May 15, 2019

Only a late rally last Friday saved the benchmark indexes from their worst week of the year. As it was, each of the indexes mentioned here fell at least 2.12%, with the Global Dow and the Nasdaq falling more than 3.0%. During the week, the small-cap Russell 2000 temporarily sank into correction territory as it drifted more than 10% below its August 2018 high. Once again, it appears trade fears stoked investor concerns following President Trump's 25% tariff rate hike on some Chinese imports. Not surprisingly, bond yields fell as prices rose following increased investor demand. Also, notable last week was the initial public offering of Uber, which raised more than $8.1 billion, making it the largest IPO since Alibaba Group's 2014 public launching.

05-15-2019 SPY

Like we have been writing about and telling investors, a pullback is warranted and is taking place now. We see the markets gyrating around for the next few weeks, and again, any pullback should be viewed as a buying opportunity. We do not have sell signals on any of our mathematical systems. We do expect the market to stage a significant rally by year-end.

  • According to the latest Job Openings and Labor Turnover (JOLTS) report, the number of job openings increased by 346,000 in March.
  • Job openings increased in a number of industries, with the largest increases in transportation, warehousing, and utilities (87,000), construction (73,000), and real estate, rental and leasing (57,000).
  • Job openings decreased in federal government (15,000).
  • Over the 12 months ending in March, hires totaled 69.3 million, and separations totaled 66.6 million, yielding a net employment gain of 2.7 million.
  • According to the Department of Labor, there were 228,000 claims for unemployment insurance for the week ended May 4, a decrease of 2,000 from the previous week's level.
  • The advance rate for insured unemployment claims remained at 1.2% for the week ended April 27.
  • The advance number of those receiving unemployment insurance benefits during the week ended April 27 was 1,684,000, an increase of 13,000 from the prior week's level.

This week’s HCM Optimized Trend Indicator (OTI) stock of the week is Nordic American Tankers Limited (NAT). Yahoo Finance says “Nordic American Tankers Limited, a tanker company, acquires and charters double-hull tankers in Bermuda and internationally. It operates a fleet of 23 Suezmax crude oil tankers. The company was founded in 1995 and is based in Hamilton, Bermuda.” With a market cap of only ~350 million, this is one of the smaller stocks we have featured, but we wanted to point out that the OTI is watching no matter how big or small.

Furthermore, we think the OTI is doing a great job with this stock, as you can see from the chart below. The buy signal in late 2015, the sell signal in early 2016, and the sell signal in mid-2016 are all worth taking a look at to see what kind of help the OTI can be. After a good earnings call, NAT is up roughly 14% today. With the most recent signal being a buy near the end of April, we are very pleased with the OTI’s performance on this stock. Way to go OTI!

05-15-2019 NAT

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