Tuesday, June 6, 2017

JOLTS – Job Openings … Market Analysis … Trading ETFs and ETF Ranking

JOLTS (MarketWatch)
“The number of job openings in the United States rose in April to a record high, but the pace of hiring slipped to a one-year low in another sign the economy is running out of people with enough skills to fill empty positions.” Story at…
-Tuesday the S&P 500 dropped about 0.3% to 2429.
-VIX rose about 4% to 10.45.
-The yield on the 10-year Treasury slipped to 2.15%.
Late-day action was pretty bad today as the S&P 500 dropped from the high of the day to very nearly the low for the day. One of the most telling indicators is to watch late-day action.  That’s when the Pros trade.  Currently, late day action is turning down sharply and that’s a bearish sign for the near term. It could turn around tomorrow, but for now the most likely direction for the Index is down.
Market Internals remained neutral on the market, but they deteriorated. 
Repeating prior notes: Overall, I think the short-term performance is somewhat limited; markets can go higher, but perhaps not too much higher before we move back at least a couple percent. Longer term, I remain cautiously bullish; I may worry late-summer and into early fall.
TODAY’S 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…
Technology (XLK) remains No 1. I would avoid XLE & XLF; their 120-day moving averages are falling.  Utilities are 2nd and that suggests investors are looking for some safety.
SHORT-TERM TRADING PORTFOLIO - 2017 (Small-% of the total portfolio)
Neutral with no positions recommended. - 5/24/2017 thru present.
-“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.
-“Commandment #1: “Thou Shall Not Trade Against the Trend.” - James P. Arthur Huprich
Market Internals remained 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). 
Tuesday, Price was bullish; Volume, Sentiment & 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.)
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 for my situation.
The previous signal was a BUY on 2 June and the last actionable signal was a BUY (from a prior sell) on 15 November 2016.