“US gross domestic product
grew at an annualized rate of 2.9% in the third quarter, its fastest in two
years, according to the advance estimate released Friday.” Story at…
MICHIGAN SENTIMENT (Bloomberg)
“Consumer confidence dropped more than previously
reported to match the lowest level since 2014, with Americans less upbeat about
both current and future conditions in the weeks before the presidential
election. The University of Michigan said Friday that its final index of
sentiment fell to 87.2 from 91.2 in September.” Story at…
OFF TOPIC
Like the writer in the below piece, I am not voting for
either major party candidate (so don’t get your dander up); I just thought the
following article was interesting.
HOW OBAMA HELPED TRUMP WIN THE WHITEHOUSE (Safehaven)
“It is incredible to me, since I am just as cynical as
the rest of the electorate, that when the Affordable Care Act was passed the
open enrollment date was systematically placed just a few days before Election Day.
That was either great confidence ("this is going to be great! They'll love
us and vote for us!"), great hubris ("it doesn't matter whether this
works, the sheeple will vote for us anyway") or great carelessness
("oh, rats, didn't think of that"). Because we now know that over the
next several days, millions and
millions of Americans will
receive letters explaining to them that their existing plan will be
outrageously more expensive in 2017 – in some cases, premiums will double – or
may not be available at all.” – Michael Ashton. Commentary at…
My cmt: I have never understood how it makes economic
sense to cover people after they get sick. Imagine if you could buy car
insurance after you had an accident. Sure I completely understand why everyone
wants health insurance to cover pre-existing conditions, but can an
economically viable system be developed that will do it? Apparently, it’s not
Obamacare.
MARKET REPORT / ANALYSIS
-Friday the S&P 500 was down about 0.3% to 2126 on
the day.
-VIX rose about 5% to 16.12 near the close.
-The yield on the 10-year Treasury rose to 1.85%. (Bond
prices fall when yields rise. It’s
unusual to see Stock and Bond prices both falling. With the 10-year approaching
2% another bond-rout is apparently underway.)
S&P 500 fell nearly 1% after the FBI announced it was
looking into additional Clinton emails. It recovered some of the losses after
2PM. (Apparently, the market doesn’t like “The Donald.” Look at the bright
side. Clinton gets elected; Clinton gets
impeached; Tim Caine is President. Now that wasn’t so bad was it?)
Short-term indicators continue to be mixed.
The “Calm-Before-the-Storm” indicator (based on
statistical analysis of market action) was bearish again today. That VXX trade
is looking OK now. Too bad I didn’t take
it, but there still may be a better set-up coming.
Friday was the fourth straight down-day and that suggests
an up day Monday or a possible bigger breakdown ahead. For now, I’m guessing
Monday will be an up-day.
Both Bollinger Bands and RSI are bullish or very nearly
so. The INDUSTRIAL SELECT SECTOR SPDR ETF (XLI) is now
outperforming the S&P 500 on about half of the time frames I follow.
Yesterday it was underperforming them all from 10-days to 100-days. This is a mildly
bullish sign.
All-in-all…mixed short-term signals abound so I have not
taken a Trading Position.
Long-term, I’m fully invested at 50% in stocks (a
conservative-retiree allocation) – I remain “hold-my-nose” bullish. Amazon has
been one of the stalwarts of this market over the last 2-years. Their poor earnings report is disconcerting.
TRADING PORTFOLIO
FRIDAY MARKET INTERNALS (NYSE DATA)
-10-day moving average of the percentage of stocks
advancing (NYSE): 48.3%. (49.3% yesterday.) A number below 50% is usually
BEARISH for the markets short-term.
-150-day moving average of advancing stocks: 52.9%. (A
value above 50% indicates a long-term, up-trend.)
-McClellan Oscillator: declined from -41 to -45
(percentage calculation method).
-New-highs minus new-lows: -29 (It was -2 yesterday.) New-lows
again outpaced new-highs. This is a worrisome stat. New-hi/new-lo data is the battleship of
indicators. It is slow to turn and can
signal real trouble when it does. I’ll
give it another day or two before I panic.
-10-day moving average of the change in spread: -6. In
other words, over the last 10-days, on average, the spread has decreased by 6
each day.
Market Internals
remained 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 Price, VIX, Volume, & Sentiment indicators
were neutral. 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 in my long-term accounts
based on a number of indicators. Remainder is 50% G-Fund. This is a
conservative retiree allocation.
