JOBLESS CLAIMS (Reuters)
“The number of Americans filing applications for
unemployment benefits was unchanged last week, suggesting the labor market
remains on solid footing despite slowing economic activity. Initial claims for
state unemployment benefits were unchanged at a seasonally adjusted 218,000…”
Story at…
PRODUCTIVITY (Detroit News)
“U.S. productivity grew at a strong 3.4% rate in the
January-March quarter, the best showing in more than four years, the Labor
Department reported Thursday.” Story at…
BEIGE BOOK (Bloomberg)
“The U.S. economy broadly expanded in recent weeks and
the business outlook remained “solidly positive,” according to a Federal
Reserve survey that also indicated some clouds on the horizon.” Story at…
THIS WEEK THE MARKET DECIDES (Marketwatch)
“…please do not remain terribly enamored with the
downside action. Remember that this downside action is going to set us up for
the final rally we expect to the 3,500-4,000 region in the coming years, which
will then complete this bull market off the 2009 lows.” – Avi Gilbert, founder of ElliottWaveTrader.net. Commentary at…
My cmt: Right now, it appears that the market decided up!
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 rose about 0.6% to 2843.
-VIX dropped about 1% to 15.93.
-The yield on the 10-year Treasury slipped to 2.120%.
The MACD analysis of S&P 500 price has made a bullish
crossover and is headed up. That is followed by a lot of traders so this is
bullish news. My MACD Breadth analysis is also getting stronger. Since I
consider this one of my best indicators, this is a nice bullish sign.
There really is only one troublesome issue now as far as
indicators that I follow. The FOSBACK Logic Index is still leaning bearish.
This indicator looks at new-high and new-low data under the premise that
new-highs and new-lows should not both be high at the same time. That is what we have right now. Today, there
were 194 new-highs and that’s a good number.
The trouble is that there were also 102 new-lows. I’ll keep an eye on
this indicator. This indicator called
the top of the 20% correction that ended Christmas Eve to the day.
My daily sum of 20 Indicators improved from +2 to +4 (a
positive number is bullish; negatives are bearish) while the 10-day smoothed
version that negates the daily fluctuations improved from -40 to -38. (These
numbers sometimes change after I post the blog based on data that comes in
late.) Most of these indicators are short-term.
I’m bullish now, given that indicators are bullish or
turning more bullish; price action looks strong; the Smart Money is buying; and
other signs point to confirming my belief that the pullback ended this past Monday.
TOP / BOTTOM INDICATOR SCALE OF 1 TO 10
Today’s Reading: 0
Most Recent Day with a value other than Zero: +1 on 31
May (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.
MOMENTUM ANALYSIS:
I believe the correction/pullback has ended so momentum
analysis should get more valuable.
TODAY’S RANKING OF
15 ETFs (Ranked Daily)
*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 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).
Using the Short-term indicator in 2018 in SPY 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 55% invested in
stocks as of 4 June 2019. This is based on the improved indicators 3 June and
my recommendation to increase stock holdings if we saw strong buying on 4 June.
As a retiree, I am conservatively positioned.
You may be comfortable with a higher % invested in stocks – that’s OK.
INTERMEDIATE / LONG-TERM INDICATOR
Thursday, the VIX, VOLUME, PRICE and SENTIMENT indicators
were neutral. Overall the Long-Term Indicator remained NEUTRAL.
