PAYROLL REPORT (Bloomberg)
“U.S. hiring rebounded more than forecast in March and
the prior month was stronger than first reported, potentially relieving some
concerns about a cooling economy…Payrolls rose 196,000…“This a perfect report
for the Fed because it actually corroborates what they’ve been saying all
along, which is there are no wage pressures,” Subadra Rajappa, head of U.S.
rates strategy at Societe Generale SA…” Story at…
RECESSION THIS YEAR? (Financial Sense)
“David Rosenberg, chief economist and strategist at
Gluskin Sheff, says the odds of a U.S. recession in 2019 are rising and are
probably much higher than the consensus expects…
How firmly do you believe we’ll hit recession in 2019?
“I'm not saying it's 100%. I’ll call it 85%. Those odds
are pretty high. This is a high conviction call and…I think we're going into
the early stages and it's not going to be anything like 2008 or 2009—don’t get
me wrong—but I think after this monumental debt cycle that we've had,
especially in the corporate sector, we're going into the other side of that,
and that the theme of this year, probably into next year is going to be one of
debt deleveraging, and that will come at the expense of aggregate demand. And
that's how you get the recession…” Story at…
My cmt: This isn’t the consensus, nor does the stock
market seem to agree.
MARKET REPORT / ANALYSIS
-Friday the S&P 500 was up about 0.5% to 2893.
-VIX slipped about 6% to 12.82.
-The yield on the 10-year Treasury dipped to 2.494%.
Volume was still low Friday, about 15% below the monthly
average. We still have to wonder if buyers went on strike, but the good news
remains: While overall volumes are down, percentages have been good.
My daily sum of 20 Indicators improved from +6 to +11 (a
positive number is bullish; negatives are bearish) while the 10-day smoothed
version that negates the daily fluctuations slipped from +11 to +20. Most of
these indicators are short-term. This is a nice bullish bump.
After holding out, due to my belief that we’d see a
retest of the December lows, I decided to increase stock holdings if long and
short-term indicators were positive. We are there now. The big concern is that
Bollinger Bands are almost overbought which could signal the start of a retreat.
Since it is possible for Bollinger Bands to give an
overbought reading for several months, I evaluate Bollinger Bands along with
RSI. If Bollinger Bands and RSI are both overbought, it means the odds of a
retreat are high. RSI is 63 now so there is room for the S&P 500 to move
higher; however, there are some strong short-term bearish signs:
The size of the up-days compared to down days has been
falling – that’s mildly bearish. The big issue, and it’s very bearish in the
very short term, is that 8 of the days in the last 10 have been up-days and 14
of the last 20-days have been up-days. We’re due for a retreat of some kind. I
think I will wait a bit longer for those issues to clear.
Maybe by the end of next week I’ll ether be back fully
invested or watching a 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…
FRIDAY MARKET INTERNALS (NYSE DATA)
Market Internals
switched to 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
Friday, the PRICE
and VOLUME indicators were positive. The VIX and SENTIMENT indicators were
neutral. Overall this is a BLLISH indication.
