HOW THE RUSSIANS ARE ATTACKING US (USA Today)
“Young Mie Kim, a University of Wisconsin-Madison
researcher who published some of the first scientific analysis of social media
influence campaigns during the election, said the ads show that the Russians
are attempting to destabilize Western Democracy by targeting extreme identity
groups.” Story at…
My cmt: During the Ferguson crisis it was claimed by many
that a black man had his hands up when he was shot by a police officer and he
had done nothing to justify a shooting. The Officer claimed he was attacked and
there was a struggle for the gun and that was corroborated by some witnesses
according to reliable news sources.
I heard a young man call in to a local talk show. He was
irate and claimed that the fact there were no fingerprints found on the
officer’s gun proved there had not been a struggle. I wondered where he got his
news. Both the WSJ and the Washington Post had reported that the Police didn’t
look for fingerprints; they tested for DNA on the officer’s gun and found the
assailants DNA. (Police test for DNA or fingerprints – in this case it was not feasible to
look for both.) Everything the caller claimed was wrong. I wondered where he
got his news…now we know – the Russians.
CONSUMER CONFIDENCE (MarketWatch)
“The consumer confidence index rose to 128 from a revised
125.6 in April… The high level of confidence reflects a sturdy economic
expansion in the U.S. that’s about to turn nine years old with no end in sight.
Job openings are at a record high and unemployment is at a 17-year low.” Story
at…
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 was down about 1.2% to 2690.
-VIX rose about 29% to 17.02.
-The yield on the 10-year Treasury slipped to 2.778%
Tuesday was a statistically-significant down-day. That
just means that the price-volume move down exceeded statistical parameters that
I track. The stats show that about 60% of the time a statistically significant
move down will be followed by an up-day the next day. These days can sometimes
indicate the start of some serious selling. Alternatively, it is common after a
number of down days (only 3-days have been up in the last 10) to see a big down
day as the “weak hands” fold and sell their positions. That creates a big down
day and the smart money buys. My guess is that we start up from here, either
Wednesday or in the next day or two. But there’s another side…
…News can always make my analysis worthless – if the Eurozone
is under real pressure (not just the babble of news-media) the markets will
continue down. Political problems in Italy were blamed for today’s
selloff.
My daily sum of 17 Indicators slipped from -1 to -2,
while the 10-day smoothed version slipped from +29 to +21. Conditions are
weaker than 10-days ago but not falling rapidly right now so no need to get too
worried – a little worry is OK.
I’ve been talking about 2700 as an important point. The
drop below it is somewhat of a concern, but only if it drops much further. The
Index remains above its 50-dMA (2673) and that may be more important now.
My longer-term indicator system remains bullish.
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…
TUESDAY 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: Tuesday, the Price and VIX Indicators were positive; Volume and
Sentiment indicators were neutral. Overall this is a BULLISH indication.
