For analysis of the JOLTS data see…
MARKET REPORT / ANALYSIS
-Monday the S&P 500 was up about 0.3% to 2660.
-VIX was down about 3% to 9.34. (The Options Boys don’t
believe a correction is brewing.)
-The yield on the 10-year Treasury rose to 2.391%.
My sum of 17 Indicators improved from -1 to +1 on the day,
but slipped a little on a longer-term basis. A “+” number means there are more bullish
indicators than bearish. Not much change really on the totals, but one notable
bearish indicator follows:
-RSI is negative at 82. Relative Strength measures the
size of up-moves vs. all-moves on a 14-day moving average basis and presents
the result as a percentile. For example; if the RSI is 85, it means that the
size of up-moves are in the 85th percentile when compared to all moves over the
14-day period. If ALL moves had been up, RSI would be 100 – a definite short term
sell indicator. For my purposes, 30 is oversold (suggesting a turn-around to
the upside) and 80 is overbought. If the up-moves and down-moves are equal in
size over the 14-day period, RSI would be 50.
All in all, I am neutral in the short-term; I wouldn’t
short this market unless we see some more compelling evidence of a correction. I remain bullish longer term.
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…
Financials (XLF) was #1. The markets look a bit strained
so perhaps I’ll get a better buying opportunity. I’ll wait before adding any positions. Other
than XLF, there’s not much difference between the next 4. The return on XLF
over the last 40-days is 7.1%. None of the ETFs are tearing up the markets.
(I hold XLK, DVY and SPY.)
TODAY’S RANKING OF THE DOW 30 STOCKS (Ranked Daily)
Caterpillar (CAT) and Boeing (BA) are all essentially
tied at #1. (I hold Intel.)
Avoid GE and Merck. 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)
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
MONDAY MARKET INTERNALS (NYSE DATA)
Market Internals
remained Neutral on the market. (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
Monday, Price indicator was positive; Sentiment, Volume & VIX
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.
