“Sales at U.S. retailers rose more than forecast last
month in a broad advance after an even stronger September than initially
estimated, showing consumers continue to pump up the economy. A 0.8 percent
rise in October followed an upwardly revised 1 percent jump in the prior month,
marking the biggest back-to-back increase since March-April 2014…” Story at…
EMPIRE MANUFACTURING (Advisor perspectives)
“Business activity stabilized in New York State,
according to firms responding to the November 2016 Empire State Manufacturing Survey. The headline
general business conditions index climbed out of negative territory for the
first time in four months, rising eight points to 1.5…” Commentary at…
BUSINESS INVENTORIES (Seattle Times)
“U.S. businesses boosted their stockpiles by a slight
amount in September while their sales increased by the most in three months. The
Commerce Department says business inventories edged up 0.1 percent in
September, slower than the 0.2 percent gain seen in August.” Story at…
BULLS: JEFFREY SAUT COMMENTARY (Raymond James)
“Whenever a market rallies on news that is still, at
best, a high uncertainty event, it is generally a very bullish sign and implies
a strong market. I won’t go so far as to call this a rule because no one has
ever presented me with a stock market rulebook, but it does lead us to believe
the probabilities favor higher prices over the coming months even if we are now
a tad overbought in the short term. Also, the fact that we never even got a
buyable dip post-election (unless you happen to trade futures), strengthens the
argument that stocks want to keep moving higher, in our view.” Commentary at…
BEARS: TRUMP STOCK MARKET – REVERSAL DOWN MOST LIKELY
SCENARIO (SafeHaven)
“…a reversal lower from here as part of a Left Translated
Cycle is the highest probability scenario for equities. But the highest
probability scenario does not always come to pass. If, instead of rolling over,
the market moves to a new all-time high, we will need to quickly change our
perspective.” Commentary at…
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 was up 0.75% to 2180 on the day.
-VIX dropped about 8% to 14.53 at the close.
-The yield on the 10-year Treasury was up again to 2.24%.
Oil reversed yesterday’s fall and rallied strongly Tuesday on rumors
that there will be an agreement to limit production by the oil cartel. This may
clear the way for the S&P 500 to rally strongly into the next OPEC meeting
on 30 November.
It looks like the Index can make new highs. The old level is 2090. I keep hearing this
rally is all about the election; I think it is about the “correction” that
ended Friday 4 November, before the election.
For the discussion of why I called it a correction see yesterday’s blog
under BULLISH INDICATIONS.
I took a Trading-position very late in the day in the S&P
500 2x ETF (SSO) based on oil gains. I didn’t have time to post my move before
the clos; it was a busy day.
See yesterday’s blog for a discussion of Bullish Indications
and Bearish Indications.
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, but for now I still think the trend remains up.
TRADING PORTFOLIO (Small-% of the total portfolio)
2x S&P 500 ETF (SSO) Established 15 Nov.
TUESDAY MARKET INTERNALS (NYSE DATA)
-10-day moving average of the percentage of stocks
advancing (NYSE): 53.4 %. (48.6 % yesterday.) A number above 50% is usually BULLISH
for the markets short-term.
-150-day moving average of advancing stocks: ROSE to 52.6%.
(A value above 50% indicates a long-term, up-trend.)
-McClellan Oscillator: improved from +21 to +89
(percentage calculation method adjusted to fit McClellan’s values).
-New-highs minus new-lows: +98 (It was +21 yesterday.)
-10-day moving average of the change in spread: +15. In
other words, over the last 10-days, on average, the spread has increased by 15
each day.
Market Internals
remained Positive 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
Tuesday the Sentiment indicator was neutral. The Price
and Volume indicators were positive. The VIX indicator was neutral. Overall the
long-term indicator switched to 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.
