JOBLESS CLAIMS (CNBC)
“The number of Americans filing applications for
unemployment benefits increased by the most in 19 months last week. The
underlying trend continued to point to labor market strength, however.
Initial claims for state unemployment benefits jumped to
230,000 for the week ended April 20…” Story at…
DURABLE GOODS ORDERS (MarketWatch)
“Orders for long-lasting durable goods posted the biggest
increase in March since last summer, potentially signaling a rebound in the
slower-growing industrial side of the economy. Durable-goods orders leaped 2.7%
last month, led by stronger demand for autos, planes and networking equipment…”
Story at…
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 dipped about 1 pt. to 2926.
-VIX rose about 1% to 13.25.
-The yield on the 10-year Treasury rose to 2.535%.
My daily sum of 20 Indicators dropped from +7 to +2 (a
positive number is bullish; negatives are bearish) while the 10-day smoothed
version that negates the daily fluctuations dipped from -8 to -9. Most of these
indicators are short-term.
On the charts, the Index failed to retake the prior
all-time high of 2931. That may not be outright bearish, but it does show some
lost momentum in the short-run. I suggested that if the indicators started
moving up strongly, I might get back in rather than wait for a better buying
opportunity. So far, we see no evidence that there will be a strong move up in
the indicators, but it could happen. Here’s a run-down of some that stand out:
BEAR SIGNS
-New-high/new-low data is headed lower and the number of
new-highs has stalled on a longer-term basis.
-Money Trend is falling, but not by much. This one could
go either way.
-Statistically, the S&P 500 is too calm (measured by
daily moves) suggesting some down moves ahead. This indicator is a worry, but
it could be weeks before it gets resolved.
-MACD is at the cross and another down day would probably
send a bearish signal. Will it make a
bearish crossover or remain bullish? Only time will tell.
-Smart Money (late-day action) turned sharply down
Wednesday and continued down today.
-Cyclical Industrial stocks (XLI-ETF) are underperforming
the S&P 500.
-There have been 15 up-days out of the last 20-trading
days. This is stretched, but not extreme.
The extreme value was 2 days ago at the new all-time high when there had
been 16 up-days in the prior 20 days.
NEUTRAL
-RSI was overbought a week ago, but it has been neutral
ever since.
-Bollinger Bands are elevated, but neutral.
-The S&P 500 is in line with its internals and not
stretched either up or down.
-Sentiment is elevated, but not in the red zone. However,
Sentiment could go bearish soon, unless we see some sort of dip. If Sentiment gives
a bear signal, we will need to pay close attention. It has been very accurate
recently.
-VIX is relatively flat.
-The Fosback High-Low Logic Index is neutral.
BULL SIGNS
-Up moves have been bigger than down moves over the last
month.
I am bullish now, longer term, but I am still looking for
a better entry point in the near term. I expect the market direction to be down
(overall) for a bit. So far, Mr. Market has not agreed with me.
TOP / BOTTOM INDICATOR SCALE OF 1 TO 10
Today’s Reading: 0
Most Recent Day with a value other than Zero: -1 on 17
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…
THURSDAY MARKET INTERNALS (NYSE DATA)
Market Internals declined
to 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. I sold the rally about half way up expecting a
retest of the lows Dec 2018.
INTERMEDIATE / LONG-TERM INDICATOR
Thursday, PRICE was positive; the VIX, VOLUME, and SENTIMENT
indicators were neutral. Overall this is a NEUTRAL indication.
