“Consumer prices were unchanged in January, as lower gasoline
prices offset the rising costs of housing, clothing and medical care. The Labor
Department said the consumer price index rose only 1.6 percent last month from
a year earlier.” Story at…
CRUDE OIL INVENTORY (OilPrice.com)
“Crude oil prices inched down today after the Energy
Information Administration reported a
crude oil inventory build of 3.6 million barrels for the week to February 8. This
compares with a build of 1.3 million
barrels for the previous week.” Story at…
BIG FAT BUYERS STRIKE (ZEROHEDGE)
“One of the bizarre observations to emerge over the past
month has been that despite the torrid rebound in stocks so far in 2019,
culminating with the best January for the S&P since 1987, investors have
generally shunned US equities, selling stocks when they should be buying, and
allocating the proceeds into bonds and emerging markets… if investors are selling
stocks who is buying, with the most likely
culprits being the return of stock buybacks and a historic short squeeze.”
Commentary at…
CORRECTION UPDATE
This is day 99 of this correction (assuming we haven’t
made a bottom yet – I count top to bottom).
As of today’s close, the Index is down 6.1% (19.8% max) from its prior
all-time high and has included 21 new-lows. In recent years only the 2011
correction contained 21 new-lows. That correction bottomed at 19.4% on day 69
and successfully retested the low about 2% lower on day 108.
The S&P 500 Index is
now 0.3% above the 200-dMA.
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 was up about 0.3% to 2753.
-VIX rose about 1% to 15.65
-The yield on the 10-year Treasury rose to 2.708%.
The S&P 500 gave up more than half of its gain in the
last 20 minutes of trading. The is
somewhat of a bearish indication coming as the Index attempts to hold above its
200-dMA. Utilities also outperformed the market over the last 5 days and that’s
a concern for the bulls. Still, the chart is what matters. Will the
200-day hold?
Based on the daily data, the evidence is leaning to the
bullish side. Internals were bullish today: advancers outpaced decliners 2 to 1;
64% of the volume was advancing volume; and 65% of stocks advanced. I am, however, seeing signs of slowing momentum.
My daily sum of 17 Indicators remained +9 (a positive
number is bullish; negatives are bearish) while the 10-day smoothed version
that negates the daily fluctuations dipped from +94 to +91.
The key still looks like the 200-dMA. Can the S&P 500
power thru its 200-day as it has thru the other levels of resistance? I think
we’ll get above the 200-day, but perhaps fail to hold it. In the next day or two
we’ll know whether investors want to hold the 200-dMA.
Whether we’ll have a full retest remains to be seen. To
me it still seems more likely than not.
Only a retest at the 2351 level, or a climb back above
the old highs (not likely without a retest), will tell us whether 2351 was THE
bottom.
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…
WEDNESDAY 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).
My current stock allocation is about 30% invested in
stocks on as of 9 January 2019. For me, fully invested is a balanced 50% stock
portfolio so this is a very conservative position.
INTERMEDIATE / LONG-TERM INDICATOR
Wednesday, the VIX
and VOLUME indicators were positive. The Sentiment and Price indicators were
neutral. Overall this is a POSITIVE (Bullish) indication. I remain defensive
due to chart indications.
