Sunday, January 29, 2017

Stock Market Analysis … ETF Ranking

Here are numbers for Friday:
-Friday the S&P 500 slipped about 0.1% to 2295.
-VIX dropped about 0.5% to 10.58
-The yield on the 10-year Treasury dipped to 2.484%.
Short-term indicators were slightly higher Friday, but not all indicators agreed. At the close, Market Internals were again neutral (not positive as they had looked before Friday’s close.) This puts slightly more bearish spin on Friday’s numbers, but there is not much to tell at this point – the market is churning. Pretty soon it’s going to break and I think the likely direction will be down.
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 57-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.  
Now I wish I had tightened trading rules sooner. I am underwater again!
-10-day moving average of the percentage of stocks advancing (NYSE): 53.5%. (55.1% prior trading-day.) A number above 50% is usually BULLISH for the markets short-term.
-150-day moving average of advancing stocks: 52.6%. (A value above 50% indicates a long-term, up-trend.)
-McClellan Oscillator: Rose from +48 to +10 (percentage calculation method adjusted to fit McClellan’s values).
-New-highs minus new-lows: +109 (It was +253 prior trading day.)
-10-day moving average of the change in spread: +5. In other words, over the last 10-days, on average, the spread has increased by 5 each day.
Market Internals remained 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). 
Friday, 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.