Saturday, December 31, 2016

Chicago PMI … Stock Market Analysis … ETF Ranking ... NYSE is closed Monday

Happy New Year - May it be joyous and prosperous! 
CHICAGO PMI (MarketWatch)
“A measure of Midwest economic activity slipped in December after touching a near two-year high the month before. The Chicago PMI fell 3 points to 54.6…” Story at…
MARKET REPORT / ANALYSIS        
-Friday the S&P 500 was down about 0.8% to 2250.
-VIX rose about 5% to 14.04.
-The yield on the 10-year Treasury slipped to 2.45%.

Lowry Research is a stock market research firm.  One of their methodologies involves calculating the supply and demand for each operating company on the NYSE based on buy-sell data each day.  The data can be aggregated into an overall view of the market or for making stock-specific, buy-sell recommendations.  It is possible to construct an indicator to approximate their method with considerably less accurate results; but that does not mean a simpler Macro examination is not useful. My Money Trend indicator is designed along those lines. It has been trending down for some time (as I have reported regularly here), but I see that the numbers reached extremes associated with Tops last week.  My topping indicator has been saying the same thing for a month. I would not be surprised to see a pullback start after the New Year, say, Tuesday? We’ll see. Some of the other indicators look more positive, but it is hard to place too much faith in ANY indicators due to the Holiday low volumes.
We can look for momentum signs in Friday’s late-day action, but late-day action was mixed Friday. There was a 5 pt. rally in the last 10-minutes of the trading day that was bullish.  Oddly, there was also a large minus Tick, -521.  That means that the sum of all “last-trades-of-the-day” was decidedly negative. So, we’ll wait for Tuesday.
I still have short positions in the trading portfolio.
Long-term I’m fully invested at 50% in stocks (a conservative-retiree allocation).  The long-term trend remains up.

CURRENT RANKING OF 11 ETFs (Ranked Daily)*
#1 RANK for the past 39-days: Financial Select Sector SPDR ETF (XLF).
#2 RANK: iShares Russell 2000 – Small Cap (IWM)
#3 RANK: Energy Select Sector SPDR ETF (XLE)
While the XLF remains ranked #1 using the methodology explained at the link below, IWM is outperforming the others over the past 3-weeks on a percentage gained basis.
*For background on the ETF ranking system see NTSM Page at…

TRADING PORTFOLIO (Small-% of the total portfolio)*
Long Volatility ETF (VXX): Established 5 Aug. SOLD 15 Sep. Gain: +6.6%.
2x S&P 500 ETF (SSO): Established 22 Sep. SOLD 7 Oct. Loss: -1.5%.
2x Short S&P 500 (SDS): Established 7 Oct. SOLD 10 Oct. Loss: -1.4%.
2x Short Dow 30 (SDOW): Established 17 Oct. SOLD 18 Oct Loss: -0.4%
2x Dow ETF (DDM) Established 18 Oct. SOLD 21 Oct Loss: -0.9
2x S&P 500 ETF (SSO) Established 9 Nov. SOLD 10 Nov Gain: +3.5%
2x S&P 500 ETF (SSO) Established 15 Nov. SOLD 22 Nov. Gain: +2.3%
Financial Select Sector SPDR ETF (XLF) Est. 1 Dec.SOLD 19 Dec Gain: +1.7%
2x Short S&P 500 (SDS): Established 6 Dec.
2x Short S&P 500 (SDS): Established 16 Dec.
Long Volatility ETF (VXX): Established 7 Dec. SOLD 9 Dec. Loss:  -1.2%  
NET: +8.7%
Market Internals were 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, the Volume indicator was neutral. The Price and VIX indicators were positive. The Sentiment indicator was negative.
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) Friday, 23 Sep 2016 in my long-term accounts. Remainder is 50% G-Fund. This is a conservative retiree allocation.
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Thursday, December 29, 2016

Jobless Claims … Crude Inventories … Markets Closed Monday

JOBLESS CLAIMS (Bloomberg)
“Filings for U.S. unemployment benefits fell for a third week in the last four, showing a resilient labor market. Jobless claims declined by 10,000 to 265,000 in the week ended Dec. 24…” Story at…

CRUDE INVENTORIES (OilPrice.com)
“The American Petroleum Institute’s (API) weekly report showed build of 4.2 million barrels to the United States’ commercial crude inventories, instead of an expected 1.5 million-barrel draw.” Story at…

It’s a busy day today so no time to do a detailed report.  Short-term indicators have improved a little as of Thursday morning, but they will be influenced by today’s data. A down day is likely to push the data down. Next Tuesday it will be important to see what happens when the Pros come back from vacation.

I am still holding short-positions in the Trading Portfolio.

Long Term indicators won’t change no matter what happens today and I remain long.
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Wednesday, December 28, 2016

Pending Home Sales … Manufacturing Improves … Stock Market Analysis … ETF Ranking

PENDING HOME SALES (ABC News)
“Fewer Americans signed contracts to buy homes in November. The decrease likely reflects the drag caused by rising mortgage rates and the shallow inventory of properties on the market. The National Association of Realtors said Wednesday that its seasonally adjusted pending home sales index fell 2.5 percent…” Story at…

MANUFACTURING (Advisor Perspectives)

MARKET REPORT / ANALYSIS       
-Wednesday the S&P 500 was down about 0.8% to 2250.
-VIX rose about 8% to 11.99.
-The yield on the 10-year Treasury dropped to 2.51%.

“If everybody’s optimistic, who is left to buy?” - Sam Stovall, investment strategist for Standard & Poor’s

Sentiment is now giving a Bearish signal with a high 80%-Bulls reading. 

My SUM of 15-Indicators continues to fall.  I smooth the data by taking a sum over 10-days. 2-weeks ago the 10-day value was +48.  It is now -15. This is a pretty good indication that the trend remains down and suggests further downside ahead.

Long-term I’m fully invested at 50% in stocks (a conservative-retiree allocation).  The long-term trend remains up.

CURRENT RANKING OF 11 ETFs (Ranked Daily)*
#1 RANK for the past 37-days: Financial Select Sector SPDR ETF (XLF).
#2 RANK: iShares Russell 2000 – Small Cap (IWM)
#3 RANK: Energy Select Sector SPDR ETF (XLE)
While the XLF remains ranked #1 using the methodology explained at the link below, IWM is outperforming the others over the past 3-weeks on a percentage gained basis.
*For background on the ETF ranking system see NTSM Page at…

TRADING PORTFOLIO (Small-% of the total portfolio)*
Long Volatility ETF (VXX): Established 5 Aug. SOLD 15 Sep. Gain: +6.6%.
2x S&P 500 ETF (SSO): Established 22 Sep. SOLD 7 Oct. Loss: -1.5%.
2x Short S&P 500 (SDS): Established 7 Oct. SOLD 10 Oct. Loss: -1.4%.
2x Short Dow 30 (SDOW): Established 17 Oct. SOLD 18 Oct Loss: -0.4%
2x Dow ETF (DDM) Established 18 Oct. SOLD 21 Oct Loss: -0.9
2x S&P 500 ETF (SSO) Established 9 Nov. SOLD 10 Nov Gain: +3.5%
2x S&P 500 ETF (SSO) Established 15 Nov. SOLD 22 Nov. Gain: +2.3%
Financial Select Sector SPDR ETF (XLF) Est. 1 Dec.SOLD 19 Dec Gain: +1.7%
2x Short S&P 500 (SDS): Established 6 Dec.
2x Short S&P 500 (SDS): Established 16 Dec.
Long Volatility ETF (VXX): Established 7 Dec. SOLD 9 Dec. Loss:  -1.2%  
NET: +8.7%
MARKET INTERNALS: 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 Volume indicator was neutral. The Price and VIX indicators were positive. The Sentiment indicator was negative.
NTSM LONG TERM INDICATOR: HOLD.

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) Friday, 23 Sep 2016 in my long-term accounts. Remainder is 50% G-Fund. This is a conservative retiree allocation.
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Tuesday, December 27, 2016

Michigan Sentiment … New Home Sales … Stock Market Analysis … ETF Ranking

CONSUMER CONFIDENCE (USA Today)
“Consumer confidence reached another post-recession high in December, as the stock market soared to a new record after the election of Donald Trump and the outlook for the job market remains robust. The Conference Board said Tuesday its consumer confidence index increased to 113.7 in December…” Story at… 

MARKET REPORT / ANALYSIS       
-Tuesday the S&P 500 was up about 0.2% to 2269.
-VIX rose about 5% to 11.99. (The options Boys seem worried.)
-The yield on the 10-year Treasury rose to 2.56%.

“If everybody’s optimistic, who is left to buy?” - Sam Stovall, investment strategist for Standard & Poor’s

Sentiment is now giving a Bearish signal with a high 80%-Bulls reading.  In addition there is also a Low percentage of Bears and that also is an extreme reading that is bearish. The %-Bulls signal is a long-term signal that occurs somewhat rarely since it is based on a standard deviation comparison to the extremes seen in the dot.com bubble. In theory, Sentiment is signaling a Major Top. Without other long-term signals concurring, it will not trigger a “sell” on the long–term NTSM system. Sentiment is not tradable by itself and it must be confirmed by other signals
Short-term not much has changed. Signals still suggest a short-term top and I continue to expect to see the Index fall 4-5% from its high.

Long-term I’m fully invested at 50% in stocks (a conservative-retiree allocation).  The long-term trend remains up.

CURRENT RANKING OF 11 ETFs (Ranked Daily)*
#1 RANK for the past 31-days: Financial Select Sector SPDR ETF (XLF).
#2 RANK: iShares Russell 2000 – Small Cap (IWM)
#3 RANK: Energy Select Sector SPDR ETF (XLE) The # 2 and #3 ETFs switched again. While the XLF remains ranked #1 using the methodology explained at the link below, IWM is outperforming the others over the past 3-weeks on a percentage gained basis.
*For background on the ETF ranking system see NTSM Page at…

TRADING PORTFOLIO (Small-% of the total portfolio)*
Long Volatility ETF (VXX): Established 5 Aug. SOLD 15 Sep. Gain: +6.6%.
2x S&P 500 ETF (SSO): Established 22 Sep. SOLD 7 Oct. Loss: -1.5%.
2x Short S&P 500 (SDS): Established 7 Oct. SOLD 10 Oct. Loss: -1.4%.
2x Short Dow 30 (SDOW): Established 17 Oct. SOLD 18 Oct Loss: -0.4%
2x Dow ETF (DDM) Established 18 Oct. SOLD 21 Oct Loss: -0.9
2x S&P 500 ETF (SSO) Established 9 Nov. SOLD 10 Nov Gain: +3.5%
2x S&P 500 ETF (SSO) Established 15 Nov. SOLD 22 Nov. Gain: +2.3%
Financial Select Sector SPDR ETF (XLF) Est. 1 Dec.SOLD 19 Dec Gain: +1.7%
2x Short S&P 500 (SDS): Established 6 Dec.
2x Short S&P 500 (SDS): Established 16 Dec.
Long Volatility ETF (VXX): Established 7 Dec. SOLD 9 Dec. Loss:  -1.2%  
NET: +8.7%
MARKET INTERNALS: NEUTRAL
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 Volume indicator was neutral. The Price and VIX indicators were positive. The Sentiment indicator was negative.
NTSM LONG TERM INDICATOR: HOLD.

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) Friday, 23 Sep 2016 in my long-term accounts. Remainder is 50% G-Fund. This is a conservative retiree allocation.
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Friday, December 23, 2016

Michigan Sentiment … New Home Sales … Stock Market Analysis … ETF Ranking

MICHIGAN SENTIMENT – HIGHEST IN 12-YEARS (MarketWatch)
The surge in consumer confidence seen since the presidential election continued in late December, according to a report from the University of Michigan released Friday. The final December reading on consumer sentiment rose to 98.2 in December, up both from the preliminary reading of 98 earlier in the month and November’s final reading of 93.8…” Story at…
http://www.marketwatch.com/story/consumers-sentiment-hits-highest-level-in-12-years-in-december-2016-12-23
 
NEW HOME SALES
“New U.S. single-family home sales rose [to] their highest level in four months, likely as expectations of higher mortgage rates drew buyers into the market. The Commerce Department said on Friday new home sales increased 5.2 percent to a seasonally adjusted annual rate of 592,000 units last month.” Story at… 
http://www.cnbc.com/2016/12/23/new-home-sales-reported-for-november-2016.html
 
MARKET REPORT / ANALYSIS       
-Friday the S&P 500 was up about 0.1% to 2264 at the close
-VIX rose about 0.1% to 11.44. 
-The yield on the 10-year Treasury slipped to 2.54%.
 
“If everybody’s optimistic, who is left to buy?” - Sam Stovall, investment strategist for Standard & Poor’s
 
Signals still suggest a short-term top and I continue to expect to see the Index fall 4-5% from its high. Money Trend and the SUM of 16-Indicators are both falling hard. I also noticed that Wednesday was a high-down-volume day and that can be a bad sign for the bulls especially if we see another one soon.
 
Long-term I’m fully invested at 50% in stocks (a conservative-retiree allocation).  The long-term trend remains up.
 
CURRENT RANKING OF 11 ETFs (Ranked Daily)*
#1 RANK for the past 31-days: Financial Select Sector SPDR ETF (XLF).
#2 RANK: Energy Select Sector SPDR ETF (XLE)
#3 RANK: iShares Russell 2000 – Small Cap (IWM)
The # 2 and #3 ETFs switched again. While the XLF remains ranked #1 using the methodology explained at the link below, IWM is outperforming the others over the past 3-weeks on a percentage gained basis.
*For background on the ETF ranking system see NTSM Page at…
http://navigatethestockmarket.blogspot.com/p/exchange-traded-funds-etf-ranking.html
 
TRADING PORTFOLIO (Small-% of the total portfolio)*
Long Volatility ETF (VXX): Established 5 Aug. SOLD 15 Sep. Gain: +6.6%.
2x S&P 500 ETF (SSO): Established 22 Sep. SOLD 7 Oct. Loss: -1.5%.
2x Short S&P 500 (SDS): Established 7 Oct. SOLD 10 Oct. Loss: -1.4%.
2x Short Dow 30 (SDOW): Established 17 Oct. SOLD 18 Oct Loss: -0.4%
2x Dow ETF (DDM) Established 18 Oct. SOLD 21 Oct Loss: -0.9
2x S&P 500 ETF (SSO) Established 9 Nov. SOLD 10 Nov Gain: +3.5%
2x S&P 500 ETF (SSO) Established 15 Nov. SOLD 22 Nov. Gain: +2.3%
Financial Select Sector SPDR ETF (XLF) Est. 1 Dec.SOLD 19 Dec Gain: +1.7%
2x Short S&P 500 (SDS): Established 6 Dec.
2x Short S&P 500 (SDS): Established 16 Dec.
Long Volatility ETF (VXX): Established 7 Dec. SOLD 9 Dec. Loss:  -1.2%  
NET: +8.7%
Market internals improved slightly because advancers improved on a 10-day basis.
MARKET INTERNALS - NEUTRAL
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 the Sentiment and Volume indicators were neutral. The Price and VIX indicators were positive. Overall the long-term indicator switched to BUY. The important buy-signal was last August and September.  The buy-signal now just reflects that market conditions have been positive recently.  Since I think the market is near a short-term top, I don’t see this as a good time to buy.
NTSM LONG TERM INDICATOR - BUY WAITING FOR PULLBACK
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) Friday, 23 Sep 2016 in my long-term accounts. Remainder is 50% G-Fund. This is a conservative retiree allocation.
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Thursday, December 22, 2016

GDP-3rd Estimate … Durable Goods Orders … Leading Economic Indicators … Personal Spending …Stock Market Analysis … ETF Ranking

I’ll be busy over the Holidays so expect a condensed version of the NTSM Blog and missed days here and there.
 
“…historical insight from a few so-called experts:
“We will not have any more crashes in our time.”- John Maynard Keynes 1927
“There is no cause to worry. The high tide of prosperity will continue” - Andrew Mellon 1929
“Stock prices are likely to moderate in the coming year but that doesn’t mean the party is coming to an end.” - Phil Dow 1999
“The Federal Reserve is not currently forecasting a recession.”- Ben Bernanke 2008
From Real Investment Advice commentary titled, “Deception” at…
 
GDP (MarketWatch)
“The U.S. economy grew faster than previously thought between July and September, its best performance in two years, buoyed by stronger consumer spending, the government reported Thursday. The Commerce Department said the economy expanded at a seasonally adjusted 3.5% annualized rate in the third quarter.” Story at….
 
DURABLE GOODS ORDERS (WSJ)
“Orders for durable goods—products designed to last longer than three years, such as trucks or computers—declined 4.6% from a month earlier to a seasonally adjusted $228.17 billion, the Commerce Department said Thursday.” Story at…
 
LEADING ECONOMIC INDICATORS (Conference Board)
“The Conference Board Leading Economic Index® (LEI) for the U.S. was unchanged in November, remaining at 124.6 (2010 = 100), following a 0.1 percent increase in October, and a 0.3 percent increase in September.” Press release at…
 
PERSONAL SPENDING (ABC News)
“Consumers slowed the growth in their spending in November and income growth was flat, two worrisome signs at the start of the holiday shopping season.
Consumer spending rose 0.2 percent in November…” Story at…
 
MARKET REPORT / ANALYSIS        
-Thursday the S&P 500 was down about 0.2% to 2261 at the close
-VIX rose about 1% to 11.43. 
-The yield on the 10-year Treasury was unchanged at 2.55%.
 
Sentiment (%-Bulls calculated from Invested Funds in selected Rydex/Gugenheim Funds {Bulls/(Bulls+Bears}) was below 50% a day before the recent top on 13 December.  1-week later Sentiment is pushing 80%-Bulls at the close Wednesday.  The 5-day reading may actually turn to sell soon if the bullish trend continues.  The one thing that jumps out is that the shorts capitulated (sold their short positions) the day before the recent top, proving once again that short-term timing is a very difficult job. I use Sentiment as a long-term indicator and even if Sentiment does turn bearish, it won’t affect the long-term outlook unless other long-term indicators join the party.
 
Other signals still suggest a short-term top and I continue to expect to see the Index fall 4-5% from its high.
 
Long-term I’m fully invested at 50% in stocks (a conservative-retiree allocation).  The long-term trend remains up.
 
CURRENT RANKING OF 11 ETFs (Ranked Daily)*
#1 RANK for the past 31-days: Financial Select Sector SPDR ETF (XLF).
#2 RANK: iShares Russell 2000 – Small Cap (IWM)
#3 RANK: Energy Select Sector SPDR ETF (XLE)
*For background on the ETF ranking system see NTSM Page at…
 
TRADING PORTFOLIO (Small-% of the total portfolio)*
Long Volatility ETF (VXX): Established 5 Aug. SOLD 15 Sep. Gain: +6.6%.
2x S&P 500 ETF (SSO): Established 22 Sep. SOLD 7 Oct. Loss: -1.5%.
2x Short S&P 500 (SDS): Established 7 Oct. SOLD 10 Oct. Loss: -1.4%.
2x Short Dow 30 (SDOW): Established 17 Oct. SOLD 18 Oct Loss: -0.4%
2x Dow ETF (DDM) Established 18 Oct. SOLD 21 Oct Loss: -0.9
2x S&P 500 ETF (SSO) Established 9 Nov. SOLD 10 Nov Gain: +3.5%
2x S&P 500 ETF (SSO) Established 15 Nov. SOLD 22 Nov. Gain: +2.3%
Financial Select Sector SPDR ETF (XLF) Est. 1 Dec.SOLD 19 Dec Gain: +1.7%
2x Short S&P 500 (SDS): Established 6 Dec.
2x Short S&P 500 (SDS): Established 16 Dec.
Long Volatility ETF (VXX): Established 7 Dec. SOLD 9 Dec. Loss:  -1.2%  
NET: +8.7%
 
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 the Sentiment, Volume and VIX indicators were neutral. The Price indicator was positive. Overall the long-term indicator remained HOLD.
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) Friday, 23 Sep 2016 in my long-term accounts. Remainder is 50% G-Fund. This is a conservative retiree allocation.
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