“U.S. private employers added 216,000 jobs in November,
well above economists' expectations, a report by a payrolls processor showed on
Wednesday.” Story at…
PERSONAL SPENDING / INCOME (Bloomberg)
“Personal spending increased at a more moderate pace in
October after the biggest gain in five months, while faster income growth
signaled demand will be sustained.
Purchases rose 0.3 percent after a 0.7 percent September
advance…” Story at…
CHICAGO PMI (Marketwatch)
“A measure of Chicago-area economic activity surged in
November to its highest level in almost two years, another sign the
manufacturing sector is starting to strengthen. The Chicago PMI jumped to 57.6
in November, its highest level since January 2015…” Story at…
FED BEIGE BOOK (WSJ)
“The Fed’s latest roundup of anecdotal information on
regional economic conditions, known as the beige book, said seven of the central bank’s 12
districts reported moderate or modest growth from early October through
mid-November, and an additional three reported slight growth.” Story at…
CRUDE INVENTORIES (Reuters)
“U.S. crude oil stockpiles fell unexpectedly last week,
while distillate inventories rose sharply, the Energy Information
Administration's data showed on Wednesday.
Crude inventories fell 884,000 barrels in the week to
Nov. 25, compared with analysts' expectations for an increase of 636,000
barrels.” Story at…
My cmt: This is considered somewhat bullish for crude,
but not huge.
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 was down about 0.3% to 2199 at
the close.
-VIX rose about 3% to 13.33 at the close.
-The yield on the 10-year Treasury rose to 2.37%.
RSI dropped to 69 so it is now neutral. The
Advance-Decline ratio cleared its overbought indication and is neutral too.
Sentiment.
The 5-dMA of %-bulls in selected Rydex/Guggenheim
long/short funds has fallen to 48% as of Tuesday’s close (today’s data is not
available until after I post this blog). I had to go back to 12 March 2013 to
find a value below 50%-bulls. “What was
happening to the market in March of 2013?” you might ask. The surprising answer
is not much. VIX had fallen to below 12
(a bearish level for some traders), but it would be another month later before
there was a modest pullback of maybe 3 or 4%. The current low %-Bulls value suggests
we may get the same result as in 2013 – a slow melt-up followed by a small
pullback, perhaps after Santa has arrived. There are some bearish signs though.
In spite of the Sentiment numbers, Short-term I remain
somewhat bearish. My Money Trend indicator and the Sum of 16-Indicators are
pointing down. Whether bearish signs will be confirmed by other indicators, or
perhaps by the market, remains to be seen. I haven’t seen too much further
confirmation on the bearish leaning so no trades at this point. The market is a
bit muddled.
Long-term I’m fully invested at 50% in stocks (a
conservative-retiree allocation) – I remain “hold-my-nose” bullish. The long-term trend remains up.
TRADING PORTFOLIO (Small-% of the total portfolio)*
NET: +8.2%
*I am not really happy doing this much trading, but I
need to rebuild the trading balance after holding my shorts too long after the
February correction. (I really should
follow my own indicators. My system is smarter than I am!)
CURRENT BEST OF 11 ETFs
#1 RANK: Financial Select Sector SPDR ETF (XLF).
#2 RANK: iShares U.S. Aerospace & Defense ETF (ITA)
I am checking numbers…more to come.
1. iShares Russell 2000-SmallCap (IWM);
2. iShares Select Dividend (DVY);
3. Industrial Select Sector SPDR ETF (XLI);
4. Consumer Discret Sel Sect SPDR® ETF (XLY);
5. Energy Select Sector SPDR ETF (XLE);
6. Financial Select Sector SPDR ETF (XLF);
7. iShares Nasdaq Biotechnology ETF (IBB);
8. Health Care Select Sector SPDR® ETF (XLV);
9. iShares U.S. Aerospace & Defense ETF (ITA);
10. Technology Select Sector SPDR ETF (XLK)
11. S&P 500 (SPY)
WEDNESDAY MARKET INTERNALS (NYSE DATA)
-10-day moving average of the percentage of stocks
advancing (NYSE): 53.5 %. (56.7 % yesterday.) A number above 50% is usually
BULLISH for the markets short-term.
-150-day moving average of advancing stocks: remained
52.3%. (A value above 50% indicates a long-term, up-trend.)
-McClellan Oscillator: fell to +39 (percentage
calculation method adjusted to fit McClellan’s values).
-New-highs minus new-lows: +152 (It was +107 yesterday.)
-10-day moving average of the change in spread: +4. In
other words, over the last 10-days, on average, the spread has increased by 4
each day.
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 Sentiment, Volume and VIX indicators were
neutral. The Price indicator was positive. Overall the long-term indicator
remained Neutral.
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 2016 in my long-term
accounts.
Remainder is 50% G-Fund. This is a conservative retiree allocation.
