“The number of Americans seeking unemployment benefits
rose to the highest level in five weeks but still remained close to the recent
43-year lows. THE NUMBERS: Weekly applications for jobless benefits rose by
13,000 last week to 260,000…” Story at…
PHILADELPHIA FED (MarketWatch)
“Manufacturing activity pulled back modestly in the
Philadelphia region, but details of the report eased concerns about the
durability of the factory sector. The Philadelphia Federal Reserve Bank’s
monthly index on regional manufacturing fell to 9.7 in October from 12.8 in
September, which was the highest reading in 19 months…” Story at…
LEADING INDICATORS (Conference Board)
“The Conference Board Leading Economic Index® (LEI)
for the U.S. increased 0.2 percent in September to 124.4 (2010 = 100),
following a 0.2 percent decline in August, and a 0.5 percent increase in July. “The
U.S. LEI increased in September, reversing its August decline, which together
with the pickup in the six-month growth rate suggests that the economy should
continue expanding at a moderate pace through early 2017,” said Ataman
Ozyildirim, Director of Business Cycles and Growth Research at The Conference
Board.” Press release at…
CASS FREIGHT INDEX (CASS Information Systems)
“After offering a glimmer of ‘less bad’ hope in August
(only down 1.1% YoY and up 0.4% sequentially), the Cass Freight Index shipments
data in September disappointed, providing hindsight that August only gave us
‘false hope.’ September data is once again signaling that overall shipment
volumes (and pricing) continued to be weak in most modes, with increased levels
of volatility…” Press release at…
Year-over year shipments were down -3.1%; Expenditures
were down -3.8%.
REVERSIONS AND RATES (Real Investment Advice)
“…’warning’ signals suggest the risk of a market
correction is on the rise. However, all price trends remain within the confines
of a bullish advance. Therefore, while portfolios should remain tilted
toward equity exposure ‘currently,’ the risk of a sizable correction has risen
markedly in recent months…if the FOMC begins to raise short-term interest
rates further, the current environment is actually worse now than December of
2014 when the first hike was done. Economic growth is weaker, corporate
profits have declined, debt and leverage are at or near record levels, the US Dollar
is stronger and markets are starved for liquidity. This suggests, that further
increases in interest rates may not go so smoothly in terms of the impact
on financial asset prices.” – Lance Roberts. Commentary at…
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 slipped about 0.1% to 2141.
-VIX fell about 5% to 13.76 near the close.
-The yield on the 10-year Treasury remained 1.75%.
“Money Trend” was up; “Sum of all indicators” was up. The
“Smart Money” indicator (late day action) was still trending down as of Thursday’s
close and Late-day-selling continued today.
As I noted yesterday, one troubling near-term sign: my
calm-before-the-storm indicator flashed red Wednesday and it remains red
Thursday. It is based on statistical analysis of market action and it is
suggesting that there may be trouble ahead. Another VXX trade may be possible
and I’ll need to be cautious with my 2xDow trade I established Tuesday.
Long-term, I’m fully invested at 50% in stocks (a
conservative-retiree allocation) – I’m hold-my-nose bullish.
TRADING PORTFOLIO
2x Dow (DDM) Established 18 Oct.
(I am trading more than I like to in an effort to regain
losses from holding my short too long after the February correction. So far,
it has not worked out. Actually, I am up 3.2%, but with 3-straight losing
trades it has been disheartening.)
THURSDAY MARKET INTERNALS (NYSE DATA)
-10-day moving average of the percentage of stocks
advancing (NYSE): 48%. (48.3% yesterday.) A number below 50% is usually BEARISH
for the markets short-term.
-150-day moving average of advancing stocks: 53.3%. (A
value above 50% indicates a long-term, up-trend.)
-McClellan Oscillator: improved from +3 to -7 (percentage
calculation method).
-New-highs minus new-lows: 54 (It was 75 Tuesday.)
-10-day moving average of the change in spread: -1. In
other words, over the last 10-days, on average, the spread has declined by 1
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
Thursday 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.
