Tuesday, October 31, 2017

Futures Bullish

Tonight, we see bullish futures ignoring my expectation that markets will retreat. The 10-dMA of the % of stocks advancing on the NYSE picked up from 47.4% yesterday to 49.4% Tuesday. There weren’t too many other bullish trends in my numbers although there were neutral ones.  Mr. Market may choose to postpone a pullback again! We’ll see.

Chicago PMI … Consumer Confidence … Stock Market Analysis … ETF Trading … Dow 15 Ranking

CHICAGO PMI (Investing.com)
“Manufacturing activity in the U.S. Midwest unexpectedly strengthened to its strongest level in three years in October...The Chicago Purchasing Management Index rose to 66.2 from 65.2 in September. It was the highest level since October 2014…”  Story at…
 
CONSUMER CONFIDENCE (Conference Board)
“Consumer confidence increased to its highest level in almost 17 years in October after remaining relatively flat in September,” said Lynn Franco, Director of Economic Indicators at The Conference Board. “Consumers’ assessment of current conditions improved, boosted by the job market which had not received such favorable ratings since the summer of 2001.” Press release at…
 
MARKET REPORT / ANALYSIS         
-Tuesday the S&P 500 was up about 0.1% to 2575.
-VIX was down about 3% to 10.18.
-The yield on the 10-year Treasury rose to 2.375%.
 
My Sum of 17 Indicators dropped from -2 to -6.  This is subject to a lot of daily swings so I use a smoothed 10-day value for this indicator.  My 10-day indicator is still falling sharply and that remains bearish.
 
See Friday’s blog post for my thoughts on the Markets – they haven’t changed. Indicators are deteriorating. We’ll see if they keep headed down.
 
A pullback in the range of 3-5% would be the norm. Perhaps we’ll finally see a bigger (10% or more move down), but that is anybody’s guess at this point.  The numbers suggest down; but the magnitude is unknown.
 
Short-term I am still leaning bearish and I made a bearish VXX buy Friday.  It’s a risky move as I noted several times, but with VIX below 10 and other bearish indicators I think it is a reasonable bet.  I’ll have a low tolerance for loss and I’ll sell quickly if this trade moves against me.
 
I remain bullish longer-term. One wonders when this party will end so I will worry if the numbers deteriorate, but for now I remain fully invested.
 
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…
Technology (XLK) was #1; Aerospace and Defense (ITA) remained #2 today and Financials (XLF) weren’t far behind. I am in ITA as of 21 Sept. I plan to sell tomorrow unless ITA puts on a big move up.
 
I thought it would be interesting to apply the ETF ranking system methodology to the Dow 30.  The quick way to do it was to keep the number of stocks the same as my ETF ranking system so here is a ranking of 15 DOW stocks.
 
TODAY’S RANKING OF 15 DOW STOCKS (Ranked Daily)
The top ranked ETF receives 100%. The rest are then ranked based on their momentum relative to the leading ETF.  Avoid GE, Merck and Disney. Their 120-day moving averages are falling.
 
Intel (INTC) remained #1 today. I have owned Intel for some time.
*I rank the Dow 15 similarly to the ETF ranking system. For more details, see NTSM Page at…
 
SHORT-TERM TRADING PORTFOLIO - 2017 (Small-% of the total portfolio)
LONG
As noted Friday I did take a short-term VXX position on 27 Oct very near the close. This violates the rules below, but I am eternally hopeful.
 
My shorting rule is as follows:
-“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, Sentiment, Price, VIX & Volume indicators were neutral. With VIX recently below 10 for a couple of days in May, June, July, August, September and now October, 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.
 
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.

Monday, October 30, 2017

Consumer Spending … Reginal FED Manufacturing … Stock Market Analysis … ETF Trading … Dow 15 Ranking

CONSUMER SPENDING (CNBC/Reuters)
“U.S. consumer spending recorded its biggest increase in more than eight years in September, likely as households in Texas and Florida replaced flood-damaged motor vehicles. The Commerce Department said on Monday consumer spending, which accounts for more than two-thirds of U.S. economic activity, jumped 1.0 percent last month.”  Story at…
 
REGIONAL FED MANUFACTURING (Advisor Perspectives)
“Five out of the twelve Federal Reserve Regional Districts currently publish monthly data on regional manufacturing: Dallas, Kansas City, New York, Richmond, and Philadelphia….The latest average of the five for October is 21.2, up from the previous month's 17.8.” See below chart:
Charts and commentary from Advisor Perspectives at…
 
MARKET REPORT / ANALYSIS         
-Monday the S&P 500 was down about 0.3% to 2573.
-VIX was down about 7% to 10.5.
-The yield on the 10-year Treasury slipped to 2.372%.
 
My Sum of 17 Indicators rose from -3 to -2.  This is subject to a lot of daily swings so I use a smoothed 10-day value for this indicator.  My 10-day indicator is falling sharply and that’s bearish.
 
See Friday’s blog post for my thoughts on the Markets – they haven’t changed.
 
A pullback in the range of 3-5% would be the norm. Perhaps we’ll finally see a bigger (10% or more move down), but that is anybody’s guess at this point.  The numbers suggest down; but the magnitude is unknown.
 
Short-term I am still leaning bearish and I made a bearish VXX buy Friday.  It’s a risky move as I noted several times, but with VIX below 10 and other bearish indicators I think it is a reasonable bet.  I’ll have a low tolerance for loss and I’ll sell quickly if this trade moves against me.
 
I remain bullish longer-term. One wonders when this party will end so I will worry if the numbers deteriorate, but for now I remain fully invested.
 
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…
Technology (XLK) was #1; Aerospace and Defense (ITA) slipped to #2 today and Financials (XLF) weren’t far behind. I am in ITA as of 21 Sept.
 
I thought it would be interesting to apply the ETF ranking system methodology to the Dow 30.  The quick way to do it was to keep the number of stocks the same as my ETF ranking system so here is a ranking of 15 DOW stocks.
 
TODAY’S RANKING OF 15 DOW STOCKS (Ranked Daily)
The top ranked ETF receives 100%. The rest are then ranked based on their momentum relative to the leading ETF.  Avoid GE, Merck and Disney. Their 120-day moving averages are falling.
 
Intel (INTC) moved into #1 today. I have owned Intel for  some time.
*I rank the Dow 15 similarly to the ETF ranking system. For more details, see NTSM Page at…
 
SHORT-TERM TRADING PORTFOLIO - 2017 (Small-% of the total portfolio)
LONG
As noted Friday I did take a short-term VXX position on 27 Oct very near the close. I had intended to post it here during trading hours so others could follow my foolishness if they wanted; but I was out working and only noticed this set-up in the last 10-minutes of the day when I got home. This violates the rules below, but I am eternally hopeful.
 
My shorting rule is as follows:
-“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 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                                                        
Monday, Sentiment, Price, VIX & Volume indicators were neutral. With VIX recently below 10 for a couple of days in May, June, July, August, September and now October, 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.
 
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.

Friday, October 27, 2017

GDP … Michigan Sentiment … Stock Market Analysis … ETF Trading … Dow 15 Ranking

GDP (WSJ)
“The U.S. economy posted its best six-month stretch of growth in three years, rebounding quickly from two hurricanes and showing momentum heading into the year’s final months. Gross domestic product—the broadest measure of goods and services made in the U.S.—expanded at a 3% annual rate in the third quarter…” Story at…
 
MICHIGAN SENTIMENT
The consumer sentiment average during the first ten months of 2017 (96.7) has been the highest since 2000 (108.5).” Story at…
 
MARKET REPORT / ANALYSIS         
-Friday the S&P 500 was up about 0.8% to 2581.
-VIX was down about 13% to 9.8.
-The yield on the 10-year Treasury slipped to 2.411%.
 
Running out of Gas:
-6% of stocks on the NYSE made new-highs today. At the prior all-time high on 20 October, 9% of stocks made new highs.
-The 10-dMA of advancing stocks was 54% on 20 Oct. At today’s new all-time high, only 48% of stocks were advancing on the NYSE over the last 10-days.
-Up volume was 50% of the total over the prior 10-days on 20 Oct.  Today it was 47%.
Momentum is slipping. It looks like we’ll see some sort of pullback. I don’t keep a stat on it, but while market made a new-high on the S&P 500 Friday, two stats stand out: (1) only 48% of stocks have been advancing over the last 10-days (2) declining volume has outpaced advancing volume over the past 10-days. That is odd. It means the smalls aren’t participating as they should. This isn’t unusual so it doesn’t mean there will be a crash; but it does indicate that it is less likely that the market will continue up from here in the short-run given other negative signs we’ve seen recently.
 
Last, the move Friday was statistically significant based on the standard deviation of the price-volume when compared to recent history. That is likely to result in a down-day Monday about 60% of the time. I wrote recently that “…before we see any meaningful pullback, we need to put in a top.  At this point another big move up, say around 1%, could mark another short-term top.” Today’s move of 0.8% didn’t quite make my target, but I think it may be close enough. The Index is at its upper trend line and we have certainly seen enough bearish signals for the last 6-weeks. Bollinger Bands finally joined the bearish party with an overbought indication today.
 
A pullback in the range of 3-5% would be the norm. Perhaps we’ll finally see a bigger (10% or more move down), but that is anybody’s guess at this point.  The numbers suggest down; but the magnitude is unknown.
 
Short-term I am still leaning bearish and I made a bearish VXX buy today.  It’s a risky move as I noted several times, but with VIX below 10 and other bearish indicators I think it is a reasonable bet.  I’ll have a low tolerance for loss and I’ll sell quickly if this trade moves against me.
 
I remain bullish longer-term. One wonders when this party will end so I will worry if the numbers deteriorate, but for now I remain fully invested.
 
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. The Financials (XLF) picked up steam presumably based on higher interest rates as we have noticed the 10-yr bond rising recently.
 
I thought it would be interesting to apply the ETF ranking system methodology to the Dow 30.  The quick way to do it was to keep the number of stocks the same as my ETF ranking system so here is a ranking of 15 DOW stocks.
 
TODAY’S RANKING OF 15 DOW STOCKS (Ranked Daily)
The top ranked ETF receives 100%. The rest are then ranked based on their momentum relative to the leading ETF.  Avoid GE, Merck and Disney. Their 120-day moving averages are falling.
 
Caterpillar (CAT) remained #1.
*I rank the Dow 15 similarly to the ETF ranking system. For more details, see NTSM Page at…
 
SHORT-TERM TRADING PORTFOLIO - 2017 (Small-% of the total portfolio)
LONG
As noted above I did take a short-term VXX position on 27 Oct very near the close. I had intended to post it here during trading hours so others could follow my foolishness if they wanted; but I was out working and only noticed this set-up in the last 10-minutes of the day when I got home. This violates the rules below, but I am eternally hopeful.
 
My shorting rule is as follows:
-“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 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                                                        
Friday, Sentiment, Price, VIX & Volume indicators were neutral. With VIX recently below 10 for a couple of days in May, June, July, August, September and now October, 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.
 
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.

Thursday, October 26, 2017

Jobless Claims … Kansas City FED … Real Durable Goods Orders … Stock Market Analysis … ETF Trading … Dow 15 Ranking

JOBLESS CLAIMS
The number of Americans filing for unemployment benefits increased less than expected last week, suggesting the labor market continued to tighten after recent hurricane-related disruptions…Initial claims for state unemployment benefits increased 10,000 to a seasonally adjusted 233,000 for the week ended Oct. 21…” Story at…
 
KANSAS CITY FED (People’s Pundit Daily)
“The Kansas City Federal Reserve Bank said their gauge of manufacturing activity in the Tenth District came in at 23 in October, stronger than the 17 median forecast…“Factory activity accelerated further in our region this month, posting its highest composite reading since 2011,” said Chad Wilkerson, vice president and economist at the Federal Reserve Bank of Kansas City.” Story at…
 
REAL DURABLE GOODS ORDERS (Advisor Perspectives)
“As these charts illustrate, when we study durable goods orders in the larger context of population growth and also adjust for inflation, the data becomes a coincident macro-indicator of a major shift in demand within the U.S. economy. It correlates with a decline in real household incomes, as illustrated in our analysis of the most recent Census Bureau household income data…” Charts and analysis at…
 
MARKET REPORT / ANALYSIS         
-Thursday the S&P 500 was up about 0.1% to 2560.
-VIX was up about 0.6% to 11.30.
-The yield on the 10-year Treasury increased to 2.465%.
 
My Sum of 17-Indicators rose from -2 to 0. Longer term the Indicators are falling sharply. Indicators are not much different than yesterday, but there are a couple of changes:
-Up-volume moved up on a 10-day basis.  That’s a bullish change.
-The Smart Money Indicator (based on late day action) turned down after a positive day yesterday.  Looks like the Pro trend is still selling after turning up for only 1-day.
 
 
I noted yesterday that “we may see a short-term dip in the 3-5% range. Earnings will play a part in investor psychology. Google, Amazon, Intel all report tomorrow albeit after the close, so they’ll set the tone for Friday.” How did they do?
“Four of the most valuable tech companies in the world—Amazon.com Inc., Google parent company Alphabet Inc., Microsoft Corp.  and Intel Corp.  — destroyed expectations for profit and revenue in third-quarter reports Thursday afternoon, collectively bringing in about $2.2 billion more profit and $19 billion more revenue than the same quarter a year ago.” Story at…
 
This may be enough to avoid a pullback for a bit longer.
 
Short-term I am still leaning bearish, but I remain bullish longer-term. One wonders when this party will end so I will worry if the numbers deteriorate, but for now I remain fully invested.
 
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.
 
I thought it would be interesting to apply the ETF ranking system methodology to the Dow 30.  The quick way to do it was to keep the number of stocks the same as my ETF ranking system so here is a ranking of 15 DOW stocks.
 
TODAY’S RANKING OF 15 DOW STOCKS (Ranked Daily)
The top ranked ETF receives 100%. The rest are then ranked based on their momentum relative to the leading ETF.  Avoid GE, Merck and Disney. Their 120-day moving averages are falling.
 
Caterpillar (CAT) remained #1.
*I rank the Dow 15 similarly to the ETF ranking system. For more details, see NTSM Page at…
 
SHORT-TERM TRADING PORTFOLIO - 2017 (Small-% of the total portfolio)
LONG
We didn’t get a good signal on the Top. Looks like I’ve missed the opportunity to short (or buy the VIX) because the signal wasn’t very strong Friday. It’s still possible we might get a signal to take a short-term VXX position.
 
My shorting rule is as follows:
-“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
 
THURSDAY 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                                                        
Thursday, Sentiment, Price, VIX & Volume indicators were neutral. With VIX recently below 10 for a couple of days in May, June, July, August, September and now October, 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.
 
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.

Wednesday, October 25, 2017

Durable Goods Orders … New Home Sales … Crude Inventories … Stock Market Analysis … ETF Trading … Dow 15 Ranking

DURABLE GOODS ORDERS (USA Today)
“Orders for long-lasting manufactured goods rose 2.2% in September, the biggest gain in three months, led by a big increase in orders for commercial aircraft.” Story at…
 
HOME SALES (Reuters)
“Sales of new U.S. single-family homes unexpectedly rose in September, hitting their highest level in nearly 10 years…” Story at…
 
CRUDE INVENTORIES (24/7WallSt)
“The U.S. Energy Information Administration (EIA) released its weekly petroleum status report Wednesday morning, showing that U.S. commercial crude inventories increased by 900,000 barrels last week, maintaining a total U.S. commercial crude inventory of 457.3 million barrels.” Story at…
 
MARKET REPORT / ANALYSIS         
-Wednesday the S&P 500 was down about 0.5% to 2557.
-VIX was up about 0.6% to 11.23.
-The yield on the 10-year Treasury increased to 2.436%. (Back in March the yield hit 2.6%. The rising rates are troubling some investors; higher rates may pull some out of the stock market.)
 
My Sum of 17-Indicators slipped to -2 from +2 Tuesday. Looking at some indicators: 
 
Bearish:
-My Money Trend Indicator slipped below zero.  That’s a smoothed 10-day value so it demonstrates some behind the scenes weakness.
-The 10-day moving average (d-MA) of stocks advancing on the NYSE dropped to 48.2% indicating less than half of stocks on the NYSE have been advancing over the last 10-days.
-Comparing the Cyclical Industrials (XLI-ETF) to the S&P 500 shows cyclicals are being sold relative to the Index.  This is bearish.
-New-high/new-low data is falling over on a 10-dMA basis, but longer term it is still creeping higher. The longer term will be more definitive, so for now we may consider this indicator to be neutral, but leaning bearish.
-Bollinger Bands were overbought a month ago, signaling a sell (then) because the Index exceeded 2-std deviations above the norm.  Since then they have been stretched. Now they’ve settled into a neutral indication along with RSI. Still, they warned at the recent top 3-days ago.
 
On the Bullish side:
-The Smart Money Indicator (based on late day action) turned positive today.  Looks like the Pros are starting to buy.
-The move Wednesday was statistically significant based on the standard deviation of the price-volume when compared to recent history. That is likely to result in an up-day tomorrow.
 
It is looking more like we may see a short-term dip in the 3-5% range. Earnings will play a part in investor psychology. Google, Amazon, Intel all report tomorrow albeit after the close, so they’ll set the tone for Friday.
 
Short-term I am now leaning bearish (make up your mind!) but I remain bullish longer-term. One wonders when this party will end so I will worry if the numbers deteriorate, but for now I remain fully invested.
 
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.
 
I thought it would be interesting to apply the ETF ranking system methodology to the Dow 30.  The quick way to do it was to keep the number of stocks the same as my ETF ranking system so here is a ranking of 15 DOW stocks.
 
TODAY’S RANKING OF 15 DOW STOCKS (Ranked Daily)
The top ranked ETF receives 100%. The rest are then ranked based on their momentum relative to the leading ETF.  Avoid GE and Disney. Their 120-day moving averages are falling.
 
Boeing (BA) slipped to #2 and Caterpillar (CAT) moved into #1 based on its strong earnings yesterday. (It was up around 5% yesterday.) CAT is currently number one on a momentum basis. Boeing slipped 3% on its earnings today.  BA is up around 72% this year so there is going to be profit taking.
*I rank it similarly to the ETF ranking system. Or more details, see NTSM Page at…
 
SHORT-TERM TRADING PORTFOLIO - 2017 (Small-% of the total portfolio)
LONG
We didn’t get a good signal on the Top. Looks like I’ve missed the opportunity to short (or buy the VIX) because the signal wasn’t very strong Friday.
 
My shorting rule is as follows:
-“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 switched to Negative 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, Sentiment, Price, VIX & Volume indicators were neutral. With VIX recently below 10 for a couple of days in May, June, July, August, September and now October, 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.
 
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.