“Consumer sentiment narrowed its loss from mid-month,
although it was still slightly below last month's decade peak. Overall, the
Sentiment Index has remained largely unchanged since the start of the year at
the highest levels since 2004.” Story at…
MARKET REPORT / ANALYSIS
-Friday the S&P 500 was up about 0.2% to 2602.
-VIX was down about 2% to 9.65. (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 rose to 2.339%.
Indicators were unchanged at +1 on the day, but continue
to improve when compared to 10-days ago. That’s good news for the bulls and
continues to support my bullish view in the short and long-term.
Volume hit its low for the year and was about 60% below
the norm over the last month. That’s
where it was Black Friday last year so nothing new here. The % of stocks advancing
is improving faster than the S&P 500 and that’s a bullish sign too.
On the Bearish side: Bollinger Bands are close to an “overbought”
indication and a Bollinger Band squeeze is possible. A squeeze usually is followed by a big move,
one way or the other. Because the Index is near its upper trend line and my guess
would be that a down move would be indicated should we actually get a squeeze.
RSI is currently neutral so I think these bear signals will be further down the
road,
In summary: 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. (I own XLK, DVY and SPY.)
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) remains #1 today with Walmart (WMT) a close
second. (I own Intel.)
Avoid GE, IBM, Merck, United Technologies 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% on 14 Nov.
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.
FRIDAY MARKET INTERNALS (NYSE DATA)
Market Internals
remained Positive on the market….sort of. My Market Internals Volume indicator
is based on the actual up-volume over a smoothed 10-day period. When daily volume
is extremely low (like yesterday and today) this can give a neutral or bearish
indication just because ALL of the volume is low. On extreme overall low-volume
days I revert to up-volume on a %-basis. Currently, up-volume is 53% over the
previous 10-days indicating an up trend and a positive indication. (Market
Internals are based on a package of internals and all must be positive to
create a positive indication.
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, 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.
