FOMC MINUTES (CNBC)
“Minutes from the Oct. 31-Nov. 1 Federal Open Market
Committee meeting indicate some worry about rising financial markets. The
meeting minutes also included a discussion about possibly changing the central
bank's approach to addressing inflation...… Federal
Reserve officials expressed largely optimistic views of economic growth…Story at…
JOBLESS CLAIMS (FoxBusiness)
“The number of Americans filing new applications for
unemployment benefits fell last week, the latest signal the labor market is on
strong footing heading into the end of the year. Initial jobless claims, a
proxy for layoffs across the U.S., decreased 13,000 to a seasonally adjusted
239,000 in the week ended Nov. 18…” Story at…
DURABLE GOODS ORDERS (ABCNews)
“Orders for long-lasting manufactured goods fell last
month for the first time since July, pulled down by plummeting orders for
commercial aircraft. A category that tracks business investment posted the
biggest drop in more than a year. The Commerce Department said Wednesday that
orders for durable goods, which are meant to last at least three years, slid
1.2 percent in October…” Story at…
CRUDE INVENTORIES (OilPrice.com)
“A day after the American Petroleum Institute helped prop
WTI up by reporting a 6.356-million-barrel inventory
draw, the Energy Information Administration chimed in, reporting a
much smaller decline of 1.9 million barrels in crude oil inventories for the
week to November 17. At 457.1 million barrels, the EIA said, crude oil
inventories are within the upper half of the seasonal average.” Story at…
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 was down about 0.1% to 2597.
-VIX was up about 2% to 9.88. (Just a reminder; VIX below
10 is an extreme low number indicating extreme complacency. Previously, when
VIX has been below 10 a crash followed about 6-months later. VIX doesn’t cause
a crash – it just warns that unexpected news may bring a lot of selling as
investors wake up to risk.)
-The yield on the 10-year Treasury slipped to 2.319%.
Indicators were little changed. I had actually expected
them to improve along with the S&P 500.
Holiday periods are usually bullish and internals were positive for the
day even if the Index wasn’t. As
expected before the Holiday, Volume was about 25% below the norm over the last
month; it’s hard to place too much value on the data around Thanksgiving or any
major holiday. All in all, I’d say, “Nothing to see here. Move along. These
aren’t the droids you’re looking for.”
I am bullish short-term and 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) is #1 today with Walmart (WMT) a close
second.
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 sold my VXX position at a slight loss of 0.1% last Friday.
I had been up 7%, but the improvements in the markets caused VIX to tank and it
reversed my profit in 2-days.
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
These rules must
make one careful when shorting.
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 was positive; Sentiment, 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.
