Friday, September 30, 2016

Personal Income/Spending … PCE Prices … Chicago PMI … FED Want to Buy Stocks??!! … Stock Market Analysis

PERSONAL SPENDING (WSJ)
“Consumer spending leveled off in August, a sign of caution among households amid lackluster economic growth.
Personal consumption, which measures how much Americans spent on everything from new cars to nursery schools, was unchanged in August from a month earlier…Incomes rose 0.2%, the slowest growth since February.” Story at…
 
PCE PRICES (Investing.com)
“…the annual increase in core PCE prices rose closer to the Federal Reserve's (Fed) target, official data showed on Friday.Story at…
 
CHICAGO PMI (Business Insider)
“Business activity in Chicago accelerated in September after a slowdown in August, according to the Institute of Supply Management and MNI Indicators. They reported their purchasing manager's index at 54.2, up from 51.5 in August…” Story at…
 
PURCHASING STOCKS AND CORPORATE BONDS COULD HELP IN A DOWNTURN – YELLEN (CNBC)
“The Federal Reserve could get benefits from buying assets other than long-term U.S. debt if in a future downturn it could not buy any more government bonds, Fed Chair Janet Yellen said on Thursday…buying equities and corporate bonds could have costs and benefits.” Story at…
My cmt: Good God, please No! Government intervention in free markets is a frightening thought - we’ve got too much already.
 
As Friday morning indicators show the bullish trend is likely to continue. I will be very busy for a while, so I’ll report back Monday.  Have a good weekend.

Thursday, September 29, 2016

GDP … Jobless Claims … Stock Market Analysis


GDP-3rd ESTIMATE (CNBC)
“The U.S. economy grew at a modestly faster pace in the second quarter than previously estimated, but the latest data confirms the expansion decelerated in the first half of the year. Gross domestic product, a broad measure of goods and services produced across the economy, expanded at an inflation-adjusted 1.4% seasonally adjusted annual rate in the second quarter…” Story at…
 
JOBLESS CLAIMS (MarketWatch)
“Applications for unemployment benefits rose 3,000 to 254,000 in late September, but the low level of initial claims points to a steadily improving labor market in which jobs are the easiest to find in years.” Story at…
 
ANTIBIOTIC RESISTENCE SOLVED? (Sciencealert.com)
“A 25-year-old student has just come up with a way to fight drug-resistant superbugs without antibiotics….Shu Lam, a 25-year-old PhD student at the University of Melbourne in Australia, has developed a star-shaped polymer that can kill six different superbug strains without antibiotics, simply by ripping apart their cell walls…the SNAPPs that Lam has designed are so large that they don't seem to affect healthy cells at all.” Story at…
My cmt: Lab testing on mice seems miraculous with no resistance after multiple generations.  It’s too early, but one wonders, “Could Nano-technology replace drugs?”
 
MARKET REPORT / ANALYSIS        
-Thursday the S&P 500 was down about 0.9% to 2151 at the close.
-VIX rose about 13% to 14.02.
-The yield on the 10-year Treasury slipped slightly to 1.576%.
 
Stocks began falling around noon when word circulated that Hedge Funds were pulling funds from Deutsche Bank.  Deutsche Bank shares sold off earlier this week and were down about 6% today. They are bigger than Lehman was so this seems to be a concern. (Some peg the Lehman failure as the start of the Financial crisis.)
 
Thursday the S&P 500 closed near its lower trend line.  Volume was about 15% above the monthly norm on the NYSE. No point in getting too wound up over increased volume since it was up about 10% yesterday and that was on an up-day.
 
The size of the down-move Thursday was statistically significant and that means that the price-volume move exceeded my statistical parameters and, in about 60% of the time, that leads to an up-day the next day (Friday).
 
My daily sum of 16-indicators moved down from +7 to +1. This series shows a lot of fluctuation so a smoothed value is more telling.  On a 10-day basis, indicators improved significantly so, overall, indicators still remain bullish. Money Trend and Smart Money indicators remain looking up too.
 
I remain short-term bullish and 2200 to 2250 seems likely. Long-term, I’m fully invested at 50% in stocks (a conservative-retiree allocation) – that’s hold my nose bullish.
 
TRADING PORTFOLIO
2x S&P 500 ETF (SSO): Established Thursday, 22 Sep.
 
THURSDAY MARKET INTERNALS (NYSE DATA)
-10-day moving average of the percentage of stocks advancing (NYSE): 53.2% (58.6% Wednesday.) A number above 50% is usually BULLISH for the markets short-term.
-150-day moving average of advancing stocks: 54.6%.
  (A value above 50% indicates an up-trend.)
- McClellan Oscillator: improved from +18 to -16 (percentage calculation method).
- New-highs minus new-lows: +77 (It was +92 Wednesday.)
-10-day moving average of the change in spread: +5.
  In other words, over the last 10-days, on average, the spread has increased by 5 each day.
 
Market Internals switched to 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, Volume, VIX & Sentiment indicators were neutral. Overall the long-term indicator remained HOLD.
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) Friday, 23 Sep in my long-term accounts based on a number of indicators other than Long Term. Remainder is 50% G-Fund. (Turns out I made my request for a transfer into the C-fund too late on Thursday.) This is a conservative retiree allocation.

Wednesday, September 28, 2016

Durable Goods Orders … Crude Inventories … Stock Market Analysis


DURABLE GOODS ORDERS (Marketwatch)
“Orders for durable or long-lasting goods flattened out in August after a sizable gain in the prior month, pointing to ongoing difficulties for American manufacturers. Stripping out transportation, orders sagged 0.4%...” Story at…
CRUDE INVENTORIES (fuelfix)
“Crude oil stockpiles fell for the fourth consecutive week, declining by nearly 2 million barrels last week, the Energy Department reported Wednesday. Gasoline inventories, however, rose 2 million barrel last week.  Both crude and gasoline stockpiles remain at historically high levels.” Story at…
MARKET REPORT / ANALYSIS        
-Wednesday the S&P 500 was up about 0.5% to 2171 at the close.
-VIX fell about 5% to 12.39 at the close.
-The yield on the 10-year Treasury rose to 1.57%.
This is going to sound like recent reports, because indicators keep getting better; but here goes…
Indicators are still pointing up and my sum of 16-indicators moved up from +5 to +7.  On a 10-day basis indicators continued to improve. Sentiment (%-bulls in selected Rydex/Guggenheim bull-bear funds) has declined to 65%-bulls and that’s enough to suggest that the Index can make new highs.
Not all is bullish though.  The advance-decline ratio remains “overbought”.  This indicator can be very early and it can remain overbought for some time, so no need to worry yet.
I remain short-term bullish and 2200 to 2250 seems likely. Long-term, I’m fully invested at 50% in stocks (a conservative-retiree allocation) – that’s hold my nose bullish.
TRADING PORTFOLIO
2x S&P 500 ETF (SSO): Established Thursday, 22 Sep.
That’s a leveraged long position, but not everyone agrees as noted in the below commentary “Traders Alert”…
WEDNESDAY MARKET INTERNALS (NYSE DATA)
-10-day moving average of the percentage of stocks advancing (NYSE): 58.6% (55.9% Tuesday.) A number above 50% is usually BULLISH for the markets short-term.
-150-day moving average of advancing stocks: 54.8%.
  (A value above 50% indicates an up-trend.)
- McClellan Oscillator: improved from -5 to +18 (percentage calculation method).
- New-highs minus new-lows: +92 (It was +60 Tuesday.)
-10-day moving average of the change in spread: +10.
  In other words, over the last 10-days, on average, the spread has increased by 10 each day.
Market Internals remained positive 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. Volume, VIX & Sentiment indicators were neutral. Overall the long-term indicator remained HOLD.
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) Friday, 23 Sep in my long-term accounts based on a number of indicators other than Long Term. Remainder is 50% G-Fund. (Turns out I made my request for a transfer into the C-fund too late on Thursday.) This is a conservative retiree allocation.

Tuesday, September 27, 2016

Consumer Confidence Up… Dallas FED Manufacturing Up … Richmond FED Manufacturing Up … Trucking Up … Stock Market Analysis … Trading Alert


CONSUMER CONFIDENCE (Business Insider)
“Consumer confidence just surged to its highest level since the recession. The latest reading on consumer confidence from the Conference Board came in a 104.1 for September, up from the prior month's 101.8.” Story at…
 
DALLAS FED MANUFACTURING IMPROVES BUT STILL NEGATIVE (Advisor Perspectives)
“Texas factory activity increased markedly in September, according to business executives responding to the Texas Manufacturing Outlook Survey…The general business activity index remained negative for a 21st consecutive month, although it edged up to -3.7.” Story at…
 
RICHMOND FED MANUFACTURING (Advisor Perspectives)
“…the Richmond Fed Manufacturing Composite Index increased 2 points to -8 from last month's -11… ‘Manufacturing activity in the Fifth District continued to soften in September, but somewhat less so than in August, according to the Richmond Fed's latest survey. New orders and shipments decreased this month at a slower pace, while backlogs decreased at about the same pace as last month. Hiring activity weakened across firms and wage increases were less widespread. Although raw materials prices rose at a somewhat faster pace in September, prices of finished goods barely increased in the month.’” ...Commentary and analysis at…
 
ATA TRUCKING JUMPS (ATA)
“American Trucking Associations’ advanced seasonally adjusted (SA) For-Hire Truck Tonnage Index increased 5.7% in August, following a 2.1% decline during July…Compared with August 2015, the SA index rose 5.9%, the largest year-over-year gain since May also 5.9%…Year-to-date, compared with the same period in 2015, tonnage was up 3.5%.” Press release at…
 
MARKET REPORT / ANALYSIS        
-Tuesday the S&P 500 was up about 0.6% to 2160 at the close.
-VIX fell about 10% to 13.1 at the close.
-The yield on the 10-year Treasury dropped to 1.56%.
 
Indicators are still pointing up and my sum of 16-indicators moved up from zero to +5.  On a 10-day basis indicators continued to improve. Sentiment (%-bulls in selected Rydex/Guggenheim bull-bear funds) has declined to 65%-bulls and that’s enough to suggest that the Index can make new highs.
 
Not all is bullish though.  The advance-decline ratio is now “overbought”.  This indicator can be very early and it can remain overbought for some time, so no need to worry yet.
 
Reviewing my losing trade when I went short as the Index recovered from its February swoon, I realize I put too much faith in the Money Trend indicator.  I found that it tends to be overly exuberant after a correction.  In other words it got too high and then fell and that gave a sell signal while the markets continued to rise…Live and learn.
 
Last night, futures shot up 0.35% as the debate got underway so investors must have decided that the country would survive if either one of these two loonies got elected. I won’t be voting for either of them, but I will be voting.
 
I remain short-term bullish and 2200 to 2250 seems likely. Long-term, I’m fully invested at 50% in stocks (a conservative-retiree allocation) – that’s hold my nose bullish.
 
TRADING PORTFOLIO
2x S&P 500 ETF (SSO): Established Thursday, 22 Sep.
That’s a leveraged long position, but not everyone agrees as noted in the below commentary “Traders Alert”…
 
TRADERS ALERT (SafeHaven)
“In our opinion, speculative short positions are favored (with stop-loss at 2,210, and profit target at 2,050, S&P 500 index).
Our intraday outlook is bearish, and our short-term outlook is bearish. Our medium-term outlook is neutral, following S&P 500 index breakout above last year's all-time high:
Intraday outlook (next 24 hours): bearish Short-term outlook (next 1-2 weeks): bearish
Medium-term outlook (next 1-3 months): neutral
Long-term outlook (next year): neutral”
My cmt: My indicators are bullish, but it’s another opinion.
 
TUESDAY MARKET INTERNALS (NYSE DATA)
-10-day moving average of the percentage of stocks advancing (NYSE): 55.9% (51.1% Monday.) A number above 50% is usually BULLISH for the markets short-term.
-150-day moving average of advancing stocks: 54.8%.
  (A value above 50% indicates an up-trend.)
- McClellan Oscillator: improved from -13 to -5 (percentage calculation method).
- New-highs minus new-lows: +57 (It was +39 Monday.)
-10-day moving average of the change in spread: +7.
  In other words, over the last 10-days, on average, the spread has increased by 7 each day.
Market Internals switched to positive 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. Volume, VIX & Sentiment indicators were neutral. Overall the long-term indicator remained HOLD.
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) Friday, 23 Sep in my long-term accounts based on a number of indicators other than Long Term. Remainder is 50% G-Fund. (Turns out I made my request for a transfer into the C-fund too late on Thursday.) This is a conservative retiree allocation.