“After starting the year at the fastest pace in almost a
decade, existing-home sales slid in February but remained above year ago levels
both nationally and in all major regions, according to the National Association of Realtors. Total existing-home
sales1…retreated 3.7 percent..." Story at...
CRUDE INVENTORIES
Oil prices slipped on Wednesday to their lowest since
late November, with Brent testing the $50 per barrel support, after data showed
record high U.S. crude inventories rising faster than expected, raising doubts
over the viability of OPEC-led output cuts. The Energy Information
Administration (EIA) said U.S. inventories climbed almost 5 million barrels to
533.1 million last week…” Story at…
FUHGETTABOUTIT (Real Investment Advice)
“…the market is very close to a short-term ‘sell signal,’…from a very high level. Sell
signals instigated from high levels tend to lead to more substantive corrective
actions over the short-term. …“Are you ready for a 2,000 point drop in the Dow? That’s what a ‘normal’
correction would look like now. Normal corrections look kind of scary when
markets are at these highs.” – Lance Roberts. Commentary at…
THE BIG MONEY IS EYING THE EXIT (MarketWatch)
“I don’t want to alarm anyone, but the people managing
the world’s investments are getting extremely worried about the stock market. Institutional
investors with a collective half-trillion dollars under management now say that
global stocks are the most overvalued since 2000.” Story at…
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 was up about 0.2% to 2348.
-VIX rose about 3% to 12.81.
-The yield on the 10-year Treasury slipped to 2.404%.
Sentiment: Rather than buying the dip at the close
Tuesday, Rydex/Guggenheim investors shifted slightly more bearish. The 5-dMA of
%-Bulls slipped from 83% to 82%. The sentiment was highest (84%) 1-week after the S&P 500 high on 1
March. At the S&P high, the
sentiment was a benign 63%. It’s clear that the dip buyers did move in after
the high; now they may be shifting to the bear side. Sometimes the Rydex boys
are right so their bear shift is worth following, especially if it continues.
There was late-day buying today, but there was a catch.
Volume dropped late in the day so we’re left with suspicion that the buyers
were late-to-the party, dip-buyers. At best we can’t have too much confidence
in the late day action. For the day,
volume was about 5% below the monthly average.
Money Trend has turned down. My sum of 16-indicators went
from 0 yesterday to -6 today. The 10-day sum is flat though, so the trend is
not clear. Late-day action remains down.
New-lows outpaced new highs today. The Cyclical Industrial stocks (XLI)
are underperforming the S&P 500. All
of these signals are generally bearish.
The 10-dMA of %-stocks advancing climbed to 50.9%, but
the 20-day value was only 47.3% so there isn’t an all-clear signal. Further, we’d
expect to see internals improve on an up-day as they did today.
Bottom line: I don’t think we’ve made a bottom yet, but
it’s possible that a bottom may be near.
The Index is still roughly 1% above its 50-dMA and that’s a good support
point. It could easily go lower of
course – we’ll see.
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, but its slope is flatter over the past couple of days.
Utilities did well again today. Only Energy and
Financials were down. The Financials remain number one, but they are losing
momentum while ITA and XLK are gaining. Interest rates are slipping some and
that is bad for the Financials. If this correction really gets going XLF will not
do well while XLU will be the big winner, at least until the bottom of the
correction. XLF should recover after a pullback.
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)
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.
WEDNESDAY MARKET INTERNALS (NYSE DATA)
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).
LONG TERM INDICATOR
Wednesday, Sentiment was negative (Bullishness is at an
extreme.); Price, 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.
