“Retail sales dropped 1.2% in December, the U.S. Census
Bureau said, the largest
drop since September 2009, compared with expectations of unchanged
sales. Even more surprising, sales at internet sellers tumbled 3.9%, marking
the worst performance since November 2008, in the midst of the financial
crisis.” Story at…
PPI (Reuters)
“U.S. producer prices fell for a second straight month in
January, leading to the smallest annual increase in 1-1/2 years, the latest
sign of benign inflation that could allow the Federal Reserve to be patient about
raising interest rates this year. The Labor Department said on Thursday its
producer price index for final demand dipped 0.1 percent last month as the cost
of energy products and food fell.” Story at…
JOBLESS CLAIMS (MarketWatch)
“The number of people who applied for jobless benefits
over the last month rose to a one-year high, a possible sign the U.S. labor
market might be losing some steam. The four-week average of new jobless claims
climbed by 6,750 last week to 231,750, marking the highest level since the
January 2018, the
government said Thursday. Weekly jobless claims, meanwhile, rose by
4,000 to a seasonally adjusted 239,000 in the seven days ended Feb. 9…” Story
at…
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 dipped about 0.3% to 2746.
-VIX rose about 4% to 16.22.
-The yield on the 10-year Treasury dropped to 2.657%.
(Investors bought bonds; sold stocks.)
The S&P 500 closed above its 200-dMA for the third
day in a row. That should make us get more bullish, but two of those days were
just a whisker above the 200-day. More concerning, we see indicators slipping down
and that suggests the rally is finally losing steam.
Again, the Pros were selling late as the Index dropped about
9 points in late day action. That is a bearish sign and interesting; the WSJ
had a big article today on the fact that late day action (when the Pros trade) has
been abnormally bullish. That’s not true for the last 2 days.
My daily sum of 17 Indicators slipped from +9 to +2 (a
positive number is bullish; negatives are bearish) while the 10-day smoothed
version that negates the daily fluctuations dipped from +91 to +81.
The key still looks like the 200-dMA. In the next day or
two we’ll know whether investors want to hold the 200-dMA. It’s a close call at
this point, but I am unconvinced.
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…
THURSDAY MARKET INTERNALS (NYSE DATA)
Market Internals slipped
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
Thursday, the VIX indicator
was positive. The Sentiment, VOLUME and Price indicators were neutral. Overall
this is a NEUTRAL indication. I remain defensive due to chart indications.
