“Small-business confidence hit a record high in 2017,
according to the National Federation of Independent Businesses…The index came
in at 104.9 in December.” Story at…
JOLTS (Morningstar)
"The number of job openings in the U.S. fell to a
six-month low of 5.88 million in November from 5.93 million in the prior month.
The chief reason: Another late-in-the-year hiring surge.” Story at…
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 was up about 0.2% to 2748.
-VIX was up about 3% to 9.52.
-The yield on the 10-year Treasury rose to 2.488%.
My sum of 17 Indicators slipped from +5 to +3 today. On a
10-day basis, values are falling. A “+” number means that most indicators are
bullish.
A number of short-term Indicators have been pointing down
for a while; to make matters worse, today was the first day (in a while) that we’ve
seen the number of declining stocks higher than advancing stocks and declining-volume
higher than advancing-volume on the day. This shift in the daily data can sometimes
indicate a shift in market action, i.e., it may indicate a shift down for the markets.
I really don’t know – the bullish trend has been fighting the indicators (and
winning) for much of 2017. 75% of the ETFs I track have been up over the last
2-weeks; that hardly looks like a market that will crack soon, but we’ll see.
I am slightly bearish short-term; longer term I am a
bull, but I recommend caution with the Fed raising rates and shrinking its
balance sheet. In addition, we are due for a correction in 2018 due to
Presidential election cycle history.
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…
Energy (XLE) was #1. The markets are due for some
reversion so perhaps I’ll get a better buying opportunity later. I’ll wait before adding any positions. (I
hold XLK, DVY and SPY. DVY is a dividend play. SPY is a good core holding.)
Under my system 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.
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.
Caterpillar remained #1.
I hold Intel – I’m waiting for a better entry point
before adding other positions. Intel is now a value play so I am holding it…BUT…selling
in INTEL has picked up again and if it continues down it needs to be sold…perhaps
soon…
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…
TUESDAY MARKET INTERNALS (NYSE DATA)
Market Internals slipped
to 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
Tuesday, Price indicator was positive; Sentiment was negative;
Volume & VIX indicators were neutral. With VIX recently below 10 for a couple of
days each month from May thru December 2017, and now January 2018, 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.
VIX below 10 last occurred about 4-months before the year 2007 crash and also
several months before the 2001 crash. 6-months with VIX below 10 is
unprecedented in the last 20-years.
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.
