“U.S. employers boosted hiring in November and the
unemployment rate dropped to a more than nine-year low of 4.6 percent, making
it almost certain that the Federal Reserve will raise interest rates later this
month. Nonfarm payrolls increased by 178,000 jobs last month…” Story at…
HOURLY EARNINGS (Briefing.com)
“November average hourly earnings were down 0.1%
(Briefing.com consensus +0.2%) after being up 0.4% in October. Over the
last 12 months, average hourly earnings have risen 2.5% versus 2.8% for the
12-month period ending in October.” Details and charts at…
HIGH PE
The following chart shows the PE 10 and its deviation
from its mean (average). We’re now in the 4th highest deviation in history and
it won’t take much for the markets to take over 3rd place. Still, valuation can
go higher so this isn’t necessarily a market killer in the long run.
For additional charts and commentary see Advisor
Perspectives at…
MARKET REPORT / ANALYSIS
-Friday the S&P 500 was up a point to 2192 at the
close.
-VIX rose about 0.4% to 14.12 at the close.
-The yield on the 10-year Treasury slipped to 2.39%.
Updating yesterday’s note:
Not much has changed.
Some indicators continue to slowly deteriorate; others improved slightly.
Short-term I am somewhat bearish. My Money Trend indicator and the Sum of
16-Indicators are pointing down. New-High/New-Low data is now giving a bearish
indication, but on the bullish side, Breadth (10-dMA %-advancing stocks) picked
up a bit. Advancing volume turned up on a smoothed 10-day basis too.
I was close to going short this
afternoon, but with a couple of green shoots I didn’t. There still may be an
opportunity to Short soon (for a short-term trade). It all depends on the market over the next
couple of days.
Long-term I’m fully invested at 50% in stocks (a
conservative-retiree allocation) – I remain “hold-my-nose” bullish. The long-term trend remains up.
TRADING PORTFOLIO (Small-% of the total portfolio)*
Financial Select Sector SPDR ETF (XLF) Est. 1 Dec.
NET: +8.2%
*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 19-days: Financial Select Sector
SPDR ETF (XLF).
#2 RANK: iShares U.S. Aerospace & Defense ETF (ITA)
#3 RANK: Energy Select Sector SPDR ETF (XLE)
*For background on the ETF ranking system see NTSM Page
at…
FRIDAY MARKET INTERNALS (NYSE DATA)
-10-day moving average of the percentage of stocks
advancing (NYSE): 52.3%. (52% yesterday.) A number above 50% is usually BULLISH
for the markets short-term.
-150-day moving average of advancing stocks: remained 52.2%.
(A value above 50% indicates a long-term, up-trend.)
-McClellan Oscillator: rose from -5 to +3; that’s nit
much change (percentage calculation method adjusted to fit McClellan’s values).
-New-highs minus new-lows: +21 (It was +118 yesterday.)
-10-day moving average of the change in spread: -13. In other
words, over the last 10-days, on average, the spread has decreased by 13 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
Friday the Sentiment, Volume and VIX indicators were
neutral. The Price indicator was positive. Overall the long-term indicator
remained Neutral.
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.
