“Consumer borrowing rose $14.2 billion in December, well
below Wall Street expectations, as credit-card use increased at a much slower
pace that in the prior month.” Story at…
GDP-NOW (Atlanta Federal Reserve)
“The GDPNow model forecast for real GDP growth
(seasonally adjusted annual rate) in the first quarter of 2017 is 1.3
percent on March
7, down from 1.8 percent on March 1.
The forecasts for first-quarter real personal consumption
expenditures growth and real nonresidential equipment investment growth fell
from 2.1 percent and 9.1 percent, respectively, to 1.8 percent and 7.3 percent,
respectively, after Thursday's motor vehicles sales release from the U.S.
Bureau of Economic Analysis. The forecast of the contribution of inventory
investment to first-quarter growth fell from -0.50 percentage points to -0.72
percentage points after yesterday's manufacturing report from the U.S. Census
Bureau.” For more see…
My cmt: What the…? We’ll have to see how the GDP numbers
play out. There is a lot of variability
in these guesses; yes, in my opinion the FED is just making an educated guess.
I have no idea if this will influence FED thinking regarding future rate hikes. They have already signaled a hike in March.
See the chart below for the historical chart of Fed Funds.
Chart from RIA at…
MONEY POURING INTO ETFs (SafeHaven)
"All of the money is going into the cheapest and
most boring ETFs. This is the retail investor getting back into the market with
a vengeance," said Dave Nadig, chief executive of ETF.com, an industry
website owned by Bats Global Markets, newly a subsidiary of CBOE Holdings
Inc…Why is this a sign of a market top? Because small investors tend to trade
on emotion rather than logic or expertise.” – John Rubino. Commentary at…
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 was down about 0.3% to 2368.
-VIX rose about 3% to 11.44.
-The yield on the 10-year Treasury rose to 2.516%.
There has been some pretty serious deterioration in the
market over the last 10-days even though it is not yet reflected in the S&P
500 price. The %-of stocks advancing is falling sharply and now sits at just 45%. In other words, only 45% of stocks have
advanced over the last 10-days – the majority have gone down. Up-volume shows a similar weakness. Only 42%
of volume has been up over the last 10-days and its chart is falling sharply
too. New-high/new-low data looks the
worst as its chart is in free-fall with new-lows outpacing new-highs. All of these measures indicate a stock market
that is in denial. The little guys are
failing, but the S&P 500 and DJI have not yet caught on. In this case, the
divergence is not healthy. For the future, the most likely direction for stocks
remains down
The sum of my 16-indicators slipped from -5 Monday to -6
Tuesday. Money Trend is still pointing down. The Pros are still selling based
on Late-day action that has been trending down on average over the last month,
and that trend continued today with another late-day collapse.
Overall there has been a bearish bent to the data
recently and it has been getting more bearish each day.
CURRENT RANKING OF 15 ETFs (Ranked Daily)
The top ranked ETF receives 100%. The rest are then
ranked based on their momentum relative to the leading ETF. While momentum isn’t stock performance per
se, momentum is closely related to stock performance. For example, over the 4-months
from Oct thru mid-February 2016, the number 1 ranked Financials (XLF) outperformed
the S&P 500 by nearly 20%.
*For additional background on the ETF ranking system see
NTSM Page at…
I would avoid iEAFE (Europe and Far East); currently its
120-dMA is declining.
Recommended ETF Portfolio of top 3:
1. Financial Select Sector SPDR (XLF)
2. iShares U.S. Aerospace & Defense (ITA)
3. Technology Select Sector SPDR ETF (XLK)
XLI was slightly ahead of the XLK, but not enough to
change the recommendation. Further, if
there is a correction, XLI is likely to be among the worst performers.
I have not yet established a position based on the ETF
Ranking; I am waiting for a better entry point.
SHORT-TERM 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!
-“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.
“There are two kinds of forecasters. Those who
don’t know, and those who don’t know they don’t know.”- John Kenneth Galbraith.
TUESDAY MARKET INTERNALS (NYSE DATA)
Market Internals
declined 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
Tuesday, Price was positive; Sentiment Volume & VIX
indicators were neutral.
MY INVESTED STOCK POSITION:
TSP (RETIREMENT ACCOUNT – GOV EMPLOYEES) ALLOCATION
I reduced stock allocation to 25% stocks in the
S&P 500 Index fund (C-Fund) Wednesday, 1 March 2017 in my long-term
accounts.
Remainder is 75% G-Fund (Government securities). This is a conservative retiree
allocation based mostly on short-term signals.
