“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.
