“The Conference Board LEI for the U.S. increased sharply
in October, driven by positive contributions from almost all its underlying
components. In the six-month period ending October 2017, the leading economic
index increased 2.9 percent (about a 5.9 percent annual rate), faster than the
growth of 2.3 percent (about a 4.6 percent annual rate) during the previous six
months.” Commentary at…
MARKET REPORT / ANALYSIS
-Monday the S&P 500 was down about 0.1% to 2582.
-VIX was down about 7% to 11.65.
-The yield on the 10-year Treasury rose to 2.362%.
My Indicators improved and are improving on a longer-term
basis. The daily sum of 17-indicators was
-9 two days ago and today it remained 0. It improved again on a 10-day basis. Late-day
action (the smart money) is now headed up over the last 2-weeks and that’s a
bullish sign in the short-term. Utilities fell today and that’s a bullish sign
too. Utilities are a safe-haven when the markets are in trouble.
I am leaning bullish short-term because indicators are
currently improving. My guess is that it
is not likely to continue; Sentiment is very close to the extreme readings that
sometimes reverse the direction of the Index.
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.
Walmart (WMT) and Intel (INTC) remain essentially tied at
#1 today.
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 has been 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% loss Friday. I
had been up 7%, but the improvements in the markets 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.
MONDAY MARKET INTERNALS (NYSE DATA)
Market Internals
were Neutral on the market, but improved again.
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,
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.
