“The U.S. goods trade deficit narrowed sharply in
February, and inventories increased, which could prompt economists to raise
their estimates for first-quarter gross domestic product.”
Story at…
CONSUMER CONFIDENCE (Bloomberg)
“Consumer confidence jumped in March to the highest level
in more than 16 years, as Americans grew increasingly upbeat about both present
and future conditions, according to a report Tuesday from the New York-based
Conference Board…[The] Confidence index rose to 125.6…” Story at…
TIME TO TURN BULLISH (Marketwatch)
“After striking our longer-term target for this segment of
the bull-run that we were expecting in early November 2016, we have been
preparing for a pullback. For the past few weeks, we have been looking for the
S&P 500 to drop to the 2,335 region. The market obliged last week, and
now we may be setting up for a reversal.” – Avi Gilburt. Story at...
My cmt: Avi Gilburt is calling for a high of 2500 before a major correction takes hold.
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 was up about 0.7% to 2342 2359.
-VIX slipped about 8% to 11.53.
-The yield on the 10-year Treasury rose to 2.417%. (Traders
sold bonds and bought stocks.)
The S&P 500 visited its 21 March low of 2344 3-times
while volume was drastically reduced from the low. This suggested that selling
was drying up. I am not a fan of using
these techniques on a drop of only 2.3% from the top. They just aren’t reliable for small downturns;
but the multiple tests, lower volume, improving internals and price action (that
has included lower opens followed by afternoon recoveries) has been
encouraging.
Further, the Index has bounced from around its 50-dMA a
couple of times on an intra-day basis and closed higher each day; that is
another sign that the pullback has been postponed…again. Surprisingly (because no-one believes it, including me) the
market seems to want to go higher. How much higher? I’m not even going to guess
– but I’ll take what the market gives.
Friday, I moved back in at a fully invested 50% in stocks
position in long-term accounts and pared my short positions. Today, I closed all
shorts.
A quick run-down of indicators:
-Money Trend reversed up with a strong move. - Bullish
-My “SUM of 16-Indicators” made a very bullish moved from
-9 yesterday to +4 today.
-Smart Money (late day action) is flat (neutral), but it
had been trending down so this indicator has improved too.
-Breadth is strong with 55.9% of stocks on the NYSE
advancing over the past 10-days. It’s actually a bit too strong as the
Advance-Decline Ratio is now “overbought”.
-Market Internals are now bullish.
-The cyclical industrials have been underperforming the
S&P 500 on every time frame for nearly 2-weeks, but today they improved
enough to be outperforming on a 10-day basis. That’s bullish. Cyclicals suffer
when investors are worried.
All in all – up we go.
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) & XLE;
currently their 120-dMAs are declining. The Financials remain number one; today
they were up 1.3% so they liked that Bond-yields reversed upward today (another
positive sign for stocks).
Recommended ETF Portfolio of top 3:
1. Financial Select Sector SPDR (XLF)
2. Technology Select Sector SPDR ETF (XLK)
3. iShares U.S. Aerospace & Defense (ITA) 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)
I closed all remaining short positions on 3/28/2017. My losses were big enough that I am too
embarrassed to list them here.
-“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
turned 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
Tuesday, Sentiment was negative (Bullishness is at an
extreme.); Price was positive; Volume & VIX indicators were neutral.
MY INVESTED STOCK POSITION:
TSP (RETIREMENT ACCOUNT – GOV EMPLOYEES) ALLOCATION
I increased
stock allocation to 50% stocks in the S&P 500 Index fund (C-Fund) Friday, 24
March 2017 in my long-term accounts, based on short-term indicators.
Remainder is 50% G-Fund (Government securities). This is a conservative retiree
allocation based mostly on low volume at the test of the recent bottom.
