Friday, April 7, 2017

Jobs Report … Avg Hourly Earnings … Wholesale Inventories … Stock Market Analysis … Recession? Fahgetttaboudit. … Trading ETFs and ETF Ranking

“The economy added 98,000 jobs in March, knocking the unemployment rate down to 4.5 percent, according to data released by the Department of Labor Friday.” Story at…
My cmt: 98,000 jobs is a huge miss and far below last month’s 200+ jobs report.
AVG HOURLY EARNINGS (Business Insider)
“According to the February jobs report, average hourly earnings grew by 2.8% from the prior year, well above the disappointing 2.5% rate in January…” Story at…
“U.S. wholesale inventories increased as previously estimated in February, but the pace of inventory accumulation appears to have slowed relative to the fourth quarter. The Commerce Department said on Friday wholesale inventories rose 0.4 percent after falling 0.2 percent in January.” Story at…
My cmt: This should help the GDP calculation for the 1st Quarter.
“If history is a guide, the current ratios of weekly claims to the labor force contradict the minority view that the US is bordering on recession. Instead, the ratios suggest that even a near-term recession would be many months in the future.” – Jill Mislinski. Advisor Perspectives at…
-Friday the S&P 500 dipped about 0.1% to 2356.
-VIX rose about 3% to 12.80 near the close.
-The yield on the 10-year Treasury rose to 2.381%.
Most indicators are trending up.  There are a few naysayers though, and they’re important ones.  New-highs are trending down; and Up-volume is now trending down.  Neither if these facts are encouraging. Today’s close didn’t garner much optimism either as (for the most part) the Index fell from 2Pm thru the close.
But overall the market tug-of-war continues with mixed indicators and a chart that hasn’t yet resolved itself – are we going up or down? It looks like we will have a longer wait.”
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…
Utilities (XLU) was the biggest loser on the day, probably due to the rise in interest rates that make the utilities less desirable to own.
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.
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). 
Friday, the Price indicator is positive; Sentiment, 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 based mostly on low volume at the test of the 50-dMA.
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.