NEW HOME SALES
Sales of new U.S. homes unexpectedly rose in March to a
16-month high, with a third straight increase that reflects a boost from lower
borrowing costs. Single-family home sales rose 4.5 percent…” Story at…
LARRY ADAM COMMENTARY EXCERPT (Raymond James)
“While intermediate-term trends remain supportive, we
believe the market is extended in the short term and would not be surprised to
see some consolidation. Key levels of technical support include 2,812 (50 Day
Moving Average) (DMA) and 2,766 (200 DMA). If the market incurs a short-term
pullback, use it opportunistically to accumulate favored sectors and stocks.” -
Larry Adam, CIO, Raymond James Private Client Group. Full commentary
at…
AVI GILBERT COMMENTARY EXCERPT (MarketWatch)
“As the U.S. stock market struck our next resistance region at
2,915 points on the S&P 500 Index and has now fallen, the question this
week is if this will turn into a c-wave according to Elliott Wave theory,
or…can [it] still maintain support and break out [higher] through that
resistance…In simple terms, as long as the S&P 500 is unable to
break below support between 2,865 and 2,885, and now breaks out over 2,915, it
opens the door for a rally to 3,011-3,045...” Avi Gilbert, Elliott Wave
technical analyst and founder of ElliottWaveTrader.net. Story at…
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 rose about 0.9% to 2934 (a new
all-time high).
-VIX slipped about 1% to 12.28.
-The yield on the 10-year Treasury rose to 2.572%.
Breakout! So, the markets jumped over all of the bad data
we’ve seen in the last 6-days of trading and bounced up to all-time highs. It did so on a big-move that was
statistically-significant in my system. That just means that the price-volume
move exceeded my statistical parameters. The data shows that a statistically-significant
up-day is followed by a down-day about 60% of the time. Tops are almost always
on statistically- significant days, but not all statistically significant days
are tops.
I this a top? One indicator says so. As of today, there have been only 4 down-days
in the last month of trading. That’s an
extreme rarity that is sometimes seen at tops. We don’t see any other top-indicators
calling a top now so this may well be a false alarm, or perhaps only a “mild”
top. We are overdue for a drop to the
50-dMA (about 4% below today’s close). That’s my guess and I’m sticking to it.
My daily sum of 20 Indicators improved from -4 to +1 (a
positive number is bullish; negatives are bearish) while the 10-day smoothed
version that negates the daily fluctuations dropped from -9 to -18. 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 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…
TUESDAY MARKET INTERNALS (NYSE DATA)
Market Internals improved
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. I sold the rally about half way up expecting a
retest of the lows Dec 2018.
INTERMEDIATE / LONG-TERM INDICATOR
Tuesday, PRICE was negative; the VIX, VOLUME, and
SENTIMENT indicators were neutral. Overall this is a NEGATIVE indication. Since
Price is the only negative indicator now (based on the # of days advance over
the last month), it may just be an outlier.
