“Payroll processor ADP said the private sector added a
robust 237,000 jobs in August. That would appear to possibly signal a third
straight month of strong hiring in the Labor Department’s employment report
Friday, which will be closely watched.” Story at…
GDP (MarketWatch)
“The
U.S. economic rebound in the second quarter was stronger than initially
reported, as a lift to consumer spending and business investment led to the
strongest growth in more than two years. Gross domestic product rose at 3% rate
from April to June…” Story at…
CRUDE INVENTORIES (OilPrice.com)
“Amid the shutdown of 20 percent of
U.S. refining capacity caused by Hurricane Harvey and the pending shutdown of
more refineries as the storm moves on to Louisiana, the EIA’s latest weekly
inventory report may
limit the fall in WTI prices.
The authority reported a draw of 5.4 million barrels for
the week ending August 25…
the end of driving season is drawing near and this fact, coupled with the
refinery damage Harvey caused, will be certain to affect prices in an adverse
way.” [i.e., prices are likely to fall.] Story at…
http://oilprice.com/Energy/Crude-Oil/Oil-Markets-React-Stoically-To-Strong-Crude-Inventory-Draw.html
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 was up slightly about 0.5% to
2458.
-VIX dropped about 4% to 11.22.
-The yield on the 10-year Treasury rose to 2.134%. (The
Bond Ghouls were selling today - that can be a bullish sign for stocks.)
Market internals remained Neutral today (Up-volume is still
slipping on a smoothed 10-day basis), but advancing-issues were strong and advancing-volume
outpaced down-volume. New-highs outpaced
new-lows, but I’d still like to see more new-highs. Let’s hope this stat can
move up. Currently new-highs are flat on
a smoothed basis.
Traders were selling toward the close (based on late-day
action), but the closing tick was a very strong 648. That suggests there were a
lot of buy-at-the-close orders. This is somewhat bullish for Thursday.
Like yesterday, the Sum of 17 Indicators was neutral on
the day, but it remains positive on a 10-day basis.
Overall the short-term indicators are looking more bullish
today.
Longer-term, I’m cautiously bullish; I will worry more if
the numbers deteriorate, but I remain fully invested. There isn’t any news now
that signals a bear market and long-term indicators remain neutral.
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…
Emerging Markets (SCHE) remained #1 today, but it was
essentially tied with ITA. ITA (Aerospace and Defense) looked like it was
flagging recently, but it was today’s 4th performer – up 0.6%. Nothing like the
threat of military action to spur on Defense shares.
Avoid XLE and XLF; their 120-day moving averages are
falling.
SHORT-TERM TRADING PORTFOLIO - 2017 (Small-% of the
total portfolio)
LONG
-“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
WEDNESDAY MARKET INTERNALS (NYSE DATA)
Market Internals remained
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
Wednesday, Price,
Sentiment, VIX & Volume indicators were neutral. With VIX recently
below 10 for a couple of days (May, June,
July and now August), VIX may be prone to incorrect signals. Usually, a
rising VIX is a bad market sign; now it may move up, but that might 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.
