“U.S. producer prices rose more than expected in October,
driven by a surge in the cost of services, leading to the biggest annual
increase in wholesale inflation in more than 5-1/2 years.” Story at…
EMPIRE MANUFACTURING (Advisor Perspectives)
“Business
activity continued to grow strongly in New York State, according to firms
responding to the November 2017 Empire
State Manufacturing Survey. Though the headline general business
conditions index fell eleven points from the multiyear high it reached last
month, it remained firmly in positive territory at 19.4.” Commentary and charts
at…
RETAIL SALES (USNews)
“U.S. retail sales rose at a solid pace last month, as
bullish consumers bought more cars, furniture and clothes. Retail sales
increased 0.2 percent in October…” Story at…
CRUDE INVENTORIES (OiPrice.com)
“The American Petroleum Institute (API) reported a shocking
build of 6.513 million barrels of United States crude oil inventories, against
a Wall Street Journal analyst expectation that inventories would draw down
by 1.4 million
barrels for the week ending November 10.” Story at…
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 was down about 0.6% to 2565.
-VIX jumped up about 13% to 13.13.
-The yield on the 10-year Treasury slipped to 2.326%.
The trend for the S&P 500 is currently down as indicated by market
internals. What we don’t know is if the
trend will continue. In the recent past
these pullbacks have only been about 3%. So far, the Index is only down 1.1%. Given that inflation is picking up and the Fed is in a hiking mode, albeit slow and steady, we can guess that we may see a real correction (>10%) now, or within the next several months. A pullback of some kind is almost a given if one were to rely on history alone. The is the 2nd term of the President and off-Presidential election years are not healthy for the markets. My guess, and it's only a guess, is that we'll see a correction develop from these levels. There are clues.
Internals continued their fall: Only 35% of stocks
advanced on the day; only 40% of volume was up; and new-lows outpaced new-highs
by a number that is high enough to cause concern. Over the last 10-day period only 45%
if stocks on the NYSE have advanced.
From here, the 50-dMA is 2541 and that could be a
stopping point, or not. We’ll see.
Market Internals remained negative today. The sum of
17-indicators continues down. While it hinted at a turn up yesterday, today it
resumed a steep downward march.
I’m bearish short-term. At this point, it looks like
we’ll see some downside ahead.
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) remained #1.
TODAY’S RANKING OF THE DOW 30 STOCKS (Ranked Daily)
The top ranked stock receives 100%. The rest are then
ranked based on their momentum relative to the leading stock.
Intel (INTC) remained #1 today. I have owned Intel for
some time – I bought more Halloween, 10/31/2017. Avoid GE, IBM, Merck, United
Technologies, Verizon and Disney. Their 120-day moving averages are falling.
*I rank the Dow 30 similarly to the ETF ranking system.
For more details, see NTSM Page at…
SHORT-TERM TRADING PORTFOLIO - 2017 (Small-% of the total
portfolio)
LONG
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. I am still holding this 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
WEDNESDAY MARKET INTERNALS (NYSE DATA)
Market Internals remained
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,
October and now November, 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.
