CHICAGO PMI (MarketWatch)
“A measure of Midwest economic activity slipped in
December after touching a near two-year high the month before. The Chicago PMI
fell 3 points to 54.6…” Story at…
MARKET REPORT / ANALYSIS
-Friday the S&P 500 was down about 0.8% to 2250.
-VIX rose about 5% to 14.04.
-The yield on the 10-year Treasury slipped to 2.45%.
Lowry Research is a stock market research firm. One of their methodologies involves
calculating the supply and demand for each operating company on the NYSE based
on buy-sell data each day. The data can
be aggregated into an overall view of the market or for making stock-specific,
buy-sell recommendations. It is possible
to construct an indicator to approximate their method with considerably less accurate
results; but that does not mean a simpler Macro examination is not useful. My
Money Trend indicator is designed along those lines. It has been trending down
for some time (as I have reported regularly here), but I see that the numbers reached
extremes associated with Tops last week.
My topping indicator has been saying the same thing for a month. I would
not be surprised to see a pullback start after the New Year, say, Tuesday?
We’ll see. Some of the other indicators look more positive, but it is
hard to place too much faith in ANY indicators due to the Holiday low volumes.
We
can look for momentum signs in Friday’s late-day action, but late-day action
was mixed Friday. There was a 5 pt. rally in the last 10-minutes of the trading
day that was bullish. Oddly, there was
also a large minus Tick, -521. That
means that the sum of all “last-trades-of-the-day” was decidedly negative. So,
we’ll wait for Tuesday.
I still have short positions in the trading portfolio.
Long-term I’m fully invested at 50% in stocks (a
conservative-retiree allocation). The
long-term trend remains up.
CURRENT RANKING OF 11 ETFs (Ranked Daily)*
#1 RANK for the past 39-days: Financial Select Sector
SPDR ETF (XLF).
#2 RANK: iShares Russell 2000 – Small Cap (IWM)
#3 RANK: Energy Select Sector SPDR ETF (XLE)
While the XLF remains ranked #1 using the methodology
explained at the link below, IWM is outperforming the others over the past
3-weeks on a percentage gained basis.
*For background on the ETF ranking system see NTSM Page
at…
TRADING PORTFOLIO (Small-% of the total portfolio)*
2x Short S&P 500 (SDS): Established 6 Dec.
2x Short S&P 500 (SDS): Established 16 Dec.
NET: +8.7%
Market Internals were 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 Volume indicator was neutral. The Price and
VIX indicators were positive. The Sentiment indicator was negative.
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.
