“The NFIB Small Business Optimism Index fell slightly to
107.2, 0.6 point below May’s record reading. This was the sixth highest reading
in the index’s 45 year history and just below the record level (108.0) reached
in 1983.” Story at…
JOLTS (Bloomberg/Quint)
“U.S. job openings cooled in May from a record to a level
that’s still consistent with a tight job market that’s encouraging more
Americans to voluntarily leave their positions for better opportunities... The
elevated number of job postings is in sync with the continuing broad trend of
job-creation…” Story at…
RECESSION (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
April 2018, previously set in November 2014.”
Commentary and Charts at…
GUGGENHEIM CIO CALLS FOR CORRECTION (CNBC)
“Minerd says the market rally is the ‘last hurrah’ and ‘investors
should sell now….’
The market is
underestimating the risk of a trade war and will likely see a correction once
it is confronted with ‘cold water in the face,’ Guggenheim Partners’ Scott
Minerd warned on Monday.” Story at…
My cmt: There is a strong history of corrections greater
than 10% occurring in mid-term, off-Presidential election years. It is not
clear that the 10.1% correction earlier this year was enough to clear the air; history
may repeat later in the year. All we can do is watch indicators closely.
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 was up about 0.4% to 2794.
-VIX slipped about 0.4% to 12.64.
-The yield on the 10-year Treasury slipped to 2.854%.
No need to go thru the indicators in detail. They haven’t changed much – they remain
generally bullish.
-My daily sum of 17 Indicators improved from +2 to +5, and
the 10-day smoothed version that negates the daily fluctuations improved from -32
to -17. The Sum of Indicators is moving up. This is bullish for the market.
I am bullish short-term.
My longer-term indicator system remained neutral, but I
am bullish there too.
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…
I still have GE in my DOW 30 chart. I’ll have to update my calculations to delete
GE and add Walgreens Boots Alliance (WBA) since it has replaced GE in the DOW
30. WBA is best known for operating Walgreens drug stores.
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).
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. This is high for me given that we are
late in this cycle (and as a retiree), but it indicates my bullishness after
the correction. I’ll sell these new positions quickly if the market turns down.
INTERMEDIATE / LONG-TERM INDICATOR
Intermediate/Long-Term
Indicator: Tuesday, the VIX, Price, Sentiment & Volume indicators were
neutral. Overall this is a NEUTRAL indication.
