“U.S. industrial production increased solidly in April
amid an acceleration in manufacturing and mining output, the latest indication
that the economy was gathering momentum early in the second quarter…U.S.
industrial production increased solidly in April amid an acceleration in
manufacturing and mining output, the latest indication that the economy was
gathering momentum early in the second quarter.” Story at…
CRUDE INVENTORIES (OilPrice.com)
"A day after the American Petroleum Institute’s crude oil
inventory report put
a restraint on oil prices, the Energy Information Administration pushed prices
up again by reporting a draw of 1.4 million barrels for the week to May 11.”
Story at…
BIG FOUR INDICATORS (Advisor Perspectives)
“There is…a general belief that there are four big
indicators that the committee [NBER Business Cycle Dating Committee] weighs
heavily in their [recession] cycle identification process. They are: Nonfarm
Employment; Industrial Production; Real Retail Sales; Real Personal Income
(excluding Transfer Receipts)…Here is a percent-off-high chart based on an
average of the Big Four. The average of the four set a new all-time high in
November 2014 and has been inching closer recently.” – Jill Mislinsky.
Charts, analysis and commentary at…
BULL MARKET OR BEAR TRAP (Real Investment Advice)
“Yes, with the breakout of the consolidation process last
week, we did indeed add exposure to our portfolios as our investment discipline
dictates. But such does not mean that we have dismissed our assessment of the
risks that currently prevail.
There is a rising possibility the current rally is
a “bull trap” rather than the start of a “new leg” in this
aging bull market. This is why we still maintain slightly higher levels of cash
holdings in our accounts, remain focused on quality and liquidity, and keep
very tight risk controls in place.” – Lance Roberts. Commentary at…
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 was up about 0.4% to 2722.
-VIX fell about 8% to 13.42.
-The yield on the 10-year Treasury rose to 3.097%.
My daily sum of 17 Indicators rose from +4 to +7, while
the 10-day smoothed version improved from +18 to +33. Indicators still look bullish.
My Money Trend indicator is bullish; up-volume is
improving; new-highs are climbing; late day action (Smart Money) is bullish;
VIX is sharply falling; XLI is outperforming the S&P 500; Sentiment is high,
but not enough to worry the bulls; That’s a good collection of Bullish
indicators.
On the Bearish side, the advance-decline ratio is overbought,
but it is usually early so I’ll ignore it for now.
Bollinger Bands and RSI are extended but are both are currently
neutral.
I remain bullish in the near term. Longer term, who knows? The bull will probably go for
another year or so, but it could end tomorrow. We need to be vigilant.
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…
WEDNESDAY 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).
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 55% 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: Wednesday, the Volume and VIX Indicators were positive; Price
and Sentiment indicators were neutral. Overall this is a POSITIVE indication. I
am somewhat leery of the VIX indicator, but I tend to trust it for a falling
VIX.
