“The National Federation of Independent Business reported
a small increase in its optimism index for October, rising 0.8 points to
103.8…the overall level remains high by historical comparison…” Press Release
at..
PRODUCER PRICE INDEX (USAToday)
“Prices at the wholesale level climbed 0.4% in October
and 2.8% over the past year, biggest annual jump in more than five years and a
sign that an improving economy may finally be reviving inflationary pressures.”
Story at…
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 was up about 0.1% to 2579.
-VIX was up about 1% to 11.59.
-The yield on the 10-year Treasury slipped to 2.375%.
Internals continued their fall: Only 41% of stocks
advanced on the day; only 32% of volume was up; and new-lows slightly outpaced
new-highs.
On top of that, sentiment (measured as %-Bulls
(Bulls/{bulls+bears}) based on the amounts invested in Rydex/Guggenheim mutual
funds) is actually climbing as “investors” buy the dip. If the Internals
continue to deteriorate, those dip-buyers will be disappointed, but a
correction isn’t a done deal. As it stands, the S&P 500 isn’t even 1% below
its recent high so no telling if this will be an event that is remembered next
week. The markets have broken all-time
records for the longest time without a pullback of more than 3% and they may
just keep going.
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, but it is hinting at a turn up. That seems like a
good sign, but it could just be that the Indicators will hold in negative
territory while the Index falls.
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
TUESDAY 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
Tuesday, 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.
