MARKET REPORT / ANALYSIS
-Monday the S&P 500 was down a fraction – essentially
unchanged.
-VIX rose about 3% to 9.82, but remains historically near
extreme lows. (This is signaling extreme complacency.)
-The yield on the 10-year Treasury dropped to 2.318%.
My sum of 17-indicators is a reasonably bullish +7 on the
day, down from +8 last trading-day.
Since there is a lot of volatility in this indicator, I use a smoothed10-day
average. That number is falling slightly too, but it remains generally bulish.
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.
The S&P 500 managed to slip less than 2% - not much
of a pullback. So it appears that the pullback has been postponed based mostly
on a review of the charts.
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) remains #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
MONDAY 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
Monday, Sentiment, Price, Volume, & VIX indicators
were neutral. (VIX would be signaling BUY
now, but with VIX recently below 10 for a couple of days (May and June, and now
July), 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.
