Thursday, February 2, 2017

Unemployment Claims … Productivity … Stock Market Analysis … ETF Ranking

“Fewer Americans applied for unemployment benefits last week, another sign that U.S. workers are enjoying job security…The Labor Department said Thursday that claims for jobless aid fell by 14,000 last week to a seasonally adjusted 246,000.” Story at…
“U.S. worker productivity slowed in the fourth quarter, leading to the smallest annual increase in five years. The Labor Department said on Thursday that nonfarm productivity, which measures hourly output per worker, rose at a 1.3 percent annual rate.” Story at… 
-Thursday the S&P 500 was up 1-pt to 2281.
-VIX rose about 1% to 11.93
-The yield on the 10-year Treasury was unchanged at 2.474%.
A couple of indicators: Money Trend remains 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 +4. The smoothed version of the sum of 16-indicators takes out daily volatility and it was flat.
Overall though, indicators improved and the Market Internals turned positive. I am a skeptic; there are enough negative indicators to remain worried.
Repeating: 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 61-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, but they have been improving recently.
*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): 55.9%. (51.5% prior trading-day.) A number above 50% is usually BULLISH for the markets short-term.
-150-day moving average of advancing stocks: 52.5%. (A value above 50% indicates a long-term, up-trend.)
-McClellan Oscillator: Improved from -34 to -24 (percentage calculation method adjusted to fit McClellan’s values).
-New-highs minus new-lows: +90 (It was +141 prior trading day.)
-10-day moving average of the change in spread: +3. In other words, over the last 10-days, on average, the spread has increased by 3 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). 
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.