“The Consumer Price Index for Urban Consumers (CPI-U)
released this morning puts the year-over-year inflation rate at 1.64%. It is
substantially below the 3.79% average since the end of the Second World War and
its 10-year moving average, now at 1.78%.” Commentary at…
STOCK MARKET TO SOAR (Safeaven.com)
“…no bull market has ever ended on a sour note [My cmt:
They end in euphoria.] …the crowd is skittish even though the market is trading
close to its highs. This is an unprecedented development, and it means that
this bull market is going to soar to heights that only a man under the
influence of some strong medicine could envision today.” - Sol Palha. Commentary at…
MARKET REPORT / ANALYSIS
-Friday the S&P 500 was down about 0.1% to 2185 20
mins before the close.
-VIX was down about 2% to 13.05 at the close.
-The yield on the 10-year Treasury rose to 2.34%.
It’s a busy afternoon so this will be an abbreviated post
based on data as of about 3:30 PM.
The Fosbeck New-High New-Low Logic Index remained neutral
today. The trend in both new highs and
new lows exhibiting high numbers has fallen off. That’s good for the bulls.
The Advance/Decline ratio is still indicating overbought;
Bollinger Bands remain near the upper band, but RSI is not yet overbought so my
guess is that the market can go higher.
Now the S&P 500 is facing resistance at the prior high of 2190. Let’s
hope we move higher Monday.
One of my reliable Topping Indicators may switch to sell
soon. I can’t guess when or if it
will. I’ll close trading positions if it
does.
Friday Short-term indicators look good. Short term I have
a 2x S&P 500 ETF position in the Trading Portfolio.
Long term I’m fully invested at 50% in stocks (a
conservative-retiree allocation) – I remain “hold-my-nose” bullish. I continue to be concerned about rising
interest rates and the strengthening dollar, but for now I think the trend remains
up.
TRADING PORTFOLIO (Small-% of the total portfolio)
2x S&P 500 ETF (SSO) Established 15 Nov.
FRIDAY MARKET INTERNALS (NYSE DATA)
Market Internals are
Neutral on the market as of 3:30 PM. (Advancing
volume slipped on a 10-day basis.)
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 indicator was neutral. The Price and
Volume indicators were positive. The VIX indicator was neutral. Overall the
long-term indicator remained BUY. This just means that the conditions have been
positive recently. The actionable
buy-signal was last August and September.
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.
The Lance Roberts Bond
Commentary (yesterday’s blog in the Fosbeck Logic Index discussion) seems like
good advice to me. Lance Roberts’ strategy (Buy Bonds on the dip) gets ahead of
the curve, especially in my TSP (Gov 401k account) since I can’t hedge or short
in other ways. The Total Bond market ETF (BND) is down about 3% since
September. That’s the F-fund in the TSP. If stocks do fall Bonds will rise in
price and the yields will fall. The current yield is 2.4%. I’ll buy Bonds in
the retirement portfolio on a sell signal for stocks.
