PERSONAL INCOME/SPENDING (Reuters)
“U.S. consumer spending barely rose in January and income
increased modestly in February, suggesting the economy was fast losing momentum
after growth slowed in the fourth quarter…Consumer spending, which accounts for
more than two-thirds of U.S. economic activity, edged up 0.1 percent…” Story at…
PCE PRICE INDEX (Breitbart)
“The Fed’s preferred inflation gauge, the price index for
personal-consumption expenditures, fell 0.1 percent in January from December.
Economists had expected prices to remain flat.” Story at…
CHICAGO PMI (MarketWatch)
“Chicago PMI drops sharply in March as order backlogs
fall to contractionary levels. Chicago PMI in March slowed to a reading of 58.7
from 64.7, MNI Indicators said. Any reading above 50 indicates improving
conditions.” Story at…
NEW HOME SALES (Bloomberg)
“Sales of new U.S. homes rebounded to the best pace in
almost a year and exceeded estimates in February, led by the Midwest, as lower
mortgage costs helped buyers afford properties.” Story at…
SENTIMENT (Bloomberg)
“U.S. consumer sentiment climbed in March by more than
initially reported as views grew rosier about current economic conditions. The
University of Michigan's final sentiment index climbed to 98.4 from the prior
month’s 93.8, according to a report Friday.” Story at…
MARKET REPORT / ANALYSIS
-Friday the S&P 500 rose about 0.7% to 2834.
-VIX dropped about 5% to 14.43.
-The yield on the 10-year Treasury rose to 2.407%.
Today’s stock market moves may have been largely due to
end of quarter/month fund, window-dressing and individual 401k inflows (typical
at end and beginning of a month). We may know a little more by mid-week.
Economic news continues to be week. Apparently, the numbers aren’t enough to
spook Wall Street – they are sure the Fed has their back. Even with the Fed
put, one wonders whether the S&P 500 at near all-time highs is justified.
(The Index is 3.3% below all-time highs.)
Not much change from yesterday: Over the last 10-days 53%
of the total volume on the NYSE has been up-volume and 54% of stocks have
advanced (a measure of breadth). Those are decent numbers, but there is a
concern for the bulls; the graph of both are falling. That’s a bearish sign
until we see a reversal. Money Trend, New-high/new-low spreads and MACD are
bearish.
My daily sum of 20 Indicators slipped from -2 to -4 (a
positive number is bullish; negatives are bearish) while the 10-day smoothed version
that negates the daily fluctuations dropped from +18 to +10. Most of these
indicators are short-term.
Bear signs still remain, but none are extreme so we have
to say indicators remain bearish, but not with a lot of conviction. I remain in
the Bear camp, at least in the short-term.
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…
FRIDAY MARKET INTERNALS (NYSE DATA)
Market Internals
remained 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 as of 9 January 2019.
INTERMEDIATE / LONG-TERM INDICATOR
Friday, the PRICE indicator
was positive. The VOLUME, VIX and SENTIMENT indicators were neutral. Overall this
remains in a NEUTRAL indication.
