“Federal Reserve officials, amid signs that the U.S.
economy soon could shed its long period of stagnation, approved the first
interest rate hike in a year Wednesday and said it foresees three more
increases next year…"What they did was highly anticipated. There was a
slight surprise in next year, looking at an additional rate hike," said
Myles Clouston, senior director of Nasdaq Advisory Services” Story at…
My cmt: Of course, the FED said future moves will be
“blah, blah, blah…data dependent…blah, blah, blah.”
RETAIL SALES (WSJ)
“An important measure of consumer spending cooled in
November compared with recent months, but was well up from a year earlier,
suggesting a modestly positive start to the holiday shopping season despite
election uncertainly early in the month.
Retail sales, a measure of purchases at stores,
restaurants and online, advanced a
seasonally adjusted 0.1% in November…” Story at…
PPI (MarketWatch)
“Inflation at the wholesale level in the U.S. rose
sharply in November, continuing a gradual upward trend that could translate
into higher prices for consumers in the near future. The producer-price index
jumped 0.4% in November…” Story at….
INDUSTRIAL PRODUCTION (Reuters via CNBC)
“U.S. industrial production fell 0.4 percent in November,
a bigger drop than anticipated, due to a steep decline in utility output and a
dip in manufacturing…” Story at…
CRUDE INVENTORIES
“U.S. commercial crude oil inventories (excluding those
in the Strategic Petroleum Reserve) decreased by 2.6 million barrels from the
previous week. At 483.2 million barrels, U.S. crude oil inventories are near
the upper limit of the average range for this time of year.” Story at…
The API report a day earlier indicated an inventory rise.
See…
MICHIGAN VOTER IRREGULARITIES (Detroit News/MishTalk)
“There’s always going to be small problems to some
degree, but we didn’t expect the degree of problem we saw in Detroit. This
isn’t normal,” said Krista Haroutunian, chairwoman of the Wayne County Board of
Canvassers…
…Detailed reports from the office of Wayne County Clerk
Cathy Garrett show optical scanners at 248 of the city’s 662 precincts, or 37
percent, tabulated more ballots than the number of voters tallied by workers in
the poll books. Voting irregularities in Detroit have spurred plans for an
audit by Michigan Secretary of State Ruth Johnson’s office, Elections Director
Chris Thomas said Monday. Democrat Hillary Clinton overwhelmingly prevailed in
Detroit and Wayne County.”
My cmt: In summary: More votes than voters…in Democratic precincts.
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 was down about 0.8% to 2253 at
the close. (The Index fell after the FED announcement.)
-VIX rose about 4% to 13.19 at the close.
-The yield on the 10-year Treasury rose to 2.53%.
Bearish Signs:
-Advancing volume turned down.
-Money Trend turned down and is now bearish
-The Sum of 16 Indicators went from +6 to -4.
-We saw significant late-day selling Wednesday and the
overall late-day trend remains down.
-The smoothed %-advancing stocks turned down.
-The Top Indicator is still signaling a top.
-New-High/New-low data is pointing down.
-XLI (cyclical industrials) is underperforming the
S&P 500 over the last month.
-The Index remains tight to the upper Bollinger Band and
RSI was a sell a few days ago.
Bullish Signs:
-Not many.
-The size of up-moves has been larger than the down-moves
over the last month, but that is a slow signal.
-Wednesday was a statistically significant down-day and,
in about 60% of the time, the next session is an up-day.
Given that Thursday would be expected to be an up-day
(based on the statistically significant down-day), I chose not to add to shorts
yet. Perhaps I will tomorrow, depending on price action, but especially if
there is late day selling.
The signals suggest a short-term top.
Long-term I’m fully invested at 50% in stocks (a conservative-retiree
allocation). The long-term trend remains
up.
TRADING PORTFOLIO (Small-% of the total portfolio)*
Financial Select Sector SPDR ETF (XLF) Est. 1 Dec.
2x Short S&P 500 (SDS): Established 6 Dec.
NET: +7.0%
*I am not really happy doing this much trading, but I
need to rebuild the trading balance after holding my shorts too long after the
February correction. (I really should
follow my own indicators. My system is smarter than I am!)
CURRENT RANKING OF 11 ETFs (Ranked Daily)*
#1 RANK for the past 27-days: Financial Select Sector
SPDR ETF (XLF).
#2 RANK: Energy Select Sector SPDR ETF (XLE)
#3 RANK: iShares Russell 2000 – Small Cap (IWM)
*For background on the ETF ranking system see NTSM Page
at…
This system is a momentum methodology that looks at
current price relative to past prices and picks a winner each day. I noticed
that the gain over the last 10-days or so has been greater for the IWM than the
XLF. That makes me wonder whether the
system should be refined by looking at how fast the various ETFs are
appreciating. I’ll keep that thought in
mind.
WEDNESDAY MARKET INTERNALS (NYSE DATA)
-10-day moving average of the percentage of stocks
advancing (NYSE): 53.9%. (55.8% yesterday.) A number above 50% is usually
BULLISH for the markets short-term.
-150-day moving average of advancing stocks: 52.6%. (A
value above 50% indicates a long-term, up-trend.)
-McClellan Oscillator: Fell from 96 to -15 (percentage
calculation method adjusted to fit McClellan’s values).
-New-highs minus new-lows: +34 (It
was +122 yesterday.)
-10-day moving average of the change in spread: -12. In
other words, over the last 10-days, on average, the spread has decreased by 12
each day.
Market Internals switched
to 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
Wednesday the Sentiment, Volume and VIX indicators were
neutral. The Price indicator was positive. Overall the long-term indicator
switched to 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 2016 in my long-term
accounts.
Remainder is 50% G-Fund. This is a conservative retiree allocation.
