EXISTING HOME SALES (Reuters)
“U.S. home sales fell more than expected in March,
pointing to continued weakness in the housing market despite declining mortgage
rates and slowing house price gains…Existing home sales, which make up about 90
percent of U.S. home sales, declined 5.4 percent from a year ago.” Story at…
Home sales are watched by economists since they can
signal a recession. This isn’t a new issue though, existing home sales have
declined for 13 straight years.
THIS IS WHAT TRADERS EXPECTED
“Where Christmas eve (Boxing Day was THE very
low).....?
Yet one can SEE what most "Technicians" were almost certainly waiting for....I myself included.” - Nowwhat2.
Yet one can SEE what most "Technicians" were almost certainly waiting for....I myself included.” - Nowwhat2.
Chart and commentary from a trader board; I added the red
notation. Red is what I expected.
MARKET REPORT / ANALYSIS
-Monday the S&P 500 rose about 0.1% to 2908.
-VIX ROSE about 3% to 12.42.
-The yield on the 10-year Treasury rose to 2.577%.
Today is the sixth day in a row that the market has
traded between 2900 and 2908. 6 days ago,
there were 153 new highs with 59% of stocks advancing on a 10-day basis; and
57% of volume was up-volume on a 10-day basis. Today, those stats have fallen
to 54 new-highs; 49% of stocks have advanced on a 10-day basis; and 48% of volume
was up-volume over the last 10-days. Clearly
market internals have deteriorated while the price (S&P 500 index) has
remained about the same. Usually, the Index will follow the internal stats, especially
the % of stocks advancing. That stat indicates that less than half of all stocks
on the NYSE have advanced over the last 10-days.
Over the last month of trading there have been 15 days
that were up. That’s stretched. The market is also too calm and a move down is
likely within the next several weeks. Looking at all of the data, we’re overdue
for a retreat at least to the 50-dMA and possibly lower.
My daily sum of 20 Indicators remained -4 (a positive
number is bullish; negatives are bearish) while the 10-day smoothed version
that negates the daily fluctuations dropped from +6 to -9. Most of these
indicators are short-term.
I am bullish now, longer term, but I am still looking for
a better entry point in the near term. I expect the market direction to be down
(overall) for a bit. Mr. Market has not agreed with me, although the S&P
500 has been nearly flat for more than a week. We’ll see.
TOP / BOTTOM INDICATOR SCALE OF 1 TO 10
Today’s Reading: 0
Most Recent Day with a value other than Zero: -1 on 17
April (RSI was negative.)
(1) +10 Max Bullish / -10 Max Bearish)
(2) -4 or below is a Sell sign. +4 or better is a Buy
Sign.
NOTE: Topping
indicators are good at identifying a blow-off top with buyers in a frenzy. These indicators are not so good at identifying
a slow, rollover-top that can happen when buyers simply go on strike.
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…
MONDAY MARKET INTERNALS (NYSE DATA)
Market Internals declined
to NEGATIVE 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. I sold the rally about half way up expecting a retest
of the lows Dec 2018.
INTERMEDIATE / LONG-TERM INDICATOR
Monday, the VIX, VOLUME, PRICE and SENTIMENT indicators
were neutral. Overall this is a NEUTRAL indication.
