“JOLTS for November is
not quite as optimistic [as last week’s Employment Report]. New hires, people
who quit voluntarily and layoffs were essentially flat through all of last
year, after showing substantial improvement in 2015.” Story at…
http://www.seattletimes.com/business/economy/not-much-movement-in-hiring-quits-and-layoffs-for-2016/
WHOLESALE INVENTORIES (MarketWatch)
“Wholesale inventories
in the U.S. jumped 1% in November to
mark the largest increase in two years and signaling an increase in production
that’s likely to boost the government’s official scorecard for economic growth
in the final three months of 2016.” Story at….
SMALL BUSINESS SURVEY (Advisor Perspectives)
“Small business optimism rocketed to its highest level
since 2004, with a stratospheric 38-point jump in the number of owners who
expect better business conditions, according to the monthly National Federation
of Independent Business (NFIB) Index of Small Business Optimism, released
today.” Commentary & Charts at…
ECONOMICS LESSON FROM PROFESSOR HUSSMAN, PhD. (Hussman
Funds)
“For every dollar of “stuff” we import from foreign
countries, we have to pay for it by transferring an equal value of “stuff” in
the other direction. That stuff can either be goods and services, or
securities. We obtain the savings of foreigners by exporting securities to
them, rather than goods and services. But here’s the accounting hitch. A net
import of foreign savings is equivalent to running a trade deficit. By
exporting more securities than we import, we obtain foreign savings to finance
U.S. gross domestic investment, but it must then also be true that we’re
exporting fewer goods and services than we import.
Here’s the problem: pursue a policy to reduce the trade
deficit, and you automatically (and possibly unintentionally) pursue a policy
to reduce the import of foreign savings. Now, that may be all well and good
when domestic sectors are running surpluses. If the combined savings of
households, businesses and the government are more than enough to finance our
own gross domestic investment, the U.S. can run a trade surplus and can lend
the excess savings to the rest of the world, becoming a net creditor. The
problem is that’s not anything close to the position of the United States…the net effect [of punitive
trade policies & higher deficits] will be to crowd out and sharply restrain
gross domestic investment.” –
John Hussman, PhD., Weekly Market Commentary from…
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 was unchanged at 2269.
-VIX dipped about 0.6% to 11.49.
-The yield on the 10-year Treasury was unchanged at 2.37%.
60% of the volume was up today and 63% of stocks were
advancing. What happened to the S&P 500? It was unchanged and gave up early
gains all afternoon. Normally, I’d say
that the S&P 500 would catch up to the small caps that outperformed today,
but the late day action continues to suggest more selling ahead.
There was general improvement in many indicators. Money
Trend is up; the Sum of 16-Indicators improved from +3 Monday to +7 Tuesday and
is up on a 10-day basis too; but other indicators remain down suggesting some
selling ahead.
Some Bear issues are: Market Internals are not confirming
the bull move even though they did all turn positive today - Internals are
lagging the Index. The S&P 500 is very close to the upper Bollinger Band (a
bear signal) and my “calm-before-the-storm” indicator is flashing “sell”.
All in all, I think Indicators suggest that the S&P
500 Index is making a top. My guess is
that it will fall 4-5% from its high, but it is always possible that a much
larger correction is in the offing. I am
actively short in my trading portfolio.
Long-term, I’m fully invested at 50% in stocks (a
conservative-retiree allocation – I don’t do short-term timing with retirement
money).
CURRENT RANKING OF 11 ETFs (Ranked Daily)*
#1 RANK for the past 45-days: Financial Select Sector
SPDR ETF (XLF).
#2 RANK: iShares Russell 2000 – Small Cap (IWM)
#3 RANK: iShares U.S. Aerospace and Defense ETF (ITA)
*For background on the ETF ranking system see NTSM Page
at…
6-MONTH ETF CHART
As can be seen from the above chart, the iShares Nasdaq
Biotechnology ETF (IBB) is making a strong move up. It is currently in 10th place so
it will have to prove the move before I can shift into the IBB. It has made big
moves in the past only to fall again.
TRADING PORTFOLIO - 2017 (Small-% of the total portfolio)
Rydex 2x Short S&P 500 (RYTPX): Established 6 Dec.
2x Short S&P 500 (SDS): Established 16 Dec.
Long Volatility ETN (VXX): Established 6 Jan 2017.
NET:
TUESDAY MARKET INTERNALS (NYSE DATA)
-10-day moving average of the percentage of stocks
advancing (NYSE): 54.5%. (54.0% prior trading-day.) A number above 50% is
usually BULLISH for the markets short-term.
-150-day moving average of advancing stocks: 52.3%. (A
value above 50% indicates a long-term, up-trend.)
-McClellan Oscillator: Rose from -1 to +33 (percentage
calculation method adjusted to fit McClellan’s values).
-New-highs minus new-lows: +81
(It was +60 prior trading day.)
-10-day moving average of the change in spread: +2. In
other words, over the last 10-days, on average, the spread has increased by 2
each day.
Market Internals
were 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 VIX & Volume indicators were neutral.
The Price indicator was 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.
