“…it shows whether banks are tightening or
loosening standards on large and medium firms and, as you can see, "a
deterioration in lending standards has historically been a key warning sign for
the S&P 500," Callum notes in his recent Weekly Macro Themes report….Whether you are looking at bank
tightening or other macro data points like global trade, the key message is that the fundamental backdrop for equities still
appears favorable.” Commentary at…
WEEKEND READING FROM LANCE ROBERTS (RIA)
“…despite the much trumpeted operatingearnings growth of
7.67%, reported
earnings (the actual earnings that matter) only rose by 0.51%. Furthermore,
revenue, which is what happens at the top-line of the income statement, has
remained mired at the same level as it was in Q4. With markets having
already priced in much of the forward estimates, there seems to be little
catalyst to push stocks higher at this point leaving investor risk elevated.”
Commentary at…
MARKET REPORT / ANALYSIS
-Monday the S&P 500 was up about 1% to 2466.
-VIX was down about 21% to 12.33.
-The yield on the 10-year Treasury rose to 2.224%.
Today there were only 56 new 52-week highs. Unless
new-highs improve, the market is headed for trouble.
Today was statistically significant in my system. That just means that the price-volume move
exceeded statistical parameters that I track. The stats show that about 62% of
the time a statistically significant move up will be followed by a down day the
next day. Tops frequently have a series
of statistically significant days as the Index flops back and forth showing
investor confusion. A big down day would not be welcome on several levels. What
I’d like to see is a smaller move down or up Tuesday.
We suspect that the S&P 500 is within 1 or 2% of a
short term bottom and perhaps the bottom was last Thursday. If the new-highs
can pick up we’ll be able to breath easier in the short-term
Longer-term, I’m cautiously bullish; I will worry more if
the numbers continue to 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…
Today, Aerospace and Defense (ITA) remained #1. Avoid XLE
and IWM; their 120-day moving averages are 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. I haven’t been doing much recently; I don’t have time to watch
and I think short-term trading takes a watchful eye.
-“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
remained negative on the market, but internals are improving so we may see a shift
to neutral soon.
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, Price was positive. Sentiment & Volume
indicators were neutral. VIX was indicating neutral, but 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.
