Monday, October 16, 2017

Empire Manufacturing … The Next Bear Market ... Sentiment … Stock Market Analysis … ETF Trading

EMPIRE MANUFACTURING (Marketwatch)
“The New York Fed reported that its Empire State manufacturing index climbed to a three-year high of 30.2 in October from 24.4 in September, topping the Econoday-compiled consensus of 20.” Story at…
 
THE NEXT BEAR MARKET (MarketWatch)
“Recently, some professional traders have warned that the market is extremely overbought, that stocks are obscenely overvalued, and that a number of respected indicators are flashing warning signs…Complacency is the perfect description of this mindless market and how many investors feel about stocks.” Commentary at…
 
MY SENTIMENT CALCULATION
I measure Sentiment as %-Bulls (Bulls/{bulls+bears}) based on the amounts invested in Rydex/Guggenheim mutual funds. Sentiment reached 81%-Bulls Friday.  On a standard deviation basis, that value is getting close to extremes seen during the dot.com crash, now 85%. This isn’t by itself a great indicator since sentiment can remain elevated for some time, but it’s another reminder that caution is warranted.  If it reaches 85%, a pullback of some kind is likely; other indicators might hint how much.  For now, there’s not much need to worry. We’re not there yet and other indicators are not all that bearish.
 
MARKET REPORT / ANALYSIS         
-Monday the S&P 500 was up about 0.2% to 2558.
-VIX rose about 3% to 9.91.
-The yield on the 10-year Treasury rose to 2.303%.
 
Pop-top? Or Boring melt-down? Neither?
I’ve been suggesting that a 1% bump up in the S&P 500 would be a good signal for a short-term top.  We haven’t seen it yet and one wonders, will we see a pop-top or boring melt-down? (or neither) We don’t know, but it does seem like the markets are beginning to hint they may drift down. Here’s the evidence:
-Advancing volume continues to fall.
-Money Trend is rolling over to the downside.
-Market Internals are deteriorating.
-Smart Money is rolling over and trending down even though today’s late-day action was bullish.
-Breadth (the 10-dMA of the % of stocks advancing) is trending down.
-New-high new-low data is deteriorating and is neutral at best.
-The short-term chart looks like the S&P 500 is close to its upper trend line which suggests that there may be little room for advancement in the short-term.
-RSI is bearish; Bollinger Bands are still neutral although the Bollinger Bands gave a negative signal a week and a half ago.
 
There’s at least one bullish indication:
-Today’s closing tick (sum of final trades of the day) was +430 and that may suggest another bullish day Tuesday.
-My sum of 17-Indicators remains bullish, but it appears that it may be rolling over to the downside.
 
Short-term we appear to be due for about a 3-5% dip, but all of the indicators are not strongly calling for it now. I remain bullish longer-term. One wonders when this party will end so I will worry if the numbers deteriorate, but for now I remain fully invested.
 
If the report looks similar to recent ones, it’s because there has been little change in indicators recently.
 
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%.
*For additional background on the ETF ranking system see NTSM Page at…
 
Aerospace and Defense (ITA) remained #1 today. I am in ITA as of 21 Sept.
My trade in ITA is up 3% in the 3-weeks I’ve owned it. (Had a typo here. That’s embarrassing.)
 
SHORT-TERM TRADING PORTFOLIO - 2017 (Small-% of the total portfolio)
LONG
Repeating again:
It is tempting to make a VXX trade if and when we get a big move up signaling a short-term top.  VIX is at extreme lows. VXX would be a bet against the market and higher VIX – essentially a short.  This is a risky trade since as VIX options expire, they must be replaced with more expensive options (referred to as contango).  For this reason, VXX will lose value even if VIX stays the same. I need a really good set-up before I’ll short. I am not there yet.
 
My shorting rule is as follows:
-“In a bull market, you can only be long or neutral.” – D. Gartman
-“The best policy is to avoid shorting unless a major bear market is underway and downside momentum has been thoroughly established. Even then, your timing must sometimes be perfect. In a bull market the trend is truly your friend, and trading against the grain is usually a fool's errand.” – Clif Droke.
-Commandment #1: “Thou Shall Not Trade Against the Trend.” - James P. Arthur Huprich
 
MONDAY 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). 
 
LONG TERM INDICATOR
Monday, the Price and VIX indicators were positive; Sentiment & Volume indicators were neutral. With VIX recently below 10 for a couple of days in May, June, July, August, September and now October, VIX may be prone to incorrect signals. Usually, a rising VIX is a bad market sign; now it may move up, but that might just signal normalization of VIX, i.e., VIX and the Index may both rise. As an indicator, VIX is out of the picture for a while.
MY INVESTED STOCK POSITION:
TSP (RETIREMENT ACCOUNT – GOV EMPLOYEES) ALLOCATION
I increased stock allocation to 50% stocks in the S&P 500 Index fund (C-Fund) 24 March 2017 in my long-term accounts, based on short-term indicators. The remainder is 50% G-Fund (Government securities). This is a conservative retiree allocation, but I consider it fully invested for my situation.
 
The previous signal was a BUY on 2 June and the last actionable signal was a BUY (from a prior sell) on 15 November 2016.

Friday, October 13, 2017

Retail Sales … CPI … Consumer Sentiment … Trump Cancels Obamacare Subsidies? Nope. … Stock Market Analysis … ETF Trading

RETAIL SALES (Reuters)
“U.S. retail sales recorded their biggest increase in 2-1/2 years in September likely as reconstruction and clean-up efforts in areas devastated by Hurricanes Harvey and Irma boosted demand for building materials and motor vehicles.” Story at…
 
CPI (MarketWatch)
“The consumer price index rose 0.5% in September, the second big increase in a row and the largest in eight months…If food and energy are stripped out, core CPI rose a much smaller 0.1%.” Story at…
 
CONSUMER SENTIMENT (Bloomberg)
“U.S. consumer sentiment unexpectedly surged to a 13-year high as Americans’ perceptions of the economy and their own finances rebounded following several major hurricanes, a University of Michigan survey showed Friday.” Story at…
 
TRUMP CANCELS OBAMACARE SUBSIDIES? NOPE
“…congressional Republicans successfully challenged in a lawsuit the Obama administration's decision to make the reimbursement payments to insurers without getting the express budgetary authorization from Congress.” – CNBC
My cmt: I worked in the Federal Government for 35-years. I ran the USACE Operation and Maintenance Program in the Commonwealth of Virginia for several years. There is a long-standing rule established in Constitutional Law, and well understood in the Federal Government, that states there are 2 Bills that must be passed before funds can be spent: (1) an Authorization Bill (2) an Appropriation Bill. It is unlawful to spend funds without both.  The Justice Department ruled that in the absence of an Appropriation, the Government can’t spend money to subsidize Health Insurance companies under Obamacare.  The idea that an existing President should continue violating the law is an abomination – or perhaps I should say an Obamanation. If you read the news today, Trump was the bad guy. No, he is following the law and the Constitution. Regardless of how one feels about Obamacare or any other program for that matter, I am troubled by the attitude that the Constitution should be ignored if the reason is for the “good of the people.” It is rare that what is “good-for-the people” is good for every person. That’s why we have a Constitution – to protect the individual.
 
MARKET REPORT / ANALYSIS         
-Friday the S&P 500 was up about 0.1% to 2553.
-VIX dropped about 3% to 9.61.
-The yield on the 10-year Treasury slipped to 2.275%. (This suggests Treasuries were bought implying the Bond Ghouls are worried about the stock market.)
 
The S&P 500 has been flipping back and forth for several days as Mr. Market tries to make up his mind – pullback or not? Today the Index was up 0.09%. Over the last 5-days it is up 0.15%. Ignoring today, it would be just about flat.  Perhaps investors are confused. The Pros are giving us a clue. The Pros were selling yesterday, based on late day action, and today was more of the same. It’s hard to get too wound up though, since we haven’t seen much downside to the markets.
 
My sum of 17-Indicators remains bullish on a smoothed long-term. Today this stat was unchanged at +3. New-highs continue to climb, but the rate of that climb is slowing. As of now, new-highs are still bullish. Internals generally look pretty good, still a correction is always possible.
 
As I’ve been saying for a while, I think that before we see any meaningful pullback, we need to put in a top.  At this point another big move up, say around 1%, could mark another short-term top, especially since RSI and Bollinger Bands are warning of trouble. From there a retreat of some kind, probably in the 3-5% range, is probable. There’s no guarantee that there will be a big move that signals a short-term top, but it is fairly common.
 
I remain bullish longer-term. One wonders when this party will end so I will worry if the numbers deteriorate, but for now I remain fully invested.
 
If the report looks similar to recent ones, it’s because there has been little change in indicators recently.
 
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%.
*For additional background on the ETF ranking system see NTSM Page at…
 
Aerospace and Defense (ITA) remained #1 today. I am in ITA as of 21 Sept.
My trade in ITA is up 3% in the 3-weeks I’ve owned it. (Had a typo here. That’s embarrassing.)
 
SHORT-TERM TRADING PORTFOLIO - 2017 (Small-% of the total portfolio)
LONG
As I been saying for a while, it is tempting to make a VXX trade if and when we get a big move up signaling a short-term top.  VIX is at extreme lows. VXX would be a bet against the market and higher VIX – essentially a short.  This is a risky trade since as VIX options expire, they must be replaced with more expensive options (referred to as contango).  For this reason, VXX will lose value even if VIX stays the same. I need a really good set-up before I’ll short. I am not there yet.
 
My shorting rule is as follows:
-“In a bull market, you can only be long or neutral.” – D. Gartman
-“The best policy is to avoid shorting unless a major bear market is underway and downside momentum has been thoroughly established. Even then, your timing must sometimes be perfect. In a bull market the trend is truly your friend, and trading against the grain is usually a fool's errand.” – Clif Droke.
-Commandment #1: “Thou Shall Not Trade Against the Trend.” - James P. Arthur Huprich
 
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). 
 
LONG TERM INDICATOR
Friday, the Price and VIX indicators were positive; Sentiment & Volume indicators were neutral. With VIX recently below 10 for a couple of days in May, June, July, August, September and now October, VIX may be prone to incorrect signals. Usually, a rising VIX is a bad market sign; now it may move up, but that might just signal normalization of VIX, i.e., VIX and the Index may both rise. As an indicator, VIX is out of the picture for a while.
MY INVESTED STOCK POSITION:
TSP (RETIREMENT ACCOUNT – GOV EMPLOYEES) ALLOCATION
I increased stock allocation to 50% stocks in the S&P 500 Index fund (C-Fund) 24 March 2017 in my long-term accounts, based on short-term indicators. The remainder is 50% G-Fund (Government securities). This is a conservative retiree allocation, but I consider it fully invested for my situation.
 
The previous signal was a BUY on 2 June and the last actionable signal was a BUY (from a prior sell) on 15 November 2016.

Thursday, October 12, 2017

Producer Price Index (PPI) … Unemployment Claims … Crude Inventories … Stock Market Analysis … ETF Trading

PPI (MarketWatch)
“The producer price index jumped 0.4% in September…Most of the increase in wholesale prices last month was tied to a runup in gasoline prices after Hurricane Harvey knocked several major oil refineries off line.” Story at…
 
UNEMPLOYMENT CLAIMS (MarketWatch)
“Initial weekly jobless claims fell by 15,000 to 243,000 in early October to mark the lowest level in six weeks.” Story at…
 
CRUDE INVENTORIES (24/7Wallst)
“The U.S. Energy Information Administration (EIA) released its weekly petroleum status report Thursday morning, showing that U.S. commercial crude inventories decreased by 2.8 million barrels last week, maintaining a total U.S. commercial crude inventory of 462.2 million barrels.” Story at…
My cmt: Crude prices firmed on the news.
 
MARKET REPORT / ANALYSIS         
-Thursday the S&P 500 was DOWN about 0.2% to 2551.
-VIX rose about 1% to 9.91.
-The yield on the 10-year Treasury slipped to 2.321%.
 
My sum of 17-Indicators remains bullish on a smoothed long-term. Today it rose from +2 to +3.  Price has been up and down recently as investors take a break. Internals generally still look pretty good, still a correction is always possible.
 
As I’ve been saying for a while, I think that before we see any meaningful pullback, we need to put in a top.  At this point another big move up, say around 1%, could mark another short-term top, especially since RSI and Bollinger Bands are warning of trouble. From there a retreat of some kind, probably in the 3-5% range, is probable. There’s no guarantee that there will be a big move that signals a short-term top, but it is fairly common.
 
I remain bullish longer-term. One wonders when this party will end so I will worry if the numbers deteriorate, but for now I remain fully invested.
 
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%.
*For additional background on the ETF ranking system see NTSM Page at…
 
Aerospace and Defense (ITA) remained #1 today. I am in ITA as of 21 Sept.
My trade in ITA is up almost 9% in the 2months I’ve owned it.
 
SHORT-TERM TRADING PORTFOLIO - 2017 (Small-% of the total portfolio)
LONG
As I been saying for a while, it is tempting to make a VXX trade if and when we get a big move up signaling a short-term top.  VIX is at extreme lows. VXX would be a bet against the market and higher VIX – essentially a short.  This is a risky trade since as VIX options expire, they must be replaced with more expensive options (referred to as contango).  For this reason, VXX will lose value even if VIX stays the same. I need a really good set-up before I’ll short. I am not there yet.
 
My shorting rule is as follows:
-“In a bull market, you can only be long or neutral.” – D. Gartman
-“The best policy is to avoid shorting unless a major bear market is underway and downside momentum has been thoroughly established. Even then, your timing must sometimes be perfect. In a bull market the trend is truly your friend, and trading against the grain is usually a fool's errand.” – Clif Droke.
-Commandment #1: “Thou Shall Not Trade Against the Trend.” - James P. Arthur Huprich
 
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). 
 
LONG TERM INDICATOR
Thursday, the Price indicator was positive; Sentiment, VIX & Volume indicators were neutral. With VIX recently below 10 for a couple of days in May, June, July, August, September and now October, VIX may be prone to incorrect signals. Usually, a rising VIX is a bad market sign; now it may move up, but that might just signal normalization of VIX, i.e., VIX and the Index may both rise. As an indicator, VIX is out of the picture for a while.
MY INVESTED STOCK POSITION:
TSP (RETIREMENT ACCOUNT – GOV EMPLOYEES) ALLOCATION
I increased stock allocation to 50% stocks in the S&P 500 Index fund (C-Fund) 24 March 2017 in my long-term accounts, based on short-term indicators. The remainder is 50% G-Fund (Government securities). This is a conservative retiree allocation, but I consider it fully invested for my situation.
 
The previous signal was a BUY on 2 June and the last actionable signal was a BUY (from a prior sell) on 15 November 2016.

Wednesday, October 11, 2017

FOMC Minutes … JOLTS Job Opening Report … ADS Business Conditions Index … Stock Market Analysis … ETF Trading

FOMC MINUTES (CNBC)
“Federal Reserve officials see the economy expanding at a steady clip and indicate that an interest rate hike later this year is a near lock, despite some divisions over where inflation is headed.” Story at…
 
JOLTS (MarketWatch)
“The number of job openings in the country fell slightly to 6.08 million in August from a record 6.14 million in July…Ignore the jobs report for September that showed the first decline in U.S. employment since 2010. The labor market is sizzling and most industries still have their “help wanted” shingles out, a reflection of a sturdy and steadily growing economy in its ninth year of expansion.” Story at…
 
ADS BUSINESS CONDITIONS INDEX (Philly FED)
“The Aruoba-Diebold-Scotti business conditions index is designed to track real business conditions at high frequency. Its underlying (seasonally adjusted) economic indicators (weekly initial jobless claims; monthly payroll employment, industrial production, personal income less transfer payments, manufacturing and trade sales; and quarterly real GDP) blend high- and low-frequency information and stock and flow data. Both the ADS index and this web page are updated as data on the index's underlying components are released.” – Philadelphia FED. ADS Index available at…
 
TECHNICALLY SPEAKING (RIA)
“Investors seem to be residing in a world without any notable perceived risks. It is an extraordinary and unprecedented situation, particularly given unresolved issues of over-leveraging and associated over-capacity as well as profound disruption of business and economic models, which are not just depressing inflation but also causing extreme political and electoral outcomes while feeding Maslowian-type disappointments across labor markets.” – Victor Shvetz, head of global equity strategy of the investment bank Macquarie Group. Commentary at Real Investment Advice at…
 
MARKET REPORT / ANALYSIS         
-Wednesday the S&P 500 was up about 0.2% to 2555.
-VIX dipped about 2% to 9.85.
-The yield on the 10-year Treasury slipped to 2.347%.
 
RSI, (SMA-14)
Relative Strength measures the size of up-moves vs. all-moves on a 14-day moving average basis and presents the result as a percentile. For example, if the RSI is 85, it means that the size of up-moves are in the 85th percentile when compared to all moves over the 14-day period.  If ALL moves had been up, RSI would be 100 – a definite short term sell indicator. For my purposes, 30 is oversold (suggesting a turn-around to the upside) and 80 is overbought. If the up-moves and down-moves are equal in size over the 14-day period, RSI would be 50.
 
RSI was 84, definitely an overbought reading. There have been 4 readings over 80 in the last 2 or 3 weeks. RSI is reasonably predictive, but not perfect of course. The Bollinger Band indicator was very close to oversold.
 
My sum of 17-Indicators remains bullish on a smoothed long-term. Today it slipped from +7 to +2.  The number has been bouncing up and down but that is fairly normal; that’s why I use a smoothed value.
 
As I’ve been saying, I think that before we see any meaningful pullback, we need to put in a top.  At this point another big move up, say around 1%, could mark another short-term top, especially since RSI and Bollinger Bands are warning of trouble. From there a retreat of some kind, probably in the 3-5% range, is probable. There’s no guarantee that there will be a big move that signals a short-term top, but it is fairly common.
 
I remain bullish longer-term. One wonders when this party will end so I will worry if the numbers deteriorate, but for now I remain fully invested.
 
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%.
*For additional background on the ETF ranking system see NTSM Page at…
 
Aerospace and Defense (ITA) remained #1 today. I am in ITA as of 21 Sept.
My trade in ITA is up more than 8% in the month I’ve owned it.
 
SHORT-TERM TRADING PORTFOLIO - 2017 (Small-% of the total portfolio)
LONG
As I been saying for a while, it is tempting to make a VXX trade if and when we get a big move up signaling a short-term top.  VIX is at extreme lows. VXX would be a bet against the market and higher VIX – essentially a short.  This is a risky trade since as VIX options expire, they must be replaced with more expensive options (referred to as contango).  For this reason, VXX will lose value even if VIX stays the same. I need a really good set-up before I’ll short. I am not there yet.
 
My shorting rule is as follows:
-“In a bull market, you can only be long or neutral.” – D. Gartman
-“The best policy is to avoid shorting unless a major bear market is underway and downside momentum has been thoroughly established. Even then, your timing must sometimes be perfect. In a bull market the trend is truly your friend, and trading against the grain is usually a fool's errand.” – Clif Droke.
-Commandment #1: “Thou Shall Not Trade Against the Trend.” - James P. Arthur Huprich
 
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.  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). 
 
LONG TERM INDICATOR
Wednesday, the Price indicator was positive; Sentiment, VIX & Volume indicators were neutral. With VIX recently below 10 for a couple of days in May, June, July, August, September and now October, VIX may be prone to incorrect signals. Usually, a rising VIX is a bad market sign; now it may move up, but that might just signal normalization of VIX, i.e., VIX and the Index may both rise. As an indicator, VIX is out of the picture for a while.
MY INVESTED STOCK POSITION:
TSP (RETIREMENT ACCOUNT – GOV EMPLOYEES) ALLOCATION
I increased stock allocation to 50% stocks in the S&P 500 Index fund (C-Fund) 24 March 2017 in my long-term accounts, based on short-term indicators. The remainder is 50% G-Fund (Government securities). This is a conservative retiree allocation, but I consider it fully invested for my situation.
 
The previous signal was a BUY on 2 June and the last actionable signal was a BUY (from a prior sell) on 15 November 2016.

Tuesday, October 10, 2017

Small Business Optimism … Stock Market Analysis … ETF Trading

SMALL BUSINESS OPTIMISM (Advisor Perspectives)
“The NFIB Index of Small Business Optimism tumbled in September from 105.3 to 103 led by a steep drop in sales expectations, not just in hurricane-affected states, but across the country…’Small business owners across the country were measurably less enthusiastic last month.’” Analysis at…
 
MARKET REPORT / ANALYSIS         
-Tuesday the S&P 500 was up about 0.2% to 2551.
-VIX dipped about 2% to 10.08.
-The yield on the 10-year Treasury was little changed at 2.361%.
 
My sum of 17-Indicators remains bullish on a smoothed long-term. Today it rose from +4 to +7. A plus number is bullish.  There isn’t anything dramatic in the indicators. Bollinger Bands are close to being overbought; RSI is high too.  Those are the most notable negative short-term indicators.
 
As I’ve been saying, I think that before we see any meaningful pullback, we need to put in a top.  At this point another big move up, say around 1%, could mark another short-term top. From there a retreat of some kind, probably in the 3-5% range, is probable. There’s no guarantee that there will be a big move that signals a short-term top, but it is fairly common.
 
I remain bullish longer-term. One wonders when this party will end so I will worry if the numbers deteriorate, but for now I remain fully invested.
 
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%.
*For additional background on the ETF ranking system see NTSM Page at…
 
Aerospace and Defense (ITA) remained #1 today. I am in ITA as of 21 Sept.
Avoid XLE; its 120-day moving average is still falling. My trade in ITA is up more than 8% in the month I’ve owned it.
 
SHORT-TERM TRADING PORTFOLIO - 2017 (Small-% of the total portfolio)
LONG
As I been saying for a while, it is tempting to make a VXX trade if and when we get a big move up signaling a short-term top.  VIX is at extreme lows. VXX would be a bet against the market and higher VIX – essentially a short.  This is a risky trade since as VIX options expire, they must be replaced with more expensive options (referred to as contango).  For this reason, VXX will lose value even if VIX stays the same. I need a really good set-up before I’ll short. I am not there yet.
 
My shorting rule is as follows:
-“In a bull market, you can only be long or neutral.” – D. Gartman
-“The best policy is to avoid shorting unless a major bear market is underway and downside momentum has been thoroughly established. Even then, your timing must sometimes be perfect. In a bull market the trend is truly your friend, and trading against the grain is usually a fool's errand.” – Clif Droke.
-Commandment #1: “Thou Shall Not Trade Against the Trend.” - James P. Arthur Huprich
 
TUESDAY 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). 
 
LONG TERM INDICATOR
Tuesday, the Price indicator was positive; Sentiment, VIX & Volume indicators were neutral. With VIX recently below 10 for a couple of days in May, June, July, August and September, VIX may be prone to incorrect signals. Usually, a rising VIX is a bad market sign; now it may move up, but that might just signal normalization of VIX, i.e., VIX and the Index may both rise. As an indicator, VIX is out of the picture for a while.
MY INVESTED STOCK POSITION:
TSP (RETIREMENT ACCOUNT – GOV EMPLOYEES) ALLOCATION
I increased stock allocation to 50% stocks in the S&P 500 Index fund (C-Fund) 24 March 2017 in my long-term accounts, based on short-term indicators. The remainder is 50% G-Fund (Government securities). This is a conservative retiree allocation, but I consider it fully invested for my situation.
 
The previous signal was a BUY on 2 June and the last actionable signal was a BUY (from a prior sell) on 15 November 2016.