“The number of jobless workers who applied for
unemployment benefits last week rose to a one-month high, but the level of
layoffs in the U.S. remained extremely low. Initial jobless claims rose by
6,000 to 229,000 in the seven days ended March 9…” Story at…
NEW HOME SALES (Reuters)
“Sales of new U.S. single-family homes fell more than
expected in January, suggesting the housing market weakness persisted early in
the first quarter, despite a moderation in mortgage rates. The Commerce
Department said on Thursday new home sales declined 6.9 percent…They fell 4.1
percent from a year ago.” Story at…
COMMERCIAL LOANS SUGGEST THE END IS NEAR (Real Investment
Advice)
“According to the chart below, recessions occurred
shortly after C&I [Commercial and Industrial] loans peaked within the
“Danger Zone.” C&I loans are currently in that zone, which I see as further
confirmation that we are in a Fed-driven economic bubble that will end badly.”
Jesse Columbo, RIA.
Chart and commentary from…
My cmt: One wonders whether there is really cause and
effect here. Any ratio that puts GDP in the denominator will peak when GDP
weakens. Is it really true that since 1970 the economy has been fueled by debt?
Could be, I’m not sure.
OFF TOPIC: SENATE VOTES TO TERMINATE TRUMP NATIONAL
EMERGENCY (NBC News)
“The Senate voted 59-41 on Thursday to cancel President
Donald Trump's national security declaration to fund a wall on the border,
picking up the support of 12 Republicans to put the measure over the top.”
Story at…
My cmt: I’m in favor of additional walls/barriers/fences,
but It’s an embarrassment that ALL Senators didn’t vote against the Trump emergency.
The emergency declaration is clearly un-constitutional. Funding is the purview
of the Congress. Can a President declare that
taking care of old people is an emergency and take funding from other
appropriations and use it for Social Security and Medicare? Can a President
take funds from other appropriations and use them for improving the military? Could
a President fund the war on drugs because it’s an emergency and Congress didn’t
appropriate enough money? No. Funds for
these activities are appropriated by Congress as is wall-construction. It’s
true by the law; it’s true by past practice and its true per the Constitution.
It takes two acts of Congress to spend money: (1) an authorization bill (2) an
appropriations bill, both signed into law by the President. The sad thing is,
all Politicians swore an oath to uphold the Constitution. They are all weasels,
but I hate to slander weasels.
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 dipped about 0.1% to 2808.
-VIX rose about 1% to 13.50.
-The yield on the 10-year Treasury rose to 2.629%
Like earlier this week, today we saw high
unchanged-volume. Some analysts believe this indicates a top since it suggests
investor confusion. That sounds logical,
but I never found a very strong correlation. Sometimes it’s right and sometimes
it’s wrong.
My daily sum of 20 Indicators slipped from +9 to +3 (a
positive number is bullish; negatives are bearish) while the 10-day smoothed
version that negates the daily fluctuations improved from +9 to +10. This remains
a bullish indication.
The Index is fighting resistance around the 2810-2820
level. We’ll see if it can push higher.
I have waited so long to get back in, there’s no need to rush now.
My experience with this rally has been just another
lesson of: “Follow your indicators!” It just seemed impossible that there would
not be a retest of the December low; it could still happen, but I am getting
tired of betting that it will. I am not short the market, but I have lost
opportunity cost associated with being mostly out. Of course, this is exactly the reason I leave
30% in the market. I have been wrong about a retest, but I have still made
money on the rally.
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 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
Thursday, the PRICE
and VIX indicators were positive. The VOLUME and SENTIMENT indicators were
neutral. Overall this is a BULLISH indication. I remain defensive for the time
being depending on market action.
