Wednesday, February 1, 2017

FOMC Rate Decision … ADP Employment … ISM Index … Auto sales … Stock Market Analysis … ETF Ranking

“As widely expected, the Federal Open Market Committee — the central bank's policy making arm — kept its benchmark overnight lending rate target at a range of 0.5 percent to 0.75 percent.” Story at…
“U.S. private employers added 246,000 jobs in January, above economists' expectations, a report by a payrolls processor showed on Wednesday.” Story at…
ISM INDEX (MarketWatch)
“American manufacturers grew in January at the fastest pace in more than two years and many executives said the outlook “looks stronger” at the start of the 2017. The Institute for Supply Management said its manufacturing index climbed to 56%...” Story at… 
Mt cmt: The full ISM report noted that respondents indicated that both the economy and manufacturing were growing faster. Read the press release here…
“U.S. auto sales lagged in January as buyers recovered from holiday spending sprees, but the slowdown won't last long…General Motors Co.'s sales fell 3.8 percent…” Story at…
-Wednesday the S&P 500 was essentially unchanged (up 1-pt when rounded) to 2280.
-VIX dipped about 2% to 11.81
-The yield on the 10-year Treasury rose to 2.477%.
Money Trend is definitely headed sharply down; Smart Money (late-day action) remains mixed; and the daily sum of indicators turned slightly more bullish as it moved up to +3. The smoothed version of the sum of 16-indicators takes out daily volatility and it remained heading down.
As I’ve said for a while, I think the upside potential is limited while the downside risk is fairly high, at least for a short-term pullback. I remain a short-term bear; Long-term I am a Bull.
CURRENT RANKING OF 11 ETFs (Ranked Daily)*
#1 RANK for the past 60-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!
“In a bull market, you can only be long or neutral.” – D. Gartman
(I am beginning to agree with Dennis.)
-10-day moving average of the percentage of stocks advancing (NYSE): 51.5%. (52.1% 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: Improved from -23 to -34 (percentage calculation method adjusted to fit McClellan’s values).
-New-highs minus new-lows: +141 (It was +53 prior trading day.)
-10-day moving average of the change in spread: +8. In other words, over the last 10-days, on average, the spread has increased by 8 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). 
Wednesday, 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.