FACTORY ORDERS (Reuters)
“New orders for U.S.-made goods barely rose in December
and business spending on equipment was much weaker than previously thought,
pointing to a softening in manufacturing activity.” Story at…
CRUDE OIL INVENTORIES (OilPrice.com)
“Crude oil prices inched higher today after the EIA released its
latest Weekly Petroleum Status Report, in which the authority said crude oil
inventories had fallen by 8.6 million barrels in the week to February 22,
though they are still above the seasonal five-year average.” Story at…
INVENTORIES (SeekingAlpha)
“The key short-term economic issue facing the US economy
at the end of 2018 was the sky-high inventories from Q3 and whether Christmas
would empty those out. Wholesale sales and inventories for December were
dreadful, with sales down and inventories up...I fear this means the Q4 GDP
report later this week [Thursday] will be very disappointing.” Commentary at…
SELL TODAY? (Real Investment Advice)
“…it is very likely that if you sold everything today, and
went to cash, that you would miss little over the balance of the year. In other
words, the bulk of the gains have likely already been made for the year. “What?
I might miss out on a move higher?” Yes, but at what risk? Investing is always
about measuring risk versus reward. Currently, the risk to investors is a
correction over the next couple of months followed by a rally into year end
which culminates in a total return which is LESS than where you are today...
With the current advance already approaching historically high deviations from
the long-term mean, again, the risk of a correction greatly outweighs the
possibility of a continued advance.” - Lance Roberts
Commentary and chart from RIA at…
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 dipped about 0.1% to 2792.
-VIX slipped about 3% to 14.7.
-The yield on the 10-year Treasury rose to 2.683%.
S&P 500, 2800 has turned out to be a hard number to
crack. The Index has been sitting between 2792 and 2796 over the last four days.
The Index has lost price momentum while breadth, new-hi/new-low data and
up-volume have been slipping. Late day action has been bearish, too. Still, there is nothing that screams sell now;
the signals look fairly benign, at least based on today's numbers.
My daily sum of 20 Indicators slipped from +7 to +2 (a
positive number is bullish; negatives are bearish) while the 10-day smoothed
version that negates the daily fluctuations dropped from +85 to +77. This is a neutral
indication. The fall in indicators is concerning for the bulls, but the numbers are
still positive.
The Index is 1.6% above the 200-dMA.
Repeating…
I’m reluctant to jump back in when markets are getting
over-bought based on Price and Breadth. I hope to identify a better entry
point.
A full retest of the Christmas Eve low seems unlikely
now, but it could still happen. (A
pullback of some kind is overdue, but most indicators aren’t currently
predicting a drop.) Only a retest at the 2351 level, or a climb back above the
old highs, will tell us whether 2351 was THE bottom. Last week’s financial data
(LEI, Philly FED, Durable Orders and Jobless Claims) were weak and one wonders
whether the markets can retake old highs any time soon – it looks doubtful to
me.
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
to NEUTRAL 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
PRICE indicators were positive. The VOLUME and SENTIMENT indicators were
neutral. Overall this is a POSITIVE/BULLISH indication. I remain defensive,
expecting some sort of pullback.
