JOBLESS CLAIMS (Reuters)
“The number of Americans filing applications for
unemployment benefits fell more than expected last week, pointing to sustained
labor market strength that should underpin the economy as growth slows. Initial
claims for state unemployment benefits dropped 16,000 to a seasonally adjusted
212,000 for the week ended May 11…” Story at…
PHILADLPHIA FED INDEX
The Philadelphia Fed manufacturing index in May rose to a
four-month high of 16.6 after registering 8.5 in April.” Story at…
DON’T BET ON NEW RECORDS (MarketWatch)
“What we need obviously is new highs,” Acampora, director
of technical research for Altaira Capital Partners, told MarketWatch in a phone
interview. “Do I see new highs anytime soon? No.”…Acampora said that stock
indexes also need to show their ability to defend those Dec. 24 lows, which he
would view as a healthy development, going forward, though he isn’t predicting
that stocks will head back to those lows.” Story at…
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 rose about 0.9% to 2876.
-VIX dropped about 7% to 15.29.
-The yield on the 10-year Treasury rose to 2.393%.
The S&P 500 broke above its 50-dMA (2864) today. That’s
somewhat bullish.
My daily sum of 20 Indicators improved from -5 to +4 (a
positive number is bullish; negatives are bearish) while the 10-day smoothed
version that negates the daily fluctuations dropped from -45 to -37. (These
numbers sometimes change after I post the blog based on data that comes in
late.) Most of these indicators are short-term. This looks a lot more positive than
we’ve seen recently.
Breadth looks very positive today as does new-high/new-low
data. Money Trend has slowed its fall, but it is still negative.
The 5-10-20 Timer system remains a sell signal today This
simply means that the 5-dEMA and the 10-dEMA have dropped below the 20-dEMA.
This is a decent indicator all by itself, but it is somewhat prone to whipsaw
action.
I said yesterday, at this point one wonders whether we
will continue to see falling stock prices or have we been tricked into
panicking over the Tariffs that seem to be much ado about nothing. Right now,
it looks like a huge fake out.
I still have a very low % invested in stocks and I’m
looking for a buying point. I am not ready yet, but it might be soon.
TOP / BOTTOM INDICATOR SCALE OF 1 TO 10
Today’s Reading: 0
Most Recent Day with a value other than Zero: +2 on 13
May (RSI & Bollinger Bands were bullish.)
(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…
THURSDAY MARKET INTERNALS (NYSE DATA)
Market Internals improved
to POSITIVE on the market at the close.
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).
I ran the numbers for 2018. Using the Short-term
indicator would have made a 5% gain instead of a 6% loss for buy-and-hold. The
methodology was Buy on a POSITIVE indication and Sell on a NEGATIVE indication
and stay out until the next POSITIVE indication. The back-test included 13-buys
and 13-sells, or a trade every 2-weeks on average.
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
Thursday, the Panic Indicator was negative. VOLUME, VIX, PRICE
and SENTIMENT indicators were neutral. (Sentiment was very nearly a sell as of
Friday.) Overall this is a NEUTRAL indication.
