“New orders for U.S.-made goods recorded their biggest
decline in six months in January and business spending on equipment appeared to
be slowing after strong growth in 2017. Factory goods orders dropped 1.4
percent…” Story at…
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 was UP about 0.3% to 2728.
-VIX was DOWN about 2% to 18.36.
-The yield on the 10-year Treasury slipped to 2.849%.
I suggested yesterday that the S&P 500 may have made
a Higher Low on 1 March. That is a point on the chart that shows the lower
trend line is headed up and that’s a bullish signal that the correction is
over. Market internals have improved a lot between the low on 8 Feb and the higher-low
on 1 March. It is similar to the higher-low that signaled the end of the quick correction
in May-Jun of 2013. The question is whether there was enough selling to scare
out all the weak hands during the correction.
My guess is mixed: (1) The correction could be over. (2) There is more
trouble to come in the weeks or months ahead.
There is one particularly troubling sign: VIX has been falling
but, not fast enough to make me too optimistic.
My sum of 17 Indicators jumped from -7 to 0. The smoothed
version is down, but I’ll take today; a +7 change is fairly big. Let’s hope it
bodes well for the future.
Late-day action was flat but, Closing Tick (sum of last
trades of the day) was a very bullish +293. Breadth moved to 54% and that means
over the last 10-days, more than half the stocks on the NYSE have moved up.
The Index remains 0.4% below its 50-dMA (2738). It still
needs to break above it before we feel more positive.
Once again, the supposed experts are saying that volume
is low and that means a lack of conviction. The folks who say this are just
lazy. If they bothered to examine the data they would realize that volume is
always low as the market climbs after a correction bottom. The reason is
simple: investors don’t believe that the correction has ended so they are slow
to buy, even as the market goes up.
I am still not sure where this market is going in the
short-run. But I’ll be a seller of the S&P 500 drops much below 2700.
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
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).
LONG TERM INDICATOR
Tuesday, the VIX
indicator was negative; Volume, Sentiment and Price 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.
