“Americans curtailed their shopping in June, with less
spending at restaurants, department stores and gasoline stations. The spending
pullback came despite a healthy job market and suggests that economic growth
may remain sluggish.
Retail sales fell 0.2% after declining 0.1% in May…”
Story at…
CPI (CNBC)
“U.S. consumer prices were unchanged in June as the cost
of gasoline and mobile phone services declined further, pointing to benign
inflation that could cast doubts on the Federal Reserve's ability
to increase interest rates for a third time this year.” Story at…
INDUSTRIAL PRODUCTION (MarketWatch)
“Industrial production rose for a fifth month in June,
helped by the recovering oil and gas sector, according to data released Friday.
Industrial production rose 0.4% in June…” Story at…
MICHIGAN SENTIMENT (Bloomberg)
“Weaker expectations about personal finances helped drive
U.S. consumer optimism this month to the lowest level since October, University
of Michigan preliminary survey data showed Friday.” Story at…
MARKET REPORT / ANALYSIS
-Friday the S&P 500 was up about 0.5% to 2459. (Another
new-high.)
-VIX dropped about 4% to 9.51. (Another amazing low VIX
number.)
-The yield on the 10-year Treasury dropped to 2.333%.
Advancing volume finally turned the corner Friday and
headed up on a smoothed 10-day basis.
VIX has once again was below 10. That is a very rare
event that I have written about before here, under CORRECTION COMING and MARKET
ANALYSIS…
The S&P 500 is getting sold late in the day on a
regular basis. It seems that traders
don’t want to hold overnight. It
suggests they are worried, but so far no one has blinked and the markets keep
advancing.
Bollinger Bands are “overbought”, but they are close
together so this isn’t indicating a large drop. The Advance Decline Ratio is
also “overbought” – this is a less reliable indicator. I think RSI would need
to confirm these overbought readings and that has not happened yet.
The S&P 500 managed to slip less than 2% - not much
of a pullback. So, pullback postponed.
It looks like the call is long on a short-term basis. Longer-term,
I’m cautiously bullish; I will worry more in 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…
Today Biotechnology (IBB) was #1.
I would avoid XLE; its 120-day moving average is falling.
SHORT-TERM TRADING PORTFOLIO - 2017 (Small-% of the
total portfolio)
I take a portion of my cash and apply it strategically to
improve returns in cash. My short-term trading has never been about get rich
quick.
Neutral with no positions recommended. - 5/24/2017
thru present.
I am still not bullish enough to take a long position in
the trading portfolio.
-“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
FRIDAY MARKET INTERNALS (NYSE DATA)
Market Internals switched
to Positive 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, Sentiment, Price, Volume, & VIX indicators
were neutral. (With VIX recently below 10
for a couple of days (May and June), 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 for my situation.
