CHICAGO PMI (MarketWatch)
“Chicago PMI fell sharply in April, falling to 52.6 from
58.7 in March. That's the lowest level since January 2017.” Story at…
CONSUMER CONFIDENCE (Conference Board via prnewswire)
“Consumer Confidence Index® improved in April, after
decreasing in March. The Index now stands at 129.2 (1985=100), up from 124.2 in
March…”Overall, consumers expect the economy to continue growing at a solid
pace into the summer months. These strong confidence levels should continue to
support consumer spending in the near-term." Press release at…
TECHNICALLY SPEAKING (Real Investment Advice)
“At
almost 7% above the long-term weekly moving average, the market is currently
pushing the upper end of historical deviations. The important point to take
away from this data is that “mean reverting” events are commonplace within the context
of annual market movements…From a portfolio management standpoint, the reality
is that markets are very extended currently and a decline over the next couple
of months is highly likely. While, it is quite likely the
year will end on a positive, particularly after last year’s loss, taking some
profits now, rebalancing risks, and using the coming correction to add exposure
as needed will yield a better result than chasing markets now.” Commentary at…
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 rose about 0.1% to 2946, a new
all-time high.
-VIX rose about 0.1% to 13.12. (Again, the Options Boys
did not confirm the rally.)
-The yield on the 10-year Treasury slipped to 2.5%. (The
Bond Ghouls aren’t confirming the rally today either.)
Any comments I made previously about low-volume are no
longer valid. Volume has picked up and today it was about 20% above the average
for the month. It doesn’t look like the rally will die of boredom.
My daily sum of 20 Indicators improved from zero to +7 (a
positive number is bullish; negatives are bearish) while the 10-day smoothed
version that negates the daily fluctuations improved from -4 to +64. Most of
these indicators are short-term. In total, this was a bullish move. Here were
troubling signs…
RSI is overbought at 84 (14-day, SMA) Bollinger bands are
not overbought and it would take about a ½% gain tomorrow to pop the Bollinger
Bands into a sell. I work these two indicators together so RSI, by itself, is
not much of a negative indicator.
When I look at indicators individually, they don’t look
all that bullish and there are some signs of declines ahead that I’ve
previously noted. Lance Roberts listed additional negatives in his “Technically
Speaking” commentary above. My version of the reversion-to-the-mean indicator
shows the Index is about 1.5% below a sell-signal. That’s based Index with at a
value nearly 6.5% above the 200-dMA when combined with Sentiment.
Someday, I may finally buy, perhaps, maybe, possibly...I’m
still having a hard time buying at this point. Jeepers.
TOP / BOTTOM INDICATOR SCALE OF 1 TO 10
Today’s Reading: -1
Most Recent Day with a value other than Zero: -1 on 30
April (RSI was negative.)
(1) +10 Max Bullish / -10 Max Bearish)
(2) -4 or below is a Sell sign. +4 or better is a Buy
Sign.
NOTE: Topping
indicators are good at identifying a blow-off top with buyers in a frenzy. These indicators are not so good at
identifying a slow, rollover-top that can happen when buyers simply go on
strike.
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)
*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 improved
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).
My current stock allocation is about 30% invested in stocks
as of 9 January 2019. I sold the rally about half way up expecting a retest of
the lows Dec 2018.
INTERMEDIATE / LONG-TERM INDICATOR
Tuesday, PRICE was positive; the VIX, VOLUME, and
SENTIMENT indicators were neutral. Overall this is a NEUTRAL indication.
