FACTORY ORDERS (Reuters)
“New orders for U.S.-made goods fell modestly in February
and shipments rose after four straight monthly declines, but the manufacturing
sector is slowing amid rising inventories.
Factory goods orders dropped 0.5 percent…” Story at…
UPTREND WILL CONTINUE ACCORDING TO VIX FUTURES( McClellan
Financial Publications)
“…speculators who employ VIX futures are not yet
adjusting their positions for the evident new uptrend. That’s really fun,
because in the past when the total open interest numbers stay low into a new
uptrend, it means that the uptrend has a lot longer yet to run. The risk
of a meaningful top only comes after the open interest numbers start to rise,
and they climb up well above the 200MA. It is nowhere near that situation
right now. That means the uptrend which started off of the Dec. 24, 2018
low should have a lot longer to run.” – Tom McClellan. Commentary at…
HOW IS THIS POSSIBLE? (Marketwatch)
“…U.S. stock mutual funds and exchange-traded funds…have
seen sizable outflows since the start of the year, according to data from
Lipper and EPFR global…The trends of equity-fund outflows and paltry volumes
leaves the stock market at an inflection point as it heads into first-quarter
earnings season. While economic data, including Friday’s
better-than-expected jobs report, still point to a growing economy,
unburdened by the sort of excessive investment that typically signals a
recession, that doesn’t mean that stock markets will rise in tandem with
economic growth. Indeed, stock-market peaks have preceded
the start of an economic recession in three of the previous
seven instances." Story at...
JOBS FRIDAY (Heritage Capital)
“Not much has changed on the stocks front. A good
employment report should send them higher [Friday’s employment report was good],
but they still look a little tired in the short-term. Bonds should weaken on a
good report but they look like they could bounce after that. Gold probably
looks the most interesting here as it is set up for an upside move.” - PAUL SCHATZ,
PRESIDENT, HERITAGE CAPITAL
OFF TOPIC - MIGRANT CARAVAN
What a disgrace. The Congress refuses to do anything yet
blames Trump for this mess. I am not a
Trump fan, but this is the fault of Congress. Our laws encourage it; we process
the “asylum seekers” and then release them…AND…There is an industry of
“sponsors” who bring them here. Competition from the illegals lowers the cost
of labor here in the US. Thus, illegal immigration hurts poor people in
addition to overloading the welfare system. Blaming Trump is not solving the
problem. Congress fix this mess! Oh, by
the way…vote out ALL incumbents.
MARKET REPORT / ANALYSIS
-Monday the S&P 500 was up about 0.1% to 2896.
-VIX rose about 3% to 13.18.
-The yield on the 10-year Treasury rose to 2.528%.
I mentioned Friday that the big issue was that 8 of the
days in the last 10 have been up-days and 14 of the last 20-days have been
up-days. Today, those numbers got a little worse. As of today, 9 out of the
last 10-days registered positive returns; the 20-day number remained at 14
up-days. We are due for a pause of some
kind. I don’t want to over sell it,
because none of our top indicators are currently giving a “sell” sign. We are
more likely to see a drop in the 3-5% range, but it is always possible that we
could see a series of very small down moves to clear this indicator.
Volume continues to be low. Monday, it was again about 15% below the
monthly average. We still have to wonder if buyers went on strike, but it may
just represent caution by investors. We are
nearing the old S&P 500 all-time high and Earnings Season is about to get
underway.
My daily sum of 20 Indicators slipped from +11 to +10 (a
positive number is bullish; negatives are bearish) while the 10-day smoothed
version that negates the daily fluctuations climbed from +20 to +38. Most of
these indicators are short-term.
The size of the up-days compared to down days has been
falling – that’s mildly bearish.
I suspect this week I’ll ether be back fully invested or
watching a small retreat which would give me a better buying opportunity.
TOP / BOTTOM INDICATOR SCALE OF 1 TO 10
Today’s Reading: Zero (Solidly Neutral.)
Most Recent Day with a value other than Zero: 21 March
2019 value = -1
(1) +10 Max Bullish / -10 Max Bearish)
(2) -4 or below is a Sell sign. +4 or better is a Buy
Sign.
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…
MONDAY MARKET INTERNALS (NYSE DATA)
Market Internals remained
BULLISH 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
Monday, the VOLUME indicator
was positive. The VIX, PRICE and SENTIMENT indicators were neutral. Overall
this is a NEUTRAL indication.
