Thursday, April 27, 2017

Durable Orders … Unemployment Claims … Home Sales … CASS Freight Index … Market Analysis … Trading ETFs and ETF Ranking

“Orders for durable goods rose less than forecast in March as demand for automobiles, fabricated-metal products and machinery all declined, Commerce Department data showed Thursday…Bookings for goods meant to last at least three years rose 0.7 percent…” Story at…
“More Americans filed for unemployment benefits last week, but applications remained at a low level that suggests most workers enjoy job security…The Labor Department says weekly jobless claims rose by 14,000 to 257,000…” Story at…
HOME SALES (Fox Business)
“Pending home sales fell 0.8% from a month earlier to an index of 111.4, the trade group National Association of Realtors said Thursday.” Story at…
CASS FREIGHT INDEX – March Report (CASS Information Systems)
“Both the Shipments and Expenditures Indexes have now been positive for three months in a row. Throughout the U.S. economy, there are a growing number of data points suggesting that the economy is getting better.” Press release at…
My cmt: The report noted that year-over-year Shipments are up 0.9% and Expenditures are up 3%.
-Thursday the S&P 500 was up about 0.06% to 2389. 
-VIX dropped about 5% to 10.36 at the close.
-The yield on the 10-year Treasury dipped to 2.297%.
Thursday, advancing stocks were even with declining stocks; only 39% of volume was up-volume; but there were 264-new-highs with only 25-new lows - overall a neutral day. Oil was down more than 1% and that usually puts pressure on the S&P 500. There may be some angst as the Index approaches the prior high of 2396. Today’s close is 0.3% below the all-time high. It didn’t bother the Nasdaq though; the Nasdaq Composite was up nearly 0.4%.
Mostly bullish signs continue:
-My Sum of 16-Indicators was unchanged at +6 today; down slightly from +7 yesterday. Longer term the indicators continue to improve. Market Internals look good and new-high/new-low data remains bullish.
-Money Trend is still moving sharply up – bullish too.
-Bollinger Bands (2-std deviations above and below the S&P 500 Index) were not overbought today as the upper-band moved up.
One brown shoot…
The Overbought/Oversold Index is “overbought” today. It is based on the number of stocks advancing over the last 10-days.
I remain bullish short-term and cautiously bullish longer term.
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…
No1 is Technology (XLK).
SHORT-TERM TRADING PORTFOLIO - 2017 (Small-% of the total portfolio)
No positions.
I was shellacked in recent trades so no short-term trading for a while.  Long is the call now though, as it has been since the Index closed above the 50-dMA.
Market Internals are 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, Sentiment was negative; Price was positive; Volume & VIX indicators were neutral.
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.
There have been no long-term Buy or Sell signals in a while.  The last signal was a BUY on 23 February and the last actionable signal was a BUY (from a prior sell) on 15 November 2016.