“America is unique among democracies in requiring, at all
levels of politics, that vast amounts of cash be raised from the private
sector. In order to get this money, senators and members of Congress need
something to offer in return, and what they sell are amendments to the tax
code.” Commentary at…
My cmt: This really isn’t a political column. It will
make you mad no matter your political affiliation.
STRATEGY FROM J. SAUT (Raymond James)
“…we think the “profits recession” troughed in 2Q16 and
that easy earnings comparisons will be seen in 3Q and 4Q of this year. Now many
strategists and analysts downplay such an earnings improvement as being driven
by “easy earnings comparisons,” but as our friend Rich Bernstein writes:
“However, every profits cycle, by definition, begins with a series of easy
comparisons. It is impossible to begin a cycle with difficult
comparisons… there is a decent chance our models’ prediction of downside
vulnerability in the mid/late September timeframe may be over, but it will take
a close above 2187 by the SPX to turn our models positive. If that happens, it
would suggest the equity markets will grind higher into 1Q17…” - Jeffery Saut, Raymond James. Commentary at…
MARKET REPORT / ANALYSIS
-Monday the S&P 500 was up about 0.5% to 2164 at the
close.
-VIX dipped about 0.7% to 13.38.
-The yield on the 10-year Treasury slipped to 1.72%.
Volume was way down, about 20% below the monthly average
so it would appear that investors remain wary of this market in the short-term.
My indicators went from minus -5 to +2 so there was considerable improvement.
This is a volatile series so I keep a 10-day value and it improved too. Market
Internals were bullish overall so it looks like the most likely move from here
is up.
Long-term, I’m fully invested at 50% in stocks (a
conservative-retiree allocation) – that’s hold my nose bullish.
TRADING PORTFOLIO
I am doing more active trading in an effort to make up
for holding shorts too long this summer. Will it be success or disaster? Based
on my last 2-trades, I’m headed in the wrong direction. My plan was to trade
only on strong signals – so far I have not been well disciplined nor have I
followed my plan. The short-term trading indicator is Neutral today so I am
out. I’ll try to follow my plan for a change and trade stronger signals. There’s
no guarantee that will work either.
MONDAY MARKET INTERNALS (NYSE DATA)
-10-day moving average of the percentage of stocks
advancing (NYSE): 50.4%. (46.0% yesterday.) A number above 50% is usually BULLISH
for the markets short-term.
-150-day moving average of advancing stocks: 54%. (A
value above 50% indicates an up-trend.)
-McClellan Oscillator: improved from -42 to -16
(percentage calculation method).
-New-highs minus new-lows: +122 (It was +39 yesterday.)
-10-day moving average of the change in spread: +8. In
other words, over the last 10-days, on average, the spread has increased by 8
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
Monday 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. Remainder is 50% G-Fund. This is a
conservative retiree allocation.
