JOBLESS CLAIMS (Reuters)
“The number of Americans filing applications for
unemployment benefits fell more than expected last week, pointing to still
strong labor market conditions, though the pace of job growth has slowed after
last year’s robust gains…Initial claims for state unemployment benefits dropped
9,000 to a seasonally adjusted 221,000 for the week ended March 16…” Story at…
PHILADELPHIA FED (Bloomberg)
“The six-month outlook for manufacturing in America’s
mid-Atlantic region slumped to a three-year low, another sign that expectations
for weaker global growth may be weighing on producers. The Federal Reserve Bank
of Philadelphia’s index for future activity fell 9.5 points to 21.8 in March…”
Story at…
LEI (PRNewswire)
“The Conference Board Leading Economic Index® (LEI) for
the U.S. increased 0.2 percent in February to 111.5 (2016 = 100), following
no change in January, and a 0.1 percent decline in December. ‘The US LEI
increased in February for the first time in five months," said Ataman
Ozyildirim, Director of Economic Research at The Conference Board.
"February's improvement was driven by accommodative financial conditions
and a rebound in stock prices, which more than offset weaknesses in the labor
market components. Despite the latest results, the US LEI's growth rate has
slowed over the past six months, suggesting that while the economy will
continue to expand in the near-term, its pace of growth could decelerate by
year end.’" Press release at…
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 rose about 1.1% to 2855.
-VIX dipped about 2% to 13.63.
-The yield on the 10-year Treasury rose to 2.534%.
Most signs are bullish. Let’s looks at the few bearish
ones:
- Today was a statistically significant up-day. That just
means that the price-volume move exceeded my statistical parameters. Statistics
show that a statistically significant up-day is followed by a down day about
60% of the time. That is the fifth statistically significant move in the last
16-trading sessions. That usually
happens at a top or a bottom. With the FED continuing to give the market what
it wants it doesn’t seem like a top. It
certainly isn’t a bottom. I guess today’s move was simply a bullish response to
the FED’s indication yesterday that there is a very low chance of a rate hike
this year. When we ask why? We see that
the economy is slowing. That’s good news? It seems so, for the time being.
- Bollinger Bands were overbought, not oversold, a
typo from yesterday. RSI is neutral. I like to use these indicators together so
this isn’t really a very strong negative for now.
-The overbought/oversold index is “overbought”. This one
is always early so it’s not an indicator that we pay too much attention to.
My daily sum of 20 Indicators improved from +7 to +8 (a
positive number is bullish; negatives are bearish) while the 10-day smoothed
version that negates the daily fluctuations improved from +30 to +43.
I see no reason to stay out of the market at this point. The
S&P 500 has broken above one of the last levels of resistance and remained
there for several closes. (The final level is the prior high.) Most indicators
are positive and the Markets seem to be drunk on FED cool-aid. I may as well
join the party. I’ll be increasing stock holdings to 50% - this is probably the
death nell for 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. I’ll be moving to a balanced 50% stock
portfolio Friday. Stay conservative; this market is fragile and could turn down
quickly if we have bad news that triggers a shift to risk aversion.
INTERMEDIATE / LONG-TERM INDICATOR
Thursday, the PRICE,
VOLUME and VIX indicators were positive. The SENTIMENT indicator was neutral.
Overall this is a BULLISH indication. I am as I write this but I will increase
stock holdings tomorrow.
