Friday, April 1, 2016


- Friday, the S&P 500 was up about 0.6% to 2073 at the close.
-VIX fell about 6% to 13.10.
-The yield on the 10-year Treasury rose to 1.79%
I am still negative on the markets because short-term indicators are still pointing down.  That may be hard to accept, because they have been suggesting down for some time and the market has not yet agreed. 
As of Friday, the S&P 500 has climbed slightly above a point at which I reduced stock holdings on 30 December.   
I am also losing in the higher-risk, short-term, trading portfolio since I am still short. That’s why I have frequently commented here that traders should keep the trading portfolio small so if losses are incurred, they will not harm one’s overall financial health.
The short-term Money Trend indicator is neutral at this point. I continue to hold short positions mostly in SH and some in QID.
(I am getting data from various sites. Some of the numbers are subject to minor revision so the previous day’s numbers may be slightly different than reported yesterday.)
The 10-day moving average of the percentage of stocks advancing (NYSE) fell to 53.9% Friday. It was 57.1% Thursday. (A number above 50% is usually GOOD news for the markets.)
On a longer term, the 150-day moving average of advancing stocks slipped to 51.6%. A value above 50% generally indicates an up-trend, but the slope of the 200-dMA is still down, so the trend must still be considered down. The McClellan Oscillator (a Breadth measure) fell, but remained positive.
New-highs again outpaced New-lows. The spread (new-highs minus new-lows) was +172 Friday. (It was +161 Thursday.)   The 10-day moving average of the change in spread rose to +1. In other words, over the last 10-days, on average; the spread has INCREASED by 1 each day. Market Internals switched from positive to neutral on the markets.

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).  Of course, few trend-following systems will do well in an extreme low-volatility, nearly straight-up year like 2014.
Friday, Price & VIX were positive. Sentiment & Volume were neutral.  The long-term NTSM indicator is BUY. I have not followed the guidance yet. My numbers suggest that the Index is topping out. I have been saying that for a while as the market has moved up; but there are some topping indicators (RSI & the Breadth Index Top Indicator suggest top real soon.  We’ll see.

On 30 Dec I reduced my invested position in my retirement account to 30% invested in stocks thru an S&P 500 Index fund (“C”-fund in the TSP) and on 15 Jan I reduced stock allocation to zero in long-term accounts.
The S&P 500 peaked in Mid-May and has not been able to break higher in the past 10-months. That looks like a top to me. See “Why the Bull Market May be Dead” in my 14 December blog at…