JOBLESS CLAIMS (Reuters)
“The number of Americans filing applications for
unemployment benefits fell to a nearly half-century low last week, pointing to
sustained labor market strength despite slowing economic growth. But the loss
of momentum in activity has left some employers unsettled about the economy’s
outlook.” Story at…
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 was up about 0.2% to 2879.
-VIX slipped about 1% to 13.58.
-The yield on the 10-year Treasury dipped to 2.515%.
Volume was about 20% below the monthly average. Did buyers
go on strike? Up volume continues to fall; New-highs today were disappointing. The
good news was that on a percentage basis, internals were good and the S&P 500
was up.
“Trading what I see,” still has me doing nothing. That’s
because the long-term indicator remains neutral and the short-term indicator (market
internals) has been flopping between neutral and bullish. If markets were in a more
bullish situation, the long-term indicator would be positive/bullish. I’ve
doubted this rally the whole way; I have been wrong, but it is still very hard increase
my % invested in stocks without more bullish indicators at this point.
As noted before, there are hardly any bear signs today in
my indictors:
-The overbought/oversold ratio is oversold. This is an old school indicator that is
usually early so I don’t pay much attention to this one.
-Bollinger Bands are nearly
overbought, but not there yet.
My daily sum of 20 Indicators dropped from +10 to +6 (a
positive number is bullish; negatives are bearish) while the 10-day smoothed
version that negates the daily fluctuations slipped from +13 to +11. Most of
these indicators are short-term.
There aren’t many bear signs. I remain in the confused
camp. I’d like to see the Long-term indicator and the Short-term internals
indicator both positive so I can increase my percentage invested in stocks.
We have noted some slowing momentum. The way I draw the trend lines it looks like
the Index is at its upper trend line. Trend lines have flattened after the
steep run-up. Some lower prices would be expected near-term.
TOP / BOTTOM INDICATOR SCALE OF 1 TO 10
Today’s Reading: Zero (Solidly Neutral.)
Most Recent Day with a value other than Zero: 21 March
2019 value = -1
(1) +10 Max Bullish / -10 Max Bearish)
(2) -4 or below is a Sell sign. +4 or better is a Buy
Sign.
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 switched
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 as of 9 January 2019.
INTERMEDIATE / LONG-TERM INDICATOR
Thursday, the PRICE
indicator was positive. The VOLUME, VIX and SENTIMENT indicators were neutral.
Overall this remains in a NEUTRAL indication.
