Friday, April 28, 2017

GDP – Advance ... Chicago PMI … Michigan Sentiment … A-D Lines are Bullish … Market Analysis … Trading ETFs and ETF Ranking

GDP (Marketwatch)
“The government’s official scorecard for the U.S. economy in the first quarter pointed to the weakest growth in three years, but the slowdown appeared tied to temporary effects that are likely to give way a rebound in the coming months. Gross domestic product increased at a meager 0.7% annual pace in the first three months of the year…” Story at…
CHICAGO PMI (Advisor Perspectives)
“The latest report for Chicago PMI came in at 58.3, a 0.6 point increase from last month's 57.7. forecast 56.4… “The April Chicago report showcased another impressive month, with firms reporting solid growth. Rising demand and firm production led to a pick-up in hiring by firms. Although the employment indicator has been bumpy, in and out of contraction, if the current month’s rise is sustained, it could provide a boost to the labor market,” said Shaily Mittal, senior economist at MNI Indicators.” Analysis at…
“Household sentiment was little changed in April from the previous month, holding at an elevated level on optimism about personal finances, University of Michigan survey data showed.” Story at…
A-D LINES ARE BULLISH (McClellan Financial Publications)
“Just recently, the overall NYSE A-D Line moved to a new all-time high, saying that liquidity is plentiful and it should lift the overall stock market. The same message comes from this High Yield Bond A-D Line, which has also pushed ahead to a new all-time high. The message is that liquidity is so plentiful that even junk bonds can go higher. And history shows that such plentiful liquidity is also beneficial for the overall stock market.” - Tom McClellan. Commentary at…
-Friday the S&P 500 was down about 0.2% to 2384. 
-VIX rose about 4% to 10.82 at the close.
-The yield on the 10-year Treasury dipped to 2.282%.
Not much changed today. Mostly bullish signs continue:
-My Sum of 16-Indicators was at +8 today vs. +6 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; that’s bullish too.
-Bollinger Bands (2-std deviations above and below the S&P 500 Index) were not overbought today as the upper-band has moved up.
The Late-day action (Smart Money) was up today and is moving up over the last month. That’s mildly bullish. Sentiment remains high, but it is creeping down hinting that this rally may continue. (My Sentiment value in the long-term NTSM indicator remains bearish, but that is because there is a rule that extends a negative indication for about a week. Sentiment, by itself, is not a good timing indicator anyway.)
One brown shoot…
The Overbought/Oversold Index remains “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). 
Friday, 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.