“As we have repeatedly written since last December,
tax cuts were destined to only wind up in one place – in the pockets of
shareholders and C-suite executives. But in an economy
which is nearly 70% driven by the consumption of the bottom 90%, a fiscal
policy which specifically targeted corporations (which are major political
donors) was not likely the best strategy to promote a
long-term increase in economic prosperity. Unsurprisingly, with the data now
in, we once again come to find out that “trickle down” economics never actually
trickles.” – Lance Roberts. Commentary and analysis at…
My cmt: Trump is well on the way to doubling the National
Debt, again.
MARKET REPORT / ANALYSIS
-Friday the S&P 500 slipped about 0.1% to 2802.
-VIX was down about 0.1% to 12.86.
-The yield on the 10-year Treasury rose to 2.898%.
Another long day so I’ll keep this short…
Indicators are mixed with today’s aggregate of the 17-indicators
close to a neutral number. On the bright
side, the Industrial Cyclical stocks (XLI-ETF) are now outperforming the
S&P 500 over recent periods. It has
been underperforming since mid-June so this outperformance is significant. It’s a bullish sign since when investors are
nervous they sell cyclicals.
My daily sum of 17 Indicators remained -4 while the
10-day smoothed version that negates the daily fluctuations dropped from +8 to zero.
I remain fully invested.
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. (On 5 Apr 2018 I
corrected a coding/graphing error that had consistently shown Nike
incorrectly.)
*I rank the Dow 30 similarly to the ETF ranking system. For
more details, see NTSM Page at…
GE has been removed from my DOW 30 chart and Walgreens
Boots Alliance (WBA) has been added to match the official DOW 30. WBA is best known for operating Walgreens
drug stores.
FRIDAY 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).
18 Apr 2018 I
increased stock investments from 35% to 50% based on the Intermediate/Long-Term
Indicator that turned positive on the 17th. (It has since turned Neutral.) For
me, fully invested is a balanced 50% stock portfolio. 50% is my minimum unless
I am in full defense mode.
On 10 May 2018 I
added stock positions to increase Stock investments to 58% based on more
evidence that the correction is over. This is high for me given that we are
late in this cycle (and as a retiree), but it indicates my bullishness after
the correction. I’ll sell these new positions quickly if the market turns down.
INTERMEDIATE / LONG-TERM INDICATOR
Intermediate/Long-Term
Indicator: Friday, the Volume, VIX, Price & Sentiment indicators were
neutral. Overall this is a NEUTRAL indication.
