Durable-goods orders fell 1.7% April, but the dropoff
stemmed almost entirely from a decline in contracts for Boeing BA, +0.30% planes. Most
businesses took in more orders and increased investment last month.” Story at…
MICHIGAN SENTIMENT (Bloomberg)
“Consumer sentiment in the U.S. settled back to a
four-month low in May amid less-favorable buying conditions for homes and
big-ticket items, according to a University of Michigan report Friday.” Story
at…
MARKET REPORT / ANALYSIS
-Friday the S&P 500 was down about 0.2% to 2721.
-VIX rose about 6% to 13.22.
-The yield on the 10-year Treasury slipped to 2.928%.
My daily sum of 17 Indicators remained -1, while the
10-day smoothed version slipped from +36 to +29. This is a mildly bearish
indication. My longer-term indicator system remains bullish. It is possible that
the S&P 500 Index will retest of the 200-dMA. That’s a critical point for market health. Before
we get there, the Index would have to break its lower trend line and that is
now coinciding with the 100-dMA at 2711.
That’s the 2700 range area I’ve mentioned previously a couple of times. I
would get concerned if we break 2700 for more than a day since it could herald
more selling and a trend change. My
opinion is that we’re in an uptrend and will remain so. I think the S&P 500
will bounce up from the 2700 area should it get that low – we’ll see.
I’m cautiously optimistic in the near term. We need to
see the market hold the 100-dMA (2711); then I’ll feel more confident.
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. (On 5 Apr 2018 I
corrected a coding/graphing error that has consistently shown Nike
incorrectly.)
*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
remained 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).
18 Apr 2018 I
increased stock investments from 35% to 50% based on the Intermediate/Long-Term
Indicator that turned positive on the 17th. (It has since turned Neutral.) For
me, fully invested is a balanced 50% stock portfolio. 50% is my minimum unless
I am in full defense mode.
On 10 May 2018 I
added stock positions to increase Stock investments to 58% based on more
evidence that the correction is over. I’ll sell these new positions quickly if
the market turns down.
INTERMEDIATE / LONG-TERM INDICATOR
Intermediate/Long-Term
Indicator: Friday, the Price and VIX Indicators were positive; Volume and
Sentiment indicators were neutral. Overall this is a BULLISH indication, but I
don’t completely trust VIX at this point.
