JOBLESS CLAIMS (MarketWatch)
“The number of
Americans who applied for unemployment benefits in mid-January rose slightly,
but layoffs remain near a 50-year low and there’s no sign of deterioration in
the strongest U.S. labor market in decades. Initial jobless claims increased by
6,000 to 211,000 in the seven days ended Jan. 18…” Story at…
LEI (Conference Board)
“The Conference Board Leading Economic Index® (LEI) for
the U.S. declined 0.3 percent in December to 111.2 (2016 = 100), following a
0.1 percent increase in November, and a 0.2 percent decline in October. “The US
LEI declined slightly in December, driven by large negative contributions from
rising unemployment insurance claims and a drop in housing permits,” said
Ataman Ozyildirim, Senior Director of Economic Research at The Conference
Board. “The LEI has now declined in four out of the last five months. Its
six-month growth rate turned slightly more negative in the final quarter of
2019, with the manufacturing indicators pointing to continued weakness in the
sector. However, financial conditions and consumers’ outlook for the economy
remain positive, which should support growth of about 2 percent through early
2020.” Press release at…
CRUDE OIL INVENTORIES (OIlPrice.com)
“The American Petroleum Institute (API) estimated on
Wednesday a surprise crude oil inventory build of 1.57 million barrels for the
week ending January 17, compared to analyst expectations of a 1.009-million-barrel draw
in inventory.” Story at…
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 rose about 0.1% to 3326.
-VIX rose about 0.5% to 12.98.
-The yield on the 10-year Treasury slipped to 1.732.
The daily sum of 20 Indicators slipped from +2 to 0
(a positive number is bullish; negatives are bearish). The 10-day smoothed sum
that negates the daily fluctuations remained from +44. (These numbers
sometimes change after I post the blog based on data that comes in late.) Most
of these indicators are short-term.
Bollinger Bands and RSI are both extended, but remain in
Neutral territory.
I remain bullish in the
long-term; short-term, I‘ve been expecting a pullback. I’m not sure if the top
is in (we never are), but I suspect that if it isn’t. it’s not far off.
Any pullback should be small (about 5%): the number of
new, 52-week highs has been increasing when the S&P 500 has been making
each new high. Also, the Fosback New-High/New-Low Logic Index remains much
closer to a buy than a sell.
TOP / BOTTOM INDICATOR SCALE OF 1 TO 10 (Zero is a
neutral reading.)
Today’s Reading: -1
Most Recent Day with a value other than Zero: -1 on 23
January (The S&P 500 is too far above its 200-dMA when sentiment is
considered and Bollinger Bands are overbought.)
(1) +10 Max Bullish / -10 Max Bearish)
(2) -4 or below is a Sell sign. +4 or higher is a Buy
Sign.
MOMENTUM ANALYSIS:
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)
-Intel (INTC) still looks attractive, but I am waiting
for a dip in the markets. It has broken out above its April 2019 prior high. Intel was up 7% after-hours Thursday on a
good earnings report. I may regret waiting longer.
The top ranked stock receives 100%. The rest are then
ranked based on their momentum relative to the leading stock.
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 60% invested in
stocks as of 7 Oct 2019 (up from 50%). This is a conservative balanced position
appropriate for a retiree. You may wish to have a higher or lower % invested in
stocks depending on your risk tolerance.
INTERMEDIATE / LONG-TERM INDICATOR
Thursday, the PRICE indicator was Bullish; VIX,
VOLUME and SENTIMENT Indicators were neutral. Overall, the Long-Term Indicator
remained HOLD.
