Thursday, January 26, 2017

Jobless Claims … Leading Economic Indicators … Home sales … Stock Market Analysis … Rank Performance of ETFs

“The number of Americans who applied for unemployment benefits climbed by 22,000 to a one-month high of 259,000 in late January, but the level of layoffs remained extremely low.” Story at…
LEI (Conference Board)
“The Conference Board Leading Economic Index® (LEI) for the U.S. increased 0.5 percent in December to 124.6 (2010 = 100), following a 0.1 percent increase in November, and a 0.2 percent increase in October. "The U.S. Leading Economic Index increased in December, suggesting the economy will continue growing at a moderate pace, perhaps even accelerating slightly in the early months of this year," said Ataman Ozyildirim, Director of Business Cycles and Growth Research at The Conference Board.” Press release at…
HOME SALES (MarketWatch)
“Sales of newly constructed homes plunged in December as the housing market’s recovery sputtered. New-home sales declined to a seasonally adjusted annual rate of 536,000…” Story at…
-Thursday the S&P 500 slipped about 0.1% to 2297.
-VIX dropped about 0.4% to 10.77 near the close. (VIX hasn’t been this low since July of 2014. The lack of fear is making me afraid – a pullback seems likely, but I have been saying that for a month.)
-The yield on the 10-year Treasury dipped to 2.501%.
Short-term indicators continue to show that the market is stretched, but they have improved over the last week or so. Overall my opinion hasn’t changed; I think the upside potential is limited while the downside risk remains fairly high, at least for a short-term pullback. I remain a short-term bear and a long-term bull.
CURRENT RANKING OF 11 ETFs (Ranked Daily)*
#1 RANK for the past 56-days: Financial Select Sector SPDR ETF (XLF).
Here’s today’s complete result of the ETF Ranking.
I would avoid IBB and XLV; currently their 120-dMAs are declining.
*For background on the ETF ranking system see NTSM Page at…
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.  
Now I wish I had tightened trading rules sooner. I am underwater again!
-10-day moving average of the percentage of stocks advancing (NYSE): 53.1%. (55.3% prior trading-day.) A number above 50% is usually BULLISH for the markets short-term.
-150-day moving average of advancing stocks: 52.8%. (A value above 50% indicates a long-term, up-trend.)
-McClellan Oscillator: Rose from +74 to +44 (percentage calculation method adjusted to fit McClellan’s values).
-New-highs minus new-lows: +253 (It was +320 prior trading day.)
-10-day moving average of the change in spread: +15. In other words, over the last 10-days, on average, the spread has increased by 15 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). 
Thursday, the Sentiment, VIX & Volume indicators were neutral. The Price indicator was positive.
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.