“Our models “said” to raise some cash in January and
recommit that cash at the February 9 undercut low (the low below the “selling
climax” low of February 6). Since then, we have been calling for new all-time
highs. So it is said, so it is written, and so it is done. Again, as Leon
Tuey wrote last Tuesday:
On Monday, all Advance-Decline Lines closed at record
highs and the following also closed at record
highs: S&P Mid-Cap, S&P Small-Cap, Value Line Arithmetic Index,
Wilshire 5000 Composite Index, and SPDR S&P Retail ETF (XRT). Earlier this
year, many talking heads felt that the market had seen its high for the year
and some even declared that a bear market had commenced. Bear market? What bear
market? Given their lousy track record, one wonders how they even have a job.
Thankfully, they are not in the medical profession. As mentioned before, if
these talking heads expend some effort trying to understand the market's logic,
instead of flapping their gums incessantly, they would improve their
performance…” Commentary at…
My cmt: We suggested that the S&P would make new
highs last May and here we are.
MARKET REPORT / ANALYSIS
-Monday the S&P 500 rose about 0.8% to 2897.
-VIX rose about 1% to 12.16.
-The yield on the 10-year Treasury was unchanged at 2.813%
as of this post.
The S&P 500 broke the old high on Friday and today it
powered higher and is nearly 1% higher than the high of 26 January. Looking at
the charts, the Index is at the top of the short-term trendline (going back to
last April), but on a longer-term basis, the Index looks like it can go a lot
higher, at least if we only look at the basic chart. Looking at other signs we
see a strong up-trend with a few cautious signs beginning to show up.
Currently, my daily sum of 17 Indicators remained a
bullish +6 (a positive number is bullish) while the 10-day smoothed version
that negates the daily fluctuations improved from +6 to +19 indicating that
conditions are much better than 2-weeks ago.
Money Trend is bullish as are a number of other
indicators. Sentiment is falling. Up-volume is climbing. Smart Money has been
falling, but it bounced up today on a 20-day basis. New-High/New-low data looks
good. The size of up-moves has been much larger than down-moves, a bullish
sign. VIX continues to fall.
Bearish signs: Bollinger Bands and the Overbought/Oversold
Ratio are both oversold. 7 out of the last 10-days have been up and that’s a
cautionary number. So far, RSI remains neutral so I won’t worry about these
bear signs yet, though “bear signs” may be overstating the case. I don’t expect a bear market. If we get more
negative signs the most likely move would be a 3-5% pullback.
I remain fully invested.
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.
*I rank the Dow 30 similarly to the ETF ranking system.
For more details, see NTSM Page at…
MONDAY MARKET INTERNALS (NYSE DATA)
Market Internals remained
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).
I am now 50% invested in stocks. For me, fully invested
is a balanced 50% stock portfolio. As a retiree, this is a position with which
I am comfortable unless I am in full defense mode or feeling especially
optimistic.
INTERMEDIATE / LONG-TERM INDICATOR
Intermediate/Long-Term
Indicator: Monday, the Price and VIX indicators were positive; Volume &
Sentiment were neutral. Overall this is still a NEUTRAL indication.
