Friday, February 10, 2017
Michigan Sentiment …New-Highs Low at the All-Time High … Stock Market Analysis … ETF Ranking
MICHIGAN SENTIMENT (Bloomberg)
“Consumer confidence retreated in February from a 13-year high, as Americans tempered expectations of their finances and the economy. The University of Michigan said Friday that its preliminary index of sentiment cooled to a three-month low of 95.7 from 98.5 in January.” Story at…
LOW 52-WEEK HIGHS AT ALL-TIME HIGH
7.3% of securities on the NYSE made 52-week highs at the all-time high Friday. That is not a great number at an all-time high. The average value at the 15 major all-time highs (2007, 2000, etc.) going back to 1929 was 6%. 6.5% of issues made a new high at the 2007 top. All were less than 11%. But never mind; this market is going up - BULLISH.
LOW QQQ VOLUME A SIGN OF A TOP (Financial Sense)
“When investors get complacent, they do certain things. They show up as bullish in the various surveys. They bid tiny premiums on options, driving down the VIX. They put all of their cash to work, letting money market fund levels get down really low. And they trade tiny volumes on QQQ.” – Tom McClellan. Commentary at…
My cmt: But never mind this opinion; it’s time to be BULLISH!
MARKET REPORT / ANALYSIS
-Friday the S&P 500 was up about 0.4% to 2316.
-VIX fell about 0.4% to 10.84
-The yield on the 10-year Treasury rose to 2.407%. (Since the yield is an inverse to price, this means investors were selling Treasuries.)
I’m tired of stating the facts on market-based indicators that have signaled trouble in the past. The Market is overextended, but NEVER MIND; stocks appear that they will keep going up forever. I am now a strong bull. Don’t believe everything you read.
Broken Record Report:
OK. I’m only BULLISH for the Wall Street trolling computers. As I’ve said for a while, I think the upside potential is limited while the downside risk is fairly high. Long-term I am a Bull until proven otherwise.
CURRENT RANKING OF 11 ETFs (Ranked Daily)*
#1 RANK for the past 67-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
-“The best policy is to avoid shorting unless a major bear market is underway and downside momentum has been thoroughly established. Even then, your timing must sometimes be perfect. In a bull market the trend is truly your friend, and trading against the grain is usually a fool's errand.” – Clif Droke. Commentary at…
OK, OK. I’ll be more prudent next time.
FRIDAY MARKET INTERNALS (NYSE DATA)
-10-day moving average of the percentage of stocks advancing (NYSE): 55.4%. (52.5% prior trading-day.) A number above 50% is usually BULLISH for the markets short-term.
-150-day moving average of advancing stocks: 52.4%. (A value above 50% indicates a long-term, up-trend.)
-McClellan Oscillator: Improved from +33 to +83 (percentage calculation method adjusted to fit McClellan’s values).
-New-highs minus new-lows: +216 (It was +157 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 increased by 11 each day.
Market Internals switched to 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
Friday, Sentiment was negative. VIX & Volume indicators were neutral. The Price indicator was positive.
MY INVESTED STOCK POSITION:
TSP (RETIREMENT ACCOUNT – GOV EMPLOYEES) ALLOCATIONI 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.