FED BEIGE BOOK (Reuters)
“The U.S. economy picked up speed going into the spring
on the back of growing confidence among consumers, the Federal Reserve said on
Wednesday, and Fed Chair Jerome Powell said it is on track for stronger growth
and hiring in the coming months... Powell and other Fed officials, however, say
the brighter economic forecasts and brief period of higher inflation will not
affect monetary policy, and the central bank will keep its support in place
until the crisis is over.” Story at...
EIA CRUDE INVENTORIES (EIA)
“U.S. commercial crude oil inventories (excluding those
in the Strategic Petroleum Reserve) decreased by 5.9 million barrels from the
previous week. At 492.4 million barrels, U.S. crude oil inventories are about
1% above the five-year average for this time of year.” Press release at...
https://ir.eia.gov/wpsr/wpsrsummary.pdf
CORONAVIRUS (NTSM)
Here’s the latest from the COVID19 Johns Hopkins website as
of 5:00pm Wednesday. US total case numbers are on the left axis; daily numbers
are on the right side of the graph with the 10-dMA of daily numbers in Green.
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 dropped
about 0.4% to 4125.
-VIX rose about 3% to 17.07.
-The yield on the 10-year
Treasury rose to 1.632%.
Again, today, we saw very
high, unchanged-volume on the NYSE. In theory this
in an indication that investors are confused and it can signal a reversal, in
this case down. I’ve tried to develop an indicator based on this without much
success. Sometimes it’s true; sometimes
not. It was about this high at the top on 12 Feb that preceded a small pullback
of 4%, but it has been higher since then with no dip.
Top indicators are the same as yesterday and remain
stretched. They are close to issuing a top-warning. Top Indicators that are
currently warning: (1) The Index is too far above its 200-dMA; (2) RSI is
overbought; (3) the Index is too far ahead of breadth; (4) and the Index is too
far ahead of Money Trend.
The market remains relatively broad; 7.2% of all
issues traded on the NYSE made new, 52-week highs when the S&P 500 made a
new all-time high on 13 Apr. This value is above average, and suggests that a
correction, if we have one, would be less than a 10% drop.
The daily sum of 20 Indicators
declined from +4 to +2 (a positive number is bullish; negatives are bearish);
the 10-day smoothed sum that smooths the daily fluctuations remained +66 (These
numbers sometimes change after I post the blog based on data that comes in late.)
Most of these indicators are short-term and many are trend following.
The Long Term NTSM indicator
ensemble remained BUY. Price, VIX & Volume are bullish; Sentiment is
neutral.
I remain cautiously Bullish, but I did reduce my %-invested
in stocks to 50% on Monday and I took profits in Intel (INTC) today. That cut
my %-invested to about 45%. (INTC has been weak recently even though its
momentum is still comparably good.) I think we are getting close to a pullback
of some kind.
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.
*For additional background on
the ETF ranking system see NTSM Page at…
http://navigatethestockmarket.blogspot.com/p/exchange-traded-funds-etf-ranking.html
TODAY’S RANKING OF THE DOW 30
STOCKS (Ranked Daily)
Here’s the revised DOW 30 and
its momentum analysis. 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…
https://navigatethestockmarket.blogspot.com/p/a-system-for-trading-dow-30-stocks-my_8.html
WEDNESDAY 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.
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.
As of 12 April, my
stock-allocation is about 45% invested in stocks. You may wish to have a higher
or lower % invested in stocks depending on your risk tolerance. 50% is a conservative
position that I consider fully invested for most retirees.
As a retiree, 50% in the stock
market is about fully invested for me – it is a cautious and conservative
number. If I feel very confident, I might go to 60%; if a correction is deep
enough, and I can call a bottom, 80% would not be out of the question.
The markets have not
retested the lows on recent corrections and that left me under-invested on the
bounces. I will need to put less reliance on retests in the future.
