“The economy added a healthy 250,000 jobs in
October, the Labor Department said Friday in the last employment report before
midterm elections that President Donald Trump has cast as a critical referendum
on his stewardship of the economy.” Story at…
FACTORY ORDERS (Reuters)
“New orders for U.S.-made goods increased more than
expected in September, but softening business spending on equipment suggested
the manufacturing sector could be slowing. Factory goods orders rose 0.7
percent amid strong demand for transportation equipment…” Story at…
MARKET REPORT / ANALYSIS
-Friday the S&P 500 dipped about 0.6% to 2723.
-VIX rose about 0.9% to 19.51.
-The yield on the 10-year Treasury rose to 3.217% as of
4:30 pm.
Nothing goes up for ever; today’s dip didn’t mean much.
My Money Trend indicator remains bullish. In addition, again,
we saw late-day buying and a very bullish closing-tick (sum of last trades of
the day) of +540.
My daily sum of 17 Indicators remained zero (a positive
number is bullish; negatives are bearish) while the 10-day smoothed version
that negates the daily fluctuations improved from -36 to -34.
Today is trading day 31 for this pullback. The drop is
now 7.1% (9.9% max). (These numbers are based on closing data.) Over the last
10-years, for drops less than 10%, the average time from top to bottom has been
32-days to a final bottom, including a retest. (The low is usually at the
retest.) Except for major crashes, the average correction was about 12% and
lasted 53 trading-days including retests.
It’s tug of war time between the positive calendar
(November is a bullish month) vs. the tendency for corrections to retest their
lows. We still can’t say which side will win or if the correction is over. My
guess is that it is slightly more likely for the correction to re-test, so we
may see the 2641 low again. Retests are usually successful and markets go
up. Of course, if this is the “big one”
the test will fail and we’ll see selling resume. It may make sense to reduce
stock holdings some as the markets recover. I plan to watch indicators and make
a decision later.
I remain bullish in the short-term.
MOMENTUM ANALYSIS:
(Momentum analysis is not useful in a selloff.)
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.
*I rank the Dow 30 similarly to the ETF ranking system.
For more details, see NTSM Page at…
FRIDAY MARKET INTERNALS (NYSE DATA)
Market Internals
remained Neutral.
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).
I am now 50% invested in stocks. For me, fully invested
is a balanced 50% stock portfolio. As a retiree, this is a position with which
I am comfortable unless I am in full defense mode or feeling especially
optimistic.
INTERMEDIATE / LONG-TERM INDICATOR - HOLD
Friday, the Price
indicator was positive; Volume and Sentiment were neutral; the VIX indicator
was negative. Overall this is a NEUTRAL indication.
