“U.S. consumer price growth slowed in February amid a
decline in gasoline prices and a moderation in the cost of rental
accommodation, the latest indication that an anticipated pickup in inflation
probably will be only gradual…The year-on-year increase in the so-called core
CPI was unchanged at 1.8 percent in February.” Story at…
SMALL BUSINESS OPTIMISM SURVEY (Advisor Perspectives)
“The latest issue of the NFIB Small Business Economic Trends came out this
morning. The headline number for February came in at 107.6, up 0.7 from the
previous month and its second highest of all time.” Commentary at…
CENTRAL BANKS $20-TRILLION STOCKPILE (Real Investment
Advice)
“Central banks now own almost half of global GDP? Is this
a market economy, or something else: Economies&markets guided by
non-elected, supposedly independent wizards?” – Harald Malmgren
“The importance of the point should not be overlooked as
it has been the key source of liquidity pushing markets higher since 2009.” –
Lance Roberts. Excerpt from Chart of the Year Commentary at…
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 was Down about 0.6% to 2765.
-VIX was UP about 4% to 16.35.
-The yield on the 10-year Treasury slipped to 2.846%.
Here we go again.
The S&P 500 has crossed the 50-dMA 6-times so far in this
“correction” and it is now headed down again and the Index is only 0.7% above
the 50-day. Hmmm. We don’t want to see it fall below about 2740 since that is
now the lower trend line in our upward moving trend.
My sum of 17 Indicators moved up from 0 to +3, but the
smoothed version slipped down. I’ll take
the positive side. The Market Internals indicator turned positive.
10-day Breadth moved up to 55%; that means over the last
10-days, 55% of the stocks on the NYSE have moved up and that’s still a
positive sign.
This small dip has given some clearance to postpone an overbought
Bollinger Band signal. Overall, I lean toward the bullish side in the near term. There are not many strong signals now so to
some extent we have a waiting game underway to see where this market will go.
A few negative signs remain:
-New-Highs are still falling when measured on a long-term
basis. Usually, this indicator bottoms when the S&P 500 makes a bottom so
it’s a worry that is still there.
My guess is that the correction is over, but I expect some
troubles ahead. I am not convinced the correction has worked off the
complacency that we observed in 2017.
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
switched 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).
LONG TERM INDICATOR
Tuesday, the VIX
indicator was negative; Price was positive; Sentiment and Volume were neutral.
MY INVESTED STOCK POSITION:
TSP (RETIREMENT ACCOUNT – GOV EMPLOYEES) ALLOCATION
27 February, I
increased stock holdings from 40% to 50% with the remainder in a mix of stocks
and (mostly short-term) bonds. (A comparable TSP allocation would be 50% in the
S&P 500 Index fund (C-Fund) with the remainder 50% G-Fund (Government
securities). This is a conservative retiree position.
