 12.35.
-The yield on the 10-year Treasury was little changed at
2.955%.
Advancing volume (volume on the NYSE associated with
increasing stock prices) continues to move up strongly. This follows a low for up-volume that
occurred in conjunction with the recent 10% correction closing-bottom.
My daily sum of 17 Indicators improved from +5 to +6,
while the 10-day smoothed version improved from +31 to +38. A number above zero
shows most indicators are bullish.
Bollinger Bands are no longer issuing a bearish “squeeze”
and the S&P 500 Index is now below the upper band and so it is no longer
signaling an “overbought” condition.
The overbought/oversold ratio (Based on Breadth) remains
“overbought.” Overbought conditions are not unusual after a correction bottom
as investors pile back into the market. RSI is a neutral 63 so I am not worried
about overbought signals now.
Most other indicators are bullish: Smart Money (late-day
action is bullish); Money Trend (an estimate of where $ are going) is bullish;
new-high/new-low data remains bullish.
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 (say a couple %) at that time. Unless the
markets get way ahead of themselves, there’s no point to trade small market
moves – at least that’s my take.
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…
MONDAY 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).
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: Monday, the Price and VIX Indicators remained positive; Volume
and Sentiment indicators were neutral. Overall this is a BULLISH indication.
