“U.S. consumer prices rebounded in April amid increases
in the cost of gasoline, food and rents, pointing to steadily rising inflation
that could keep the Federal Reserve on track to raise interest rates next
month. The Labor Department said on Friday its Consumer Price Index rose 0.2
percent…” Story at…
RETAIL SALES (Bloomberg)
“A pickup in U.S. retail sales last month adds to signs
of steady consumer spending that will help propel the economy after a
first-quarter slowdown, Commerce Department data showed Friday. Purchases rose
0.4% (forecast was 0.6% rise) after a 0.1% increase the prior month (revised
from 0.2% decline)…” Story at…
MICHIGAN SENTIMENT (MarketWatch)
“Consumer sentiment brightened in an early May reading as
Americans turned more bullish on their income expectations. The University of
Michigan’s closely-watched confidence gauge jumped to 97.7 from 97.0 in April.”
Story at…
PORT OF VIRGINIA VOLUMES UP (VPA)
“The Port of Virginia® moved 225,196 twenty-foot
equivalent units (TEUs) [containers for us civilians] in April, which is growth
of 4.6 percent when compared with the same month last year. The port has
handled at least 220,000 TEUs every month since October 2016.” Press release
at…
My cmt: No recession here.
VALUATION (The Felder report)
Ruh-roh…
Chart and commentary at…
My cmt: Now, Buffet isn’t worried…this time is different?
Obamacare has been a drag on the economy…
OBAMACARE’S 49% PRICE HIKE IN 3-YEARS (CNBC)
“Premiums for plans covering families increased even
higher in 2017 — 20 percent higher than the prior year. The average for
families selecting plans was $997 per month this year, which is 49 percent
higher than in 2014, eHealth said.
The average deductible for a family plan sold on eHealth
is now $8,322. In 2017, the average premium for a plan covering a family of
four is more than $14,300 annually — or $1,195 per month…” Story at…
My cmt: I have a friend who got caught in this trap. He
retired early after calculating all expenses and adding a contingency for
health care. It wasn’t enough. He has
little faith that the Republicans will come up with anything better. To me, the
idea that one can buy insurance after you get sick (with no penalty for
pre-existing condition) is untenable.
Could you buy car insurance after an accident? Such a system isn’t
economically workable – only the idiots in congress could come up with such a
plan. As a famous man once said…
“The American Republic will endure until the day Congress
discovers that it can bribe the public with the public's money.” - Alexis de
Tocqueville (1805-1859).
Tax-and-spend Democrats or cut-tax and spend Republicans;
pick your poison.
As a teenager, I'd get frustrated by people who I thought
were not smart, and my father told me, "Son, don't ever get frustrated by
stupid people. Being mad at stupidity is like being mad at grass - it's
everywhere." – James Carville.
(Since the Congress is getting away with this insanity, I
guess we voters are the stupid people.)
MARKET REPORT / ANALYSIS
-Friday the S&P 500 fell about 0.2% to 2391.
-VIX dropped about 2% to 10.40 at the close. (The options
boys aren’t worried.)
-The yield on the 10-year Treasury slipped to 2.324%. (The
Bond Ghouls are.)
Bear signs:
-RSI was 81 Tuesday signaling overbought.
-The percentage-of-stocks-advancing over the past 10-days
rose to 49.3% today; that means that most stocks on the NYSE have gone down in
the last 10-days, but this stat isn’t accelerating down. It’s not very bearish.
-My Sum of 17–indicators improved from -3 to -1 on the
day, but the 10-day value is still headed sharply down.
-New-high/new-low data is bearish.
Neutral signs:
-Market Internals improved to neutral today, because up-volume
(smoothed 10-day value) improved.
Bull signs:
One of the few bullish indicators I follow is late-day
action. It is headed up on a smoothed 20-day basis. I place a high value on
late-day action since it usually indicates what the Pros think. Apparently, they think this market can go
higher.
Overall, indicators are slightly bearish, but there isn’t
an acceleration of bear signs. I am neutral short-term and cautiously bullish
long term. That short-term neutral may change soon depending on market action.
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…
I would avoid XLE; its 120-day moving average is falling.
No.1 remains Technology (XLK). I continue to hold the
XLK.
“At each
major market peak throughout history, there has always been something that
became “the” subject of speculative investment. Rather
it was railroads, real estate, emerging markets, technology stocks or tulip
bulbs, the end result was always the same as the rush to get into those markets
also led to the rush to get out. Today, the rush to buy “ETF’s” has clearly
taken that mantle…” – Lance Roberts. Commentary at…
SHORT-TERM TRADING PORTFOLIO - 2017 (Small-% of the
total portfolio)
No positions. I would take profits on long positions now
and watch the market for confirmation, either direction.
-“In a
bull market, you can only be long or neutral.” – D. Gartman
-“The best policy
is to avoid shorting unless a major bear market is underway and downside
momentum has been thoroughly established. Even then, your timing must sometimes
be perfect. In a bull market the trend is truly your friend, and trading
against the grain is usually a fool's errand.” – Clif Droke.
I haven’t done well in my short positions over the past
6-months; conversely, I have a decent record in long positions.
FRIDAY 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
Friday, Price was positive; Sentiment, Volume & VIX
indicators were neutral. (With VIX
recently below 10, VIX may be prone to incorrect signals. Usually, a rising VIX
is a bad market sign; now it may just signal normalization of VIX, i.e., VIX
and the Index may both rise. As an indicator, VIX is out of the picture for a
while.)
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, but I consider it fully invested.
