“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.
