“Construction of new homes in the United States climbed
13.7% in October, the biggest jump in a year, as builders broke ground on more
apartments and single-family houses.” Story at…
MARKET REPORT / ANALYSIS
-Friday the S&P 500 was down about 0.3% to 2579.
-VIX was down about 3% to 11.43.
-The yield on the 10-year Treasury dipped to 2.344%.
My Indicators are mixed today; but even negative ones
improved. While they are still in negative territory, market Internals were
quite strong on the day. Even with the
down day, internals sometimes point the direction of the markets so that was a
worry for holding VXX over the weekend. I’d rather take a miniscule loss than
hold the risk of a much greater loss. Holding VXX could still turn out to be a
big gain, but I don’t want further losses.
The daily sum of 17-indicators was -9 two days ago and
today it was 0. It improved on a 10-day basis too. Up volume improved and both
yesterday and today exhibited up-volume of more than twice down volume. Breadth
has improved too and is now a nearly neutral 49.4% advancing over the last 10-days.
On the bear side, late-day action (the smart money) was down
over the last 2-weeks and it was down again today.
I am neutral short-term. The indicators are mixed.
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. Utilities (XLU) was
#3. That sn’t a gret sign for the
markets. Utilities are often a
safe-haven during market stress.
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.
Walmart (WMT) and Intel (INTC) are essentially tied at #1
today. Let’s see how they do next week. If the markets turn more positive Intel
may regain the lead.
Walmart?...
“The mighty Amazon.com has been a game-changer, a
disrupter, an online retail pioneer that seems to be unstoppable. But old Wal-Mart Stores Inc. has a
few tricks up its sleeve. The Bentonville, Ark.-based company’s investments in
its employees, its online offerings and delivery, and its stores are paying off
in a major way. Investors in Seattle-based Amazon should pay attention.”
Commentary at…
Walmart was up over 10% this week and that’s why WMT
has pulled up so far. The theory is that
this momentum will carry over. We’ll see.
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 loss of 0.1%.
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.
FRIDAY MARKET INTERNALS (NYSE DATA)
Market Internals
were Neutral on the market, but improved significantly.
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, 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.
