PERSONAL INCOME/SPENDING (RTT News)
“Personal income in the U.S. increased by slightly less
than expected in the month of December, according to a report released by the
Commerce Department on Monday. The report said personal income rose by 0.3
percent in December…personal spending climbed by 0.5 percent…” Story at…
PCE PRICES (PERSONAL CONSUMPTION EXPENDITURES) (Reuters)
“In the 12 months through December the PCE price index
advanced 1.6 percent, the biggest increase since September 2014. That followed
a 1.4 percent increase in November. Excluding food and energy, the so-called
core PCE price index ticked up 0.1 percent…”
Story at…
My cmt: PCE is below the FED’s inflation target.
DALLAS FED MANUFACTURING (Advisor Perspectives)
“Texas factory activity increased for the seventh
consecutive month in January, according to business executives responding to
the Texas Manufacturing Outlook Survey.” – Dallas FED. Commentary on the report at…
JOHN HUSSMAN, PHD (Hussman Funds)
John Hussman notes that the reducing Corporate Taxes may
not be the panacea that many bulls on Wall Street are expecting…
“Presently, U.S. corporate taxes represent just over 4%
of corporate revenues. Historically, the lowest level outside of recession (and
the recent recovery) has been about 3%. From here, even moving to the lowest
effective U.S. corporate tax rates in history would boost corporate profit
margins by scarcely 1%...” - John Hussman, PhD.
See Weekly Market Commentary at…
OFF TOPIC – INTERESTING COMMENTARY ON IMMIGRATION &
TRUMP FROM SCOTT ADAMS
MARKET REPORT / ANALYSIS
-Monday the S&P 500 slipped about 0.6% to 2281.
-VIX rose about 12% to 11.88
-The yield on the 10-year Treasury rose to 2.489%.
Monday was a statistically significant day and that means
that volatility exceeded my statistical parameters and, in about 60% of the
time, that leads to an up-day the next day (Tuesday). This same indicator can also suggest panic
and more selling ahead when it occurs near a channel top as we have now. It’s probably
overstating conditions to call today a panic; but further downside is likely in
the near term.
SENTIMENT remains a negative.
“…a potential “red flag’ comes from last week’s AAII
bullish sentiment figures, which showed that bullish sentiment fell by roughly
five points (37.01% to 31.58%) for the second five-point decline in the last
two weeks (chart 3 on page 4). That has not happened since May 2016 right
before the S&P 500 (SPX/2294.69) fell 6.0%.” - Jeffrey Saut, Chief
Investment Strategist, Raymond James. Commentary at…
Similarly, over the last 3-days my sentiment indicator
has fallen from 75%-bulls to 68%-bulls and that’s a huge move for the 5-day
moving average.
The sum of my 16-indicators dropped from +8 to 0 on the
day as the negative day pulled them down. The 10-day value slipped too. There has been a back and forth with
indicators recently. Most significantly, late day action is leaning bullish and
it suggests the Pros are buying the dip. On the other side, low market-volatility
still indicates trouble ahead. We’ll see which side wins out soon.
My opinion hasn’t changed; 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 58-days: Financial Select Sector
SPDR ETF (XLF).
Here’s Friday’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.
NET:
Now I wish I had tightened trading rules sooner. I am
underwater again!
MONDAY MARKET INTERNALS (NYSE DATA)
-10-day moving average of the percentage of stocks
advancing (NYSE): 50.2%. (53.5% prior trading-day.) A number above 50% is
usually BULLISH for the markets short-term.
-150-day moving average of advancing stocks: 52.7%. (A
value above 50% indicates a long-term, up-trend.)
-McClellan Oscillator: Dropped from +10 to -62
(percentage calculation method adjusted to fit McClellan’s values).
-New-highs minus new-lows: +17
(It was +109 prior trading day.)
-10-day moving average of the change in spread: -11. In
other words, over the last 10-days, on average, the spread has decreased by 11
each day.
Market Internals switched
to Negative 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
Monday, the Sentiment, VIX & Volume indicators were
neutral. The Price indicator was positive.
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.
