“The number of Americans filing applications for unemployment benefits fell to the lowest level in five weeks, another sign of endurance in the labor market. Jobless claims dropped by 1,000 to 261,000 in the week ended Aug. 20…” Story at…
http://www.bloomberg.com/news/articles/2016-08-25/jobless-claims-in-u-s-decline-to-lowest-level-in-five-weeks
DURABLE GOODS ORDERS (Business Insider)
Durable goods orders rose 4.4% in July, according to an advance report from the Department of Commerce… A downward revised print for June showed that orders fell 4.2%...” Story at…
http://www.businessinsider.com/durable-goods-orders-advance-report-for-july-2016-2016-8
Much of the prior decline in orders may have been due to oil services. Since oil production is beginning to pick up (surprisingly) the article suggests the bottom is in for orders. Durable goods orders are still down 3.3% compared to last year.
KANSAS CITY FED MANFACTURING (Wichita Eagle)
“Manufacturing levels in the Kansas City Federal Reserve Bank district declined in June, after last month’s brief rebound, resuming a more than year-long down trend, according to the bank’s monthly survey. The downturn in the energy and agriculture sectors which has hurt the region for more than [a] year may be spreading to other sectors…” Story at….
http://www.kansas.com/news/business/agriculture/article92341797.html
My cmt: The article went on to note that expectations for future activity was high.
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 was down about 0.1% to 2172.
-VIX rose about 1% to 13.63.
-The yield on the 10-year Treasury rose to 1.58%.
Broken Record Report: The 10-dMA of Tick (sum of closing up minus down trades) was again over 300 for the sixth day in a row and that is a bearish sign according to Tom McClellan. Short-term indicators are pointing down. My bearish short-term stance remains and I suspect this week will be down.
VXX TRADE:
Today, the calm-before-the-storm indicator (low standard of deviation in recent market moves) still remains down and that suggests that VXX remained a buy as of Thursday’s close. It’s a better buy today than when I first bought it about 3-weeks ago and VIX is nearly the same value as it was then. Unfortunately, VXX is down about 3%, because it doesn’t always closely track VIX. In addition VXX will only move about half of VIX.
I plan to exit this trade when I have a statistical “BUY” indication in price-volume. Currently, it would take about a one-day 1.5% drop in the S&P 500 to generate a Buy signal. If it happens, I would expect to generate a decent profit on the VXX trade. Whether that would also be a good point to exit short positions remains to be seen.
SHORT TRADE
I am still holding short positions, but I did exit some of the short positions and transitioned into VXX. (This books a loss for the trade for tax purposes and maintains a bearish stance.) I caution again to take it easy on this high risk stuff.
MONEY TREND INDICATOR
My short-term Money Trend indicator can be volatile; Thursday it is trending down more steeply; a bearish indication.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of the percentage of stocks advancing (NYSE) dipped to 51.1% Thursday. It was 51.8% Wednesday. A number above 50% is usually GOOD news for the markets.
On a longer term, the 150-day moving average of advancing stocks dipped to 54.9%. A value above 50% generally indicates an up-trend. The McClellan Oscillator improved slightly from -29 to -24.
New-highs outpaced New-lows. The spread (new-highs minus new-lows) improved slightly to +106 Thursday. (It was +102 Wednesday.) The 10-day moving average of the change in spread was minus-10. In other words, over the last 10-days, on average, the spread has decreased by 10 each day. Market Internals remained 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
Thursday the Price indicators was positive; Sentiment, VIX and & Volume indicators were neutral. The long-term indicator is HOLD. The important Buy-signal was in June and before that at the bottom in February (Too bad I was too stupid to follow my own system!).
MY INVESTED STOCK POSITION:
TSP (RETIREMENT ACCOUNT – GOV EMPLOYEES) ALLOCATIONOn 12 July I increased my invested position in my retirement account to 25% invested in stocks thru an S&P 500 Index fund (“C”-fund in the TSP). I added to that position Thursday 21 July bringing my invested total up to 40% in stocks. I expect to add more stocks should we get the anticipated pullback.
The NTSM system indicated Buy at the 11 Feb bottom; and again 2-days after the bottom on high up-volume; and from 22 Feb thru 25 April. I ignored the early signals convinced that it was a bear market bounce; I ignored more recent signals due to overbought conditions. I’m following my system now, especially since the Index has climbed above my initial sell-point of 2100 on the S&P 500 back in November 2015.
