“Led by declines in production-related indicators, the
Chicago Fed National Activity Index (CFNAI) moved down to –0.31 in August from
+0.03 in July.” Press release at…
For further discussion of the CFNAI see Advisor
Perspectives at…
CONSUMER CONFIDENCE (Conference Board)
“The Conference Board Consumer Confidence Index®, which had
improved marginally in August, declined slightly in September. The Index now
stands at 119.8 (1985=100), down from 120.4 in August….’Consumer confidence
decreased slightly in September after a marginal improvement in August,” said
Lynn Franco, Director of Economic Indicators at The Conference Board.
“Confidence in Texas and Florida, however, decreased considerably, as these two
states were the most severely impacted by Hurricanes Harvey and Irma. Despite
the slight downtick in confidence, consumers’ assessment of current conditions
remains quite favorable and their expectations for the short-term suggest the
economy will continue expanding at its current pace.’” Press Release at…
NEW HOME SALES (MarketWatch)
“Sales of newly constructed homes tumbled in August, even
as the housing market remained starved for supply. New-home sales…[were]…3.4%
lower compared to a month ago and 1.2% lower than in August 2016.” Story at…
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 was unchanged at 2497.
-VIX slipped about 0.4% to 10.17.
-The yield on the 10-year Treasury rose to 2.236%.
My sum of 17 indicators remained Neutral at zero on the
day. The 10-day version is now bearish. Even the 10-day value can bounce around
a lot. My smoothed version of the 10-day is still bullish.
Once again, up-volume exceeded down volume; advancers
exceeded decliners; and the number of stocks on the NYSE that made new 52-week
new highs was more than 10-times the number of 52-week new-lows. The major
indexes usually follow the majority so we may see some upside movement soon.
I remain bullish longer-term. One wonders when this party
will end so I will worry 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…
Aerospace and Defense (ITA) remained #1 today. I am in
ITA as of 21 Sept.
Avoid XLE; its 120-day moving average is still 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 remained
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 in May, June, July, August and September, 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) 24 March
2017 in my long-term accounts, based on short-term indicators. The remainder
is 50% G-Fund (Government securities). This is a conservative retiree
allocation, but I consider it fully invested for my situation.
