“U.S. homebuilding tumbled to a more than two-year low in
December as construction of both single and multi-family housing declined, the
latest indication that the economy had lost momentum in the fourth quarter.”
Story at…
CONSUMER CONFIDENCE (Bloomberg)
“U.S. consumer confidence improved in February, topping
all forecasts and snapping a three-month losing streak, after the U.S.
government ended the longest shutdown in the country’s history and the trade
war edged toward a resolution. The confidence index climbed to 131.4 from 121.7…”
Story at…
FED CHAIR TESTIMONY (CBSNews)
“Federal Reserve Chairman Jerome Powell said Tuesday the
U.S. economy should keep expanding at a solid, though somewhat slower pace this
year. But he warned of growing risks, including a global slowdown, volatile
financial markets and uncertainty about U.S. trade policy.” Story at…
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 dipped about 0.1% to 2794.
-VIX rose about 2% to 15.17.
-The yield on the 10-year Treasury slipped to 2.635%.
My daily sum of 20 Indicators slipped from +11 to +7 (a
positive number is bullish; negatives are bearish) while the 10-day smoothed
version that negates the daily fluctuations dropped from +87 to +85. This is a bullish/neutral
indication.
The Index is now 1.6% above the 200-dMA.
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…
TUESDAY MARKET INTERNALS (NYSE DATA)
Market Internals dropped
to NEUTRAL on the market.
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
Tuesday, the VIX,
VOLUME and PRICE indicators were positive. The SENTIMENT indicator was neutral.
Overall this is a POSITIVE/BULLISH indication. I remain defensive, expecting
some sort of pullback.
