“The productivity of American workers rose in the
July-September quarter at the fastest pace in two years while labor costs
slowed after a big jump in the spring. Productivity increased in the third
quarter at a 3.1 percent rate, the Labor
Department reported
Tuesday.” Story at…
FACTORY ORDERS (MarketWatch)
“Factory orders jumped 2.7% in October, the fourth
straight monthly gain and the largest since January 2015, the Commerce
Department reported Tuesday.” Story at….
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 was up about 0.3% to 2212 at the
close.
-VIX fell about 3% to 11.79 at the close.
-The yield on the 10-year Treasury rose to 2.4%.
My very reliable Topping Indicator again flashed “TOP”
today. (This isn’t necessarily signaling
a major top and may only be calling for a 3-5% pullback.) Today there was a
little more confirmation.
Bollinger Bands are signaling trouble too; the S&P
500 is now crowding the upper Bollinger Band. RSI is in neutral territory, but
it was a clear sell at the prior high on 25 November, so one can’t feel too
great about the neutral RSI number. (Today’s S&P 500 close nearly matched
the prior 25 Nov high.)
“Money Trend” resumed its negative reading, but just
barely. The “SUM of 16-Indicators” was also just barely negative. Market Internals switched to neutral. The
new-high/new-low data looked like it might roll over soon. That’s somewhat of a surprise given
yesterday’s positive reading. Overall, Short-term indicators are negative,
although the run-up in the afternoon improved some of the indicators. While there
are negative indicators, they are not strongly negative.
As noted in my blog post earlier in the day, I took a
small short position in the 2x Inverse S&P 500 ETF (SDS) in the morning and
I added to it late in the day because it looked like a bit of a sell off was
underway. I should have waited because the
S&P 500 switched upward and finished strongly in the last 15-minutes.
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)*
Financial Select Sector SPDR ETF (XLF) Est. 1 Dec.
2x Short S&P 500 (SDS): Established 6 Dec.
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 RANKING OF 11 ETFs (Ranked Daily)*
#1 RANK for the past 21-days: Financial Select Sector
SPDR ETF (XLF).
#2 RANK: iShares U.S. Aerospace & Defense ETF (ITA)
#3 RANK: iShares Russell 2000 – SmallCap (IWM)
Energy Select Sector SPDR ETF (XLE) dropped to 4th
place today on a poor crude showing.
*For background on the ETF ranking system see NTSM Page
at…
TUESDAY MARKET INTERNALS (NYSE DATA)
-10-day moving average of the percentage of stocks
advancing (NYSE): 54.3%. (54.7% yesterday.) A number above 50% is usually
BULLISH for the markets short-term.
-150-day moving average of advancing stocks: rose to 52.7%.
(A value above 50% indicates a long-term, up-trend.)
-McClellan Oscillator: rose from 72 to 123 (percentage
calculation method adjusted to fit McClellan’s values).
-New-highs minus new-lows: +250 (It was +196 yesterday.)
-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 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
Tuesday 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.
