“The Commerce Department said on Friday that wholesale
inventories rose 0.6 percent, matching the rise in each of the previous two
months…The component of wholesale inventories that goes into the calculation of
gross domestic product - wholesale inventories excluding autos - rose 0.7
percent in July.” Story at…
OFF TOPIC - FYI
Story and Chart at…
MARKET REPORT / ANALYSIS
-Friday the S&P 500 slipped about 0.2% to 2461.
-VIX was up about 5% to 12.12.
-The yield on the 10-year Treasury was up a bit to 2.054%.
Market Internals slipped to neutral as New-high/new-low
data slipped. New highs are still outpacing new-lows, but the spread between
the highs and lows has been falling.
The Sum of 17-indicators also rolled over on a 10-day
basis and was negative on the day as more indicators were negative instead of
positive on the market. The Index closed 0.3% above its 50-dMA so that’s still
an important point to watch. The 50-day
is now 2455.
The old standby advance-decline ratio remains “overbought”
and that’s somewhat bearish.
Late-day action was down today and the general direction
remains down to neutral on a longer-term basis. In theory, this shows that the
Pros are worried.
The cyclical industrial stocks as a group (the XLI - ETF)
is outperforming the S&P 500 as of yesterday and that can be a bullish
sign. When traders are worried,
cyclicals are usually the first sector to be sold.
Overall the short-term indicators switched from Bullish to
neutral today; but unless the S&P 500 slips below its 50-day moving average
I am not going to worry.
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 &
XLF; their 120-day moving averages are 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 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
FRIDAY 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
Friday, 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) 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.
