Durable-goods
orders plunged 3.7% in January — the biggest decline since last
summer — largely because of a sharp drop in contracts for passenger planes that
was expected… Stripping out planes and cars, orders fell a much smaller 0.3%.”
Story at…
CONSUMER CONFIDENCE (Bloomberg)
“U.S. consumer confidence jumped to a 17-year high as
optimism about employment prospects grew and Americans began seeing additional
money in their paychecks from recently enacted tax cuts, data from the New
York-based Conference Board showed Tuesday… Confidence index rose to
130.8 (est. 126.5), highest since Nov. 2000…” Story at…
My take: Confidence hasn’t been this high since YEAR
2000. Seems like there was a little stock market trouble that year. For those who may have forgotten, that was
the year the Stock Market made all-time highs before the dot.com crash that
took the S&P 500 down 50%.
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 was down about 1.3% to 2744.
-VIX was up about 18% to 18.59.
-The yield on the 10-year Treasury rose to 2.898%. (If
the yield keeps rising I’ll be sorry I jumped back in.)
Of the 45-Issues I track (30 stocks and 15 ETFs) only 2
stocks (Intel and Boeing) were higher on the day. Intel was up 1.6% and that’s
huge on a day when the S&P 500 dropped 1.3%. On 23 Jan I wrote, “Intel
seems to have gotten past the recent chip design issues and investors have
apparently decided to move back into Intel. It’s up nearly 5% in the last 5-days
and may be worth another look. Low PE; Decent Dividend. The question mark
remains growth, but it did break out from a 3-year plateau and is above that
point now. It is still not a momentum play –it’s a value play at this point.”
Intel is up 9% since I made the comment.
Today, my sum of 17 Indicators slipped from +6 to +4
today. Positive numbers are bullish since this is just a sum of positive and
negative indicators. The smoothed version has remains up and is very bullish. The
Index remained above its 50-dMA.
I reduced stock holdings on 31 Jan with the S&P 500 at
2824. I bumped them up 10% so that I am now 50% invested in stocks as of 27 Feb
with the Index at 2744. I was hesitant, but the “correction” was odd on several
counts and its severity in such a short time may have been due to the options
blow-up and collapse of XIV. I am not
sure its over, but I didn’t have the patience to sit out any longer especially
since we were seeing positive signs in the indicators. Even with the positive signs
we’ve seen, it is very possible that this rally could still fail and retrace to
the prior bottom and I stated why in Friday’s blog. For now, I am cautiously
bullish, given the improvements we’ve seen in indicators. New-high/new-low data
has been especially bullish and we saw a bit more today.
Tuesday was a statistically-significant day. That just
means that the price-volume move down exceeded statistical parameters that I
track. The stats show that about 60% of the time a statistically significant
move down will be followed by an up-day the next day. Bottoms are usually
statistically significant so this might be a higher low and correction end.
Well see…
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…
#1. XLY is the Consumer Discretionary ETF. Charles Schwab
just rated the Consumer Discretionary sector as “Market Perform”. They said,
“The outlook for American consumer spending appears to us to be solid, with
consumer confidence strong, a tight labor market and wages trending higher.
However, spending on traditional retail items has been cautious and competition
among retailers may limit profitability.” More 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.
*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 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, VIX was
negative; Volume was positive; Sentiment and Price were neutral.
MY INVESTED STOCK POSITION:
TSP (RETIREMENT ACCOUNT – GOV EMPLOYEES) ALLOCATION
Today, 27
February, I increased stock holdings from 40% to 50% with the remainder in a
mix of stocks and (mostly short-term) bonds. (A comparable TSP allocation would
be 50% in the S&P 500 Index fund (C-Fund) with the remainder 50% G-Fund
(Government securities). This is a conservative retiree position.
