“…historical
insight from a few so-called experts:
“We will not have
any more crashes in our time.”- John Maynard Keynes 1927
“There is no cause
to worry. The high tide of prosperity will continue” - Andrew Mellon 1929
“Stock prices are
likely to moderate in the coming year but that doesn’t mean the party is coming
to an end.” - Phil Dow 1999
“The Federal
Reserve is not currently forecasting a recession.”- Ben Bernanke 2008
From Real Investment Advice commentary titled, “Deception”
at…
GDP (MarketWatch)
“The U.S. economy grew faster than previously thought
between July and September, its best performance in two years, buoyed by
stronger consumer spending, the government reported Thursday. The Commerce Department said the economy expanded at a seasonally
adjusted 3.5% annualized rate in
the third quarter.” Story at….
DURABLE GOODS ORDERS (WSJ)
“Orders for durable goods—products designed to last
longer than three years, such as trucks or computers—declined 4.6% from a month
earlier to a seasonally adjusted $228.17 billion, the Commerce
Department said Thursday.” Story
at…
LEADING ECONOMIC INDICATORS (Conference Board)
“The Conference Board Leading Economic Index® (LEI)
for the U.S. was unchanged in November, remaining at 124.6 (2010 = 100),
following a 0.1 percent increase in October, and a 0.3 percent increase in
September.” Press release at…
PERSONAL SPENDING (ABC News)
“Consumers slowed the growth in their spending in
November and income growth was flat, two worrisome signs at the start of the
holiday shopping season.
Consumer
spending rose 0.2
percent in November…” Story at…
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 was down about 0.2% to 2261 at
the close
-VIX rose about 1% to 11.43.
-The yield on the 10-year Treasury was unchanged at 2.55%.
Sentiment (%-Bulls calculated from Invested Funds in
selected Rydex/Gugenheim Funds {Bulls/(Bulls+Bears}) was below 50% a day before
the recent top on 13 December. 1-week
later Sentiment is pushing 80%-Bulls at the close Wednesday. The 5-day reading may actually turn to sell
soon if the bullish trend continues. The
one thing that jumps out is that the shorts capitulated (sold their short
positions) the day before the recent top, proving once again that short-term
timing is a very difficult job. I use Sentiment as a long-term indicator and
even if Sentiment does turn bearish, it won’t affect the long-term outlook
unless other long-term indicators join the party.
Other signals still suggest a short-term top and I
continue to expect to see the Index fall 4-5% from its high.
Long-term I’m fully invested at 50% in stocks (a
conservative-retiree allocation). The long-term
trend remains up.
CURRENT RANKING OF 11 ETFs (Ranked Daily)*
#1 RANK for the past 31-days: Financial Select Sector
SPDR ETF (XLF).
#2 RANK: iShares Russell 2000 – Small Cap (IWM)
#3 RANK: Energy Select Sector SPDR ETF (XLE)
*For background on the ETF ranking system see NTSM Page
at…
TRADING PORTFOLIO (Small-% of the total portfolio)*
2x Short S&P 500 (SDS): Established 6 Dec.
2x Short S&P 500 (SDS): Established 16 Dec.
NET: +8.7%
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 Sentiment, Volume and VIX indicators were
neutral. The Price indicator was positive. 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 2016 in my long-term
accounts.
Remainder is 50% G-Fund. This is a conservative retiree allocation.
