Friday, April 21, 2017

Home Sales … Stock Market Analysis … Trading ETFs and ETF Ranking

HOME SALES (Reuters)
“U.S. home re-sales rose more than expected in March to the highest level in more than a decade as more homes came on the market and were quickly snapped up by consumers. The National Association of Realtors said on Friday that existing home sales increased 4.4 percent…” Story at…
-Friday the S&P 500 dipped about 0.3% to 2349. 
-VIX rose about 3% to 14.63 at the close.
-The yield on the 10-year Treasury rose slightly to 2.248%.
Indicators are mostly flat or mixed. My Sum of 16-Indicators is zero, a neutral value.  Even the Late-day action is now flat, but the recent trend has been down, so we’ll see.
At this point the chart remains the key.  I’ve moved my red-line up to align with the statistically-significant day Thursday.  That’s in-line with the others earlier in March and is now the same as the 50-dMA shown in green. The Index failed to break thru yesterday and again today. To break this down-trend, it needs to close 3% above the red line or close higher on 2-consercutive days. So far – the down-trend (albeit small) remains intact. I read a piece that said a break of the 50-day implied 3 months of sideways movement based on past instances.  The odds may favor sideways action; but a bigger correction is possible.
As far as a near-term correction, the jury is still out.  I’m leaning “Bear” but I have been wrong a lot on short-term calls recently.
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 XLE; its 120-dMA is now trending down.
No1 is Technology (XLK).
SHORT-TERM TRADING PORTFOLIO - 2017 (Small-% of the total portfolio)
Rydex Inverse 2x Nasdaq 100. Established 4/13/2017.
VXX. Established 4/13/2017.
This pullback could be over quickly (or already) so these positions will not be held long if the market closes above the upper downtrend line.
Market Internals turned 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). 
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.