HOUSING STARTS (Bloomberg)
“U.S. new-home groundbreakings fell in February by the
most in eight months on a drop in single-family homes, suggesting buyers and
builders remain wary despite higher wages and a drop in mortgage rates. Residential
starts slumped 8.7 percent…Permits, a proxy for future construction, dropped
1.6 percent to a 1.3 million rate.”
Story at…
CONSUMER CONFIDENCE (Conference Board/PRnewswire)
“The Conference Board Consumer Confidence Index®declined
in March, after increasing in February. The Index now stands at 124.1 (1985=100),
down from 131.4 in February…Lynn Franco, Senior
Director of Economic Indicators at The Conference Board [said] "Confidence
has been somewhat volatile over the past few months, as consumers have had to
weather volatility in the financial markets, a partial government shutdown and
a very weak February jobs report. Despite these dynamics, consumers remain
confident that the economy will continue expanding in the near term. However,
the overall trend in confidence has been softening since last summer, pointing
to a moderation in economic growth." Press release at…
MORE COMPANIES ISSUING NEGATIVE GUIDANCE (FACTSET)
“Heading into the end of the first quarter, 105 S&P
500 companies have issued EPS guidance for the quarter. Of these 105 companies,
77 have issued negative EPS guidance and 28 companies have issued positive EPS
guidance. The number of companies issuing negative EPS for Q1 is above the
five-year average (74), while the number of companies issuing positive EPS
guidance for Q1 is below the five-year average (32).” Analysis/discussion at…
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 slipped about 0.1% to 2818.
-VIX dropped about 10% to 14.68.
-The yield on the 10-year Treasury rose to 2.421%.
The drop in VIX is an encouraging sign for the bulls. The
Options Boys expect this rally to continue, at least based on today’s number.
The S&P 500 is again trying to break above the last
resistance level in the 2820-2830 region, other than the prior all-time high of
2931. The Index has crept slightly higher than its November high of 2814.
There have been 5 statistically significant moves in the
last 3-weeks of trading sessions. That
level of back-and-forth, big-moves usually happen at a top or bottom. So, this
looks like a top. It is not a guarantee, though. To call a top with more confidence
we’d need more indicators giving us a top signal. Sentiment is a good top
signal. Currently, sentiment is high, but not giving a sell signal. Breadth can also be used to call a top, but Breadth
is in good shape, though it is well below its 9 Jan high.
On the bearish side New-high, new-low data is pointed
slightly down. Up-volume is slipping, but that wasn’t the case today – we saw
strong up-volume at 79% of the total volume. MACD is still headed down. My
Money Trend indicator is slipping down.
Other indicators are mostly neutral.
My daily sum of 20 Indicators improved from -8 to -4 (a
positive number is bullish; negatives are bearish) while the 10-day smoothed
version that negates the daily fluctuations dropped from +42 to +33. Most of
these indicators are short-term.
I am in the Bear camp. I think the markets will fall from
here, but the chart will tell us. A break through resistance will finally
get me back in the markets at a bigger level.
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.
*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 remained
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).
My current stock allocation is about 30% invested in
stocks as of 9 January 2019.
INTERMEDIATE / LONG-TERM INDICATOR
Tuesday, the PRICE
and VIX indicators were positive. The VOLUME and SENTIMENT indicators were
neutral. Overall this is a BULLISH indication.
