JOLTS (CNBC)
“The level of job openings in the U.S. edged lower in
September but was still well ahead of the total number of people looking for
work, the Labor Department said Tuesday. Vacancies edged lower to just over 7
million, according to the Job Openings and Labor Turnover Survey.” Story at…
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 rose about 0.6% to 2755.
-VIX slipped about 0.3% to 19.91.
-The yield on the 10-year Treasury rose to 3.228% as of
4:53 pm.
Volume remained down a bit today with total volume about
15% below the monthly average. I wrote yesterday that it might indicate that
the bounce is running out of steam. What was I thinking! After a bottom,
volume is always low because most people don’t believe the bottom is in. We could still see a retest of the lows, but
lower volume now is meaningless and it certainly doesn’t mean a “lack of
conviction.”
We need to follow the indicators and watch the resistance
areas to see if the S&P 500 will continue its rise. The S&P 500 is 0.3%
below its 200-dMA, now 2764, and that is a resistance point. Another point of resistance is the lower,
long-term, trend-line that goes back to February of 2016. That is about 2800. The Index dropped below
that lower trendline so it is now resistance on the way up. We should pay
attention to see if those points of resistance can be overcome. I remain
optimistic.
My Money Trend indicator remains bullish. Sentiment is
still falling and that is bullish.
Today we saw strong late-day buying, and that’s a bullish
sign, too. Oddly, Briefing.com reported a negative closing-tick (sum of last
trades of the day) of -203. I am not sure I believe it; I could find no dip
whatsoever near the close. Briefing.com has
had a number of issues with their closing Tick so perhaps this is more of the
same. Even if -203 is a good number, the
move in the afternoon was big enough so I’d have to say the Pros think this
rally is going higher.
My daily sum of 17 Indicators improved from +2 to +3 (a
positive number is bullish; negatives are bearish) while the 10-day smoothed
version that negates the daily fluctuations improved from -28 to -17.
Today is trading day 33 for this pullback counting from
the top. The drop from the top is now 6% (9.9% max). (These numbers are based
on closing data.) Over the last 10-years, for drops less than 10%, the average
time from top to bottom has been 32-days to a final bottom, including a retest.
(The low is usually at the retest.) Except for major crashes, the average
correction was about 12% and lasted 53 trading-days including retests. We can’t
say for certain that this correction is over until the market makes new highs.
It is more likely that the correction will re-test the
prior low of 2641 than just continue its move higher. It may make sense to reduce
stock holdings some as the markets recover since markets could fail a retest and drop further. I plan to watch indicators and make
a decision later.
For now, I think the market can go higher.
That’s mostly a guess. I remain cautiously bullish in the short-term.
MOMENTUM ANALYSIS:
(Momentum analysis is not useful in a selloff.)
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…
TUESDAY 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 - HOLD
Tuesday, the Price indicator
was positive; Volume and Sentiment were neutral; the VIX indicator was
negative. Overall this is a NEUTRAL indication.
