U.S. employers posted more open positions in February,
but the number of people getting hired and the number quitting jobs fell. The
overall figures suggest that the job market remains healthy…” Story at…
BULL CASE (CNBC)
"The end of the cycle is often the best," he
[Morgan Stanley's Michael Wilson] added. "Think 1999 or 2006-07. In a
low-return world, investors cannot afford to miss it."...Wilson has laid
out a "bull case" for stocks that calls for the S&P 500 index to reach 3,000 points within 12
months, representing a gain of almost 30 percent.
…or the bear case below…
CORRECTION COMING (CNBC)
“Trader Kenny Polcari, director at O'Neil Securities,
said stocks have been resilient lately but may be headed for a
correction…."It's a seasonality thing. If you look back the last four or
five years, after tax day the market kind of pulls itself back, corrects a
little bit, churns before it starts to move again," Polcari told
"Closing Bell." Story at…
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 dipped about 0.1% to 2354.
-VIX rose about 7% to 15.07 at the close.
-The yield on the 10-year Treasury slipped to 2.297%.
Let’s call today’s market, “David and Goliath: Goliath
loses again.” The S&P 500 is slowly falling, but the rest of the market
remains in better shape. The big winner
today was the S&P Small Cap 600 followed by the Russel 2000 and the Mid Cap
400. The small caps were clearly killing
the big boys. (The Dow was down too.) Usually, the small caps lead after a
bottom so one wonders whether the predicted correction has been cancelled. I’d
say the jury is still out.
From Barrons
“Changes big and small are afoot, with an emphasis on
small for the moment. Finally, small-cap stocks are getting their day in the
sun. After years of being overshadowed by large multinational companies, smaller
companies will, over the next 12 months, be the biggest beneficiaries of the
economic climate and the policies topping President Donald Trump’s agenda,
wealth managers say.” Story at…
The Index is 0.2% above its 50-dMA. (I had a typo
yesterday because I incorrectly noted the Index was 0.4% above its 200-dMA.) If the Index breaks its
50-dMA it is likely to retest the prior low of 2142. The 50-dMA will be the
first test. We’ll need to keep waiting.
My Sum of 16 Indicators dropped from +2 to -5. That’s not
a great sign in the short run.
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…
1. Technology Select Sector SPDR ETF (XLK) remains the
top ranked ETF.
(I took positions in XLF and XLK Wednesday, 29 March.) My
guess is that XLF will rebound after a correction as the interest rates rise.
SHORT-TERM TRADING PORTFOLIO - 2017 (Small-% of the
total portfolio)
No positions.
Until the market makes a decision (up or down) there is no point in
guessing. Indicators remain mixed.
TUESDAY MARKET INTERNALS (NYSE DATA)
Market Internals
switched to 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
Tuesday, the Price indicator was positive; VIX indicator
was negative; Sentiment & Volume 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 50-dMA.
