Wednesday, January 31, 2018

Chicago PMI … ADP Employment … Crude Inventories … FOMC Rate Decision … The Line n the sand for10-yr Treasury Rates … Stock Market Analysis … ETF Trading … Dow 30 Ranking

CHICAGO PMI (MarketWatch)
“Chicago PMI slips from nine-year high…The Chicago PMI slipped 2.1 points to 65.7, MNI Indicators said Wednesday.” Story at… 
 
ADP EMPLOYMENT (USA Today)
“Businesses added 234,000 jobs in January, payroll processor ADP said Wednesday, marking a robust start to the year for hiring and possibly signaling that the government on Friday will report a rebound in job growth after a weak number in the final month of 2017.” Story at…
 
CRUDE INVENTORIES (OilPrice.com)
“As investment banks become increasingly bullish on crude oil, the Energy Information Administration reported a 6.8-million-barrel build in U.S. crude oil inventories for the week ending January 26. The report comes a day after the American Petroleum Institute surprised markets once again with an estimated build of 3.23 million barrels.” Story at…
 
FOMC RATE DECISION (Bloomberg)
“Federal Reserve officials, meeting for the last time under Chair Janet Yellen, left borrowing costs unchanged while adding emphasis to their plan for more hikes, setting the stage for an increase in March under her successor Jerome Powell. “The committee expects that economic conditions will evolve in a manner that will warrant further gradual increases in the federal funds rate,” the policy-setting Federal Open Market Committee said in a statement Wednesday in Washington, adding the word “further” twice to previous language.” Story and video at…
 
THE 10-YEAR LINE IN THE SAND (Marketwatch)
“The big number this week could be the 3% level for the 10-year Treasury yield, with strategists buzzing about whether a rise to that spot will upset stocks….“No one knows what the number is on 10s when this really starts to unravel. But if you’re the type who puts any stock in psychological levels, 3% has a not-so-nice ring to it,” says the blogger behind the Heisenberg Report for our call of the day.” Story at…
 
MARKET REPORT / ANALYSIS         
-Wednesday the S&P 500 was up about 1pt to 2824.
-VIX dropped about 8% to 13.54.
-The yield on the 10-year Treasury slipped a bit to 2.704%.
 
My sum of 17 Indicators improved from -9 to -4 today. (A “-” number means that most indicators are bearish.) On a Longer term, smoothed basis to avoid the daily fluctuations, the indicators are falling and looking bearish.
 
Topping indicators have been warning of a top for several weeks. In addition, over the last 10-days, only 45% of stocks have advanced and only 48% of volume has been up on the NYSE. These signals are suggesting a downtrend, but certainly don’t guarantee it.
 
There was a strong ending today as the S&P 500 made a big move up in the last hour of trading (a bullish sign); then it slipped for the last 15 minutes into the close. Talk about mixed signals! The closing Tick (sum of the last trades of the day) was -301 and that’s a bearish sign for the day. Overall, we’d have to say the close was somewhat bearish. I think a worse day would have been a big up day.
 
I did cut back some on stocks. I am now down to 40% invested in stocks. I am taking a very conservative stance even though the most likely outcome is only a 5% pullback – if we do indeed get a pullback. I’ll get back to fully invested quickly if this turns out to be a false alarm.
 
I am bearish short-term. Longer term I remain a bull.
 
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%. In 2017 Technology (XLK) was ranked in the top 3 Momentum Plays for 52% of all trading days in 2017 (if I counted correctly.) XLK was up 35% on the year while the S&P 500 was up 18%.
*For additional background on the ETF ranking system see NTSM Page at…
 
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. Avoid GE, Procter & Gamble 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…
 
WEDNESDAY MARKET INTERNALS (NYSE DATA)
Market Internals remained to 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                                                        
Wednesday, the Price indicator was positive; Sentiment, Volume & VIX indicators were neutral.
 
MY INVESTED STOCK POSITION:
TSP (RETIREMENT ACCOUNT – GOV EMPLOYEES) ALLOCATION
I shifted to 40% stocks in the S&P 500 Index fund (C-Fund) with the remainder is 60% G-Fund (Government securities). This is a conservative position given the number of negative signs observed recently. My normal fully invested position is only 50% so I am not drastically bearish.
For Government employees: Making a TSP change late in a month preserves 2 moves for the next month since the TSP only allows 2 changes per month. After that one can only add to the G-Fund.

Tuesday, January 30, 2018

Consumer Confidence … Stock Market Analysis … ETF Trading … Dow 30 Ranking

CONSUMER CONFIDENCE (Bloomberg)
“U.S. consumer confidence was stronger than expected in January and hovering near a 17-year high as households grew somewhat more upbeat about employment and the economy, according to figures out Tuesday from the Conference Board in New York.” Story at…
 
MARKET REPORT / ANALYSIS         
-Tuesday the S&P 500 was down 1% to 2822.
-VIX jumped about 7% to 14.72.
-The yield on the 10-year Treasury was little changed at 2.70%.
 
-My sum of 17 Indicators dropped from -4 to -9 today. (A “-” number means that most indicators are bearish.) Longer term, the indicators are also falling.
 
Today was a big down-day that was significant in my system.  That means that on a statistical basis, today’s move in Price-Volume was large enough to suggest a reversal to the upside tomorrow.  At market tops, there is often a back and forth bounce between strong up-days and followed by strong down-days. Today followed that pattern; we had a statistically significant down-day 2-days ago followed by a strong up-day today.  As a result, an up-day is suggested Wednesday. If that doesn’t happen, it may mean that the top is already in. On the other hand, an up-move of 1% or greater Wednesday is actually a negative sign, too.
 
Either way, I plan to cut back some on stocks. I’m at 50% in stocks. I would think a 40% stock holding is warranted now in the short-term. (That’s just me; I am conservative at this point.) Repeating: This doesn’t have to be a major top. A drop in the 5% range is the most likely outcome if we actually do have a pullback.
 
I am bearish short-term. Longer term I remain a bull.
 
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%. In 2017 Technology (XLK) was ranked in the top 3 Momentum Plays for 52% of all trading days in 2017 (if I counted correctly.) XLK was up 35% on the year while the S&P 500 was up 18%.
*For additional background on the ETF ranking system see NTSM Page at…
 
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. Avoid GE, Procter & Gamble 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…
 
TUESDAY MARKET INTERNALS (NYSE DATA)
Market Internals slipped to 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, the Price indicator was positive; Sentiment, Volume & VIX indicators were neutral.
 
MY INVESTED STOCK POSITION:
TSP (RETIREMENT ACCOUNT – GOV EMPLOYEES) ALLOCATION
I remain FULLY INVESTED at 50% stocks in the S&P 500 Index fund (C-Fund) with the remainder is 50% G-Fund (Government securities). This is a conservative retiree allocation, but I consider it fully invested for my situation.

Monday, January 29, 2018

Personal Income / Personal Spending … Stock Market Analysis … ETF Trading … Dow 30 Ranking

PERSONAL SPENDING (Briefing.com)
“Personal income increased 0.4%, as expected, while personal spending also increased 0.4% … Wages and salaries increased 0.5% in December, which helped drive the increase in personal income along with a 1.2% gain in personal interest income.” More and charts from…
 
MARKET REPORT / ANALYSIS         
-Monday the S&P 500 was down 0.7% to 2854.
-VIX jumped about 25% to 13.84.
-The yield on the 10-year Treasury rose to 2.72%. (This is in the red zone that many have suggested will lead to selling in the stock market.)
 
-My sum of 17 Indicators dropped from 0 to -4 today. (A “-” number means that most indicators are bearish.) Longer term, the indicators are also falling.
 
I have been looking at topping indicators which are bearish, suggesting we are at or near a top for several weeks. (This doesn’t have to be a major top. A drop in the 3-5% range is likely; but of course, it could be worse.)
 
The Index is 11% above its 200-dMA. One needs to go all the way back to Feb of 2011 to find a number that high. In 2011, that peak was followed by a 4% drop; a recovery to new highs; and then a 19% drop.  Clearly, we are in territory that requires a heightened level of attention.
 
I am still bearish short-term – topping indicators look stretched. Longer term I remain a bull.
 
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%. In 2017 Technology (XLK) was ranked in the top 3 Momentum Plays for 52% of all trading days in 2017 (if I counted correctly.) XLK was up 35% on the year while the S&P 500 was up 18%.
*For additional background on the ETF ranking system see NTSM Page at…
 
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. Avoid GE, Procter, Gamble and Merck. Their 120-day moving average is falling.
*I rank the Dow 30 similarly to the ETF ranking system. For more details, see NTSM Page at…
 
MONDAY MARKET INTERNALS (NYSE DATA)
Market Internals slipped to 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                                                        
Monday, Price and Volume indicators were positive; Sentiment & VIX indicators were neutral. This adds up to a BUY indication, but at this point a BUY signal is meaningless.  The NTSM system is designed to issue BUY signals near a Bottom as conditions rapidly improve.  Now, it is just an indication that the market is doing well.  The NTSM long-term signal can sometimes signal BUY at the top if conditions are too good. The last actionable Buy signal was on 15 November 2016.
 
MY INVESTED STOCK POSITION:
TSP (RETIREMENT ACCOUNT – GOV EMPLOYEES) ALLOCATION
I remain FULLY INVESTED at 50% stocks in the S&P 500 Index fund (C-Fund) with the remainder is 50% G-Fund (Government securities). This is a conservative retiree allocation, but I consider it fully invested for my situation.

Friday, January 26, 2018

GDP … Durable Goods Orders … Stock Market Analysis … ETF Trading … Dow 30 Ranking

GDP (Marketwatch)
“Consumers and businesses powered the economy to a 2.6% rate of gross domestic product growth in the final three months of 2017. But declining inventories and a wider trade deficit kept the U.S. from hitting the 3% mark for the third quarter in a row for the first time in 13 years.” Story at…
 
DURABLE GOODS ORDERS
“Orders placed with U.S. factories for durable goods increased in December by the most in six months, providing more evidence of a bustling industrial sector. Bookings for goods meant to last at least three years increased 2.9 percent…” Story at…
 
MARKET REPORT / ANALYSIS         
-Friday the S&P 500 was up about 1.2% to 2873.
-VIX was down about 4% to 11.08.
-The yield on the 10-year Treasury rose to 2.66%.
 
-My sum of 17 Indicators dropped from +8 to 0 today. (A “+” number means that most indicators are bullish.) Longer term, the indicators are falling.
 
I have been looking at topping indicators which are bearish, suggesting we are near a top for several weeks. Yesterday I noticed that the S&P 500 is just now nearing its upper long-term trend line (going back to 2012). That suggests this up-move might go a bit further; on the other hand, the big up-day today suggests a top, or at least some retreat ahead. 
 
The Index is 11% above its 200-dMA. One needs to go all the way back to Feb of 2011 to find a number that high. In 2011, that peak was followed by a 4% drop; a recovery to new highs; and then a 19% drop.  Clearly, we are in dangerous territory – though it is possible that this level of bullishness may allow the markets to go higher. I don’t expect it to go much higher.
 
I am still bearish short-term – topping indicators look stretched. If I see some more negative signs I will begin to pare back a bit on stock holdings. Longer term I am a bull.
 
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%. In 2017 Technology (XLK) was ranked in the top 3 Momentum Plays for 52% of all trading days in 2017 (if I counted correctly.) XLK was up 35% on the year while the S&P 500 was up 18%.
*For additional background on the ETF ranking system see NTSM Page at…
 
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. Avoid GE, Procter, Gamble and Merck. Their 120-day moving average is falling.
*I rank the Dow 30 similarly to the ETF ranking system. For more details, see NTSM Page at…
 
FRIDAY MARKET INTERNALS (NYSE DATA)
Market Internals slipped to Neutral 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                                                        
Friday, Price and Volume indicators were positive; Sentiment & VIX indicators were neutral. This adds up to a BUY indication, but at this point a BUY signal is meaningless.  The NTSM system is designed to issue BUY signals near a Bottom as conditions rapidly improve.  Now, it is just an indication that the market is doing well.  The NTSM long-term signal can sometimes signal BUY at the top if conditions are too good. The last actionable Buy signal was on 15 November 2016.
MY INVESTED STOCK POSITION:
TSP (RETIREMENT ACCOUNT – GOV EMPLOYEES) ALLOCATION
I remain FULLY INVESTED at 50% stocks in the S&P 500 Index fund (C-Fund) with the remainder is 50% G-Fund (Government securities). This is a conservative retiree allocation, but I consider it fully invested for my situation.

Thursday, January 25, 2018

Jobless Claims … New Home sales … Stock Market Analysis … ETF Trading … Dow 30 Ranking

JOBLESS CLAIMS (Cleveland Business)
“U.S. filings for unemployment benefits increased a week after plunging to the lowest level since 1973, underscoring a still historically tight jobs market, Labor Department figures showed on Thursday, Jan. 25. Jobless claims increased by 17,000 to 233,000…” Story at…
 
NEW HOME SALES (USA Today)
“Americans cut back their purchases of new homes in December as harsh winter weather dampened demand. The Commerce Department said Thursday that new-home sales skidded 9.3% last month…” Story at…
 
MARKET REPORT / ANALYSIS         
-Thursday the S&P 500 was up about a point to 2839.
-VIX was up about 1% to 11.58.
-The yield on the 10-year Treasury was little changed at 2.627%.
 
-My sum of 17 Indicators rose from +6 to +8 today. (A “+” number means that most indicators are bullish.) Longer term, the indicators are flat. There are plenty of bullish indicators: The late-day action is still headed up implying the Pros are neutral to Bullish.
 
I am bearish short-term – topping indicators still look stretched. If I see some more negative signs I will begin to pare back a bit on stock holdings. Longer term I am a bull.
 
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%. In 2017 Technology (XLK) was ranked in the top 3 Momentum Plays for 52% of all trading days in 2017 (if I counted correctly.) XLK was up 35% on the year while the S&P 500 was up 18%.
*For additional background on the ETF ranking system see NTSM Page at…
 
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. Avoid GE and Merck. Their 120-day moving average is falling.
*I rank the Dow 30 similarly to the ETF ranking system. For more details, see NTSM Page at…
 
THURSDAY MARKET INTERNALS (NYSE DATA)
Market Internals remained Positive 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                                                        
Thursday, Price and Volume indicators were positive; Sentiment & VIX indicators were neutral. This adds up to a BUY indication, but at this point a BUY signal is meaningless.  The NTSM system is designed to issue BUY signals near a Bottom as conditions rapidly improve.  Now, it is just an indication that the market is doing well.  The NTSM long-term signal can sometimes signal BUY at the top if conditions are too good. The last actionable Buy signal was on 15 November 2016.
MY INVESTED STOCK POSITION:
TSP (RETIREMENT ACCOUNT – GOV EMPLOYEES) ALLOCATION
I remain FULLY INVESTED at 50% stocks in the S&P 500 Index fund (C-Fund) with the remainder is 50% G-Fund (Government securities). This is a conservative retiree allocation, but I consider it fully invested for my situation.

Wednesday, January 24, 2018

Home sales … Crude Inventories … DowDupont Praises Trump Strategy … Stock Market Analysis … ETF Trading … Dow 30 Ranking

HOME SALES (USA Today)
“In 2017 Technology (XLK) was ranked in the top 3 Momentum Plays for 52% of all trading days in 2017 (if I counted correctly.) XLK was up 35% on the year while the S&P 500 was up 18%.” Story at…
 
CRUDE INVENTORIES (OilPrice.com)
“A day after the American Petroleum Institute surprisedthe market with a substantial inventory build, the Energy Information Administration dispelled doubts about the balance between supply and demand by reporting a draw of 1.1 million barrels for the week to January 19.” Story at…
 
DOWDUPONT KUDOS FOR TRUMP (Seeking Alpha)
“Pres. Trump's approach to international trade is giving U.S. companies an unexpected boost when they negotiate overseas deals, DowDuPont (NYSE:DWDP) Chairman Andrew Liveris tells a panel at the World Economic Forum in Davos, Switzerland. U.S. companies have new leverage when negotiating with foreign countries, Liversis says, because countries now are concerned that if they fail to give American companies "a shot," their own firms could be denied opportunities in the U.S. “It’s had an unintended consequence, which is actually amazing,” Liveris says. “And maybe that, at the end of the day, is Pres. Trump’s strategy.” Story at…
 
MARKET REPORT / ANALYSIS         
-Wednesday the S&P 500 was down about a point to 2838.
-VIX was up about 3% to 11.47.
-The yield on the 10-year Treasury was little changed at 2.649%.
 
-My sum of 17 Indicators rose from +4 to +6 today. (A “+” number means that most indicators are bullish.) Longer term, the indicators are flat. There are plenty of bullish indicators: The late-day action is still headed up implying the Pros are neutral to Bullish.
 
I am bearish short-term – topping indicators still look stretched. Longer term I am a bull.
 
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%. In 2017 Technology (XLK) was ranked in the top 3 Momentum Plays for 52% of all trading days in 2017 (if I counted correctly.) XLK was up 35% on the year while the S&P 500 was up 18%.
*For additional background on the ETF ranking system see NTSM Page at…
 
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. Avoid GE and Merck. Their 120-day moving average is falling.
*I rank the Dow 30 similarly to the ETF ranking system. For more details, see NTSM Page at…
 
WEDNESDAY MARKET INTERNALS (NYSE DATA)
Market Internals switched to Positive 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                                                        
Wednesday, Price and Volume indicators were positive; Sentiment & VIX indicators were neutral. This adds up to a BUY indication, but at this point a BUY signal is meaningless.  The NTSM system is designed to issue BUY signals near a Bottom as conditions rapidly improve.  Now, it is just an indication that the market is doing well.  The NTSM long-term signal can sometimes signal BUY at the top if conditions are too good. The last actionable Buy signal was on 15 November 2016.
MY INVESTED STOCK POSITION:
TSP (RETIREMENT ACCOUNT – GOV EMPLOYEES) ALLOCATION
I remain FULLY INVESTED at 50% stocks in the S&P 500 Index fund (C-Fund) with the remainder is 50% G-Fund (Government securities). This is a conservative retiree allocation, but I consider it fully invested for my situation.