"U.S. central bankers discussed raising interest rates
soon to counter excessive economic strength but also examined how global trade
disputes could batter businesses and households, minutes of the Federal
Reserve’s last policy meeting showed on Wednesday. A Key Point: MANY
PARTICIPANTS SAID IT WOULD LIKELY “SOON” BE APPROPRIATE TO RAISE INTEREST RATES
[their caps].” Story at…
PERSONAL INCOME / SPENDING (Nasdaq.com)
“Personal income and spending in the U.S. both increased
by more than anticipated in the month of October, according to a report
released by the Commerce Department on Thursday.” Story at…
PCE PRICES (MarketWatch)
“Inflationary pressures, meanwhile, did not move the
needle. The 12-month rate of inflation was flat at 2%, as measured by Federal
Reserve’s preferred PCE gauge.” Story at…
JOBLESS CLAIMS (Bloomberg)
“Filings for U.S. unemployment benefits rose for a third
week to the highest level since May, potentially reflecting volatility around
two consecutive periods that included holidays. Jobless claims increased by
10,000 to 234,000 in the week ended Nov. 24, Labor Department figures showed
Thursday.” Story at at…
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 slipped about 0.2% to 2738.
-VIX rose about 2% to 18.79.
-The yield on the 10-year Treasury dipped to 3.029% as of
4:32pm.
My daily sum of 17 Indicators improved from +1 to +3 (a positive
number is bullish; negatives are bearish) while the 10-day smoothed version
that negates the daily fluctuations rose from -61 to -53.
I noticed that yesterday’s up-volume was very high and
thus close enough to trigger a bullish high up-volume signal. This cancels the bearish, low up-volume
signal that we saw on 10 October as the correction got under way. This is another
decent confirmation of the “correction over” call I made previously. It is still possible that we could see a
retest of the 2633 low, but it is not likely that the S&P 500 would drop
significantly farther than the prior low. It could fall farther – it’s just not
very likely.
There are, of course, news events that could upset the
apple cart – all we have to do is to hear Trump’s tariff tweets repeated on the
national news – so let’s hope all is quiet on the tariff front.
As of Tuesday, I went from 30% invested in stocks to
fully invested in stocks plus about 10% extra since I think we made a bottom
last Friday.
In summary: “Looking good Billy Ray! Feeling good Lewis!”
MOMENTUM ANALYSIS:
(Momentum analysis is not useful in a selloff, but
since we are coming off the bottom (I think) we may begin to use this data
again.)
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…
THURSDAY MARKET INTERNALS (NYSE DATA)
Market Internals
remained Neutral on the market, but they were almost positive.
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 increasing stock allocations to 60% invested in
stocks Tuesday. For me, fully invested is a balanced 50% stock portfolio so this
is slightly higher. I will cut back to 50% if/when we reach the old highs
depending on indicators.
INTERMEDIATE / LONG-TERM INDICATOR
Thursday, the Price
indicator was positive; Volume and Sentiment indicators were neutral; the VIX
indicator was negative. Overall this is a NEUTRAL indication, but improvements
to the numbers do support the belief that the bottom was Friday.
