“The vast majority of U.S. companies in fields such as
retail, medical care and food service expanded in August, keeping the economy
on course in the second half of the year for steady growth. The Institute for
Supply Management said its non-manufacturing index rose to 55.3% last month…” Story
at…
FED BEIGE BOOK (Fox Business)
"Economic activity expanded at a modest to moderate
pace," the central bank said Wednesday in its latest roundup of anecdotal
information about regional economic conditions, known as the beige book.
"Employment growth slowed some on balance, ranging from a slight to a
modest rate in most districts." Story at…
My cmt: Markeys were little changed after the Beige Book
was released at 2PM.
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 was up about 0.8% to 2466.
-VIX dropped about 5% to 11.64.
-The yield on the 10-year Treasury rose to 2.102%.
Market Internals remain bullish; the old standby
advance-decline ratio remains “overbought.
The sum of 17-indicators was little unchanged today, but
the 10-day value shows a vastly brighter view of the markets. It indicates the
markets have improved a lot in the last 10-days.
Late-day action was down today, and the general direction
remains down on a longer-term basis. In theory, this shows that the Pros are
worried.
Overall the short-term indicators remain 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…
Biotechnology (IBB) remained #1 today. Avoid XLE; its
120-day moving average is falling.
SHORT-TERM TRADING PORTFOLIO - 2017 (Small-% of the
total portfolio)
LONG
I haven’t been doing much trading recently. I do own SSO
(2xS&P 500 ETF) that I established last Wednesday (23 July). My trading has
been so bad recently that I didn’t want to encourage anyone to follow my
example so I didn’t post it here.
-“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 Positive 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 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.
