“U.S. retail sales increased moderately in
April as rising gasoline prices weighed on discretionary spending, but consumer
spending appeared on track to accelerate after slowing sharply in the first
quarter.” Story at…
EMPIRE MANUFACTURING (24/7WallSt)
“According to the May 2018 Empire State Manufacturing
Survey, business activity grew strongly in New York. The headline general
business conditions index rose four points to 20.1, beating out the Bloomberg consensus
of 15.5 and indicating a faster pace of growth than in April.” Story at…
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 was down about 0.7% to 2711.
-VIX rose about 14.63% to 14.63.
-The yield on the 10-year Treasury rose to 3.078%.
I noted yesterday that the S&P 500 was up 7 days out
of the last 10 days and 4 days in a row and that was the kind of price action
we expect to see after investors decide a correction has ended. That’s true,
but it is also the kind of up move that calls for a bit of a pause – one or two
days would be the norm and we’re getting that now. I still expect that, overall,
we go up. Markets rarely go up in a straight line.
My daily sum of 17 Indicators slipped from +6 to +4,
while the 10-day smoothed version improved from +5 to +18. Indicators still look bullish.
I remain bullish in the near term. If I am wrong, my plan ahead remains: If the
S&P 500 drops to its prior low of 2581 and there is an unsuccessful retest,
I will probably cut stock holdings. If we see a successful test I’ll be adding
to stocks. At this point though, I think the correction is over. We’ll see…
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 had consistently shown Nike
incorrectly.)
*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 slipped
to 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 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: Tuesday, the VIX Indicator was positive; Volume, Price and
Sentiment indicators were neutral. Overall this is a NEUTRAL indication.
