“A pickup in consumer confidence to the
second-highest level since late 2000 provide a basis for steady gains in
spending, according to figures Tuesday from the New York-based Conference
Board.” Story at…
REGIONAL MANUFATURING (Advisor Perspectives)
“Regional manufacturing surveys are a measure of local
economic health and are used as a representative for the larger national
manufacturing health. They have been used as a signal for business uncertainty
and economic activity as a whole. Manufacturing makes up 12% of the country's
GDP.” Charts and commentary at…
MODERATING PORTFOLIO RISK (TR Price)
“…the T. Rowe Price Asset Allocation Committee in 2017
has been moderating the risk profiles of the firm’s asset allocation portfolios
by moving from a neutral position to underweighting stocks versus bonds for the
first time since 2000. To reduce risk, the committee also lowered exposures
this year to high yield and emerging market bonds from overweights to neutral
(relative to U.S. investment-grade bonds).” Full TR Price Report, Summer 2017,
available at…
My cmt: As a conservative retiree, I’m at 50% stocks. I
won’t go lower unless I get a long-term, sell-signal from my analysis.
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 was up slightly to 2446.
-VIX rose about 0.4% to 11.71.
-The yield on the 10-year Treasury slipped to 2.126%.
(The Bond Ghouls are buying and that can be a bearish sign for stocks.)
Market internals deteriorated again today and Up-volume is
now falling on a smoothed 10-day basis.
The Sum of 17 Indicators was neutral on the day, but it remains
positive on a smoothed longer analysis time (i.e.10-day basis).
Overall the short-term indicators are looking more
neutral than bullish. As further evidence, the high unchanged volume we saw
today is considered by some to be an indication of investor confusion or
caution.
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. ITA (Aerospace
and Defense) looked like it was flagging recently, but it was today’s top
performer – up 1.4%. Nothing like the threat of military action to spur on
Defense shares.
Avoid XLE; its 120-day moving average is 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
TUESDAY 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
Tuesday, 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.
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.
