CONSUMER SENTIMENT (Bloomberg)
“U.S. consumer sentiment fell in April for the first time
in three months, missing estimates, as the long-term economic outlook dropped
to the lowest in more than a year and enthusiasm over tax cuts waned.
The University of Michigan’s preliminary sentiment index
decreased to 96.9…” Story at…
7.5% INCREASE FOR THE S&P 500 (FactSet)
“Industry analysts in aggregate predict the S&P 500
will see a 7.5% increase in price over the next twelve months. This percentage
is based on the difference between the bottom-up target price and the closing
price for the index as of yesterday (April 4). The bottom-up target price is
calculated by aggregating the median target price estimates (based on
company-level estimates submitted by industry analysts) for all the companies
in the index. On April 4, the bottom-up target price for the S&P 500 was
3096.66, which was 7.5% above the closing price of 2879.39.” – John Butters. Commentary
at…
MARKET REPORT / ANALYSIS
-Friday the S&P 500 was up about 0.7% to 2888.
-VIX dropped about 8% to 12.01.
-The yield on the 10-year Treasury rose to 2.568%.
Volume finally picked up and was about 10% above the
monthly average. Considering it was 15% below the average for more than a week
that’s a big swing. That’s more like what we might expect if we were near a top
– I don’t think we are, but low volume is unusual after a big rally like we’ve
seen. Rallies usually die on high-volume, not low-volume (unless buyers give
up).
We still have the problem of too many positive days. As of today, 9 of the last 10 days have been
up-days. Over the last month 14-days have been up-days; the monthly number is
not bad, so this isn't a disaster for the bulls. Overall, this indicator is mildly bearish and
we might expect a few down-days in response.
RSI flipped to negative today. Bollinger Bands are very close to being over bought,
which would be negative, too. If Bollinger
Bands go negative along with RSI, we will see a better buying opportunity.
My daily sum of 20 Indicators declined from zero to -2 (a
positive number is bullish; negatives are bearish) while the 10-day smoothed
version that negates the daily fluctuations climbed from +45 to +47. Most of
these indicators are short-term.
I’ll just watch a bit longer and see what the markets are
doing. I still am looking for a couple of down days. Earnings season may send
tell me what to do investment wise. I am
bullish now, but still looking for a better entry point.
TOP / BOTTOM INDICATOR SCALE OF 1 TO 10
Today’s Reading: -1 (Cautionary: RSI is negative. Bollinger Bands
are close to overbought.)
Most Recent Day with a value other than Zero: Today
(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…
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 VIX indicator was positive; VOLUME, PRICE and
SENTIMENT indicators were neutral. Overall this is a NEUTRAL indication.
