Pending Home Sales … Manufacturing Improves … Stock Market Analysis … ETF Ranking

PENDING HOME SALES (ABC News)

“Fewer Americans signed contracts to buy homes in November. The decrease likely reflects the drag caused by rising mortgage rates and the shallow inventory of properties on the market. The National Association of Realtors said Wednesday that its seasonally adjusted pending home sales index fell 2.5 percent…” Story at…

http://abcnews.go.com/Business/wireStory/us-pending-home-sales-fell-november-44430686

MANUFACTURING (Advisor Perspectives)

“Five out of the twelve Federal Reserve Regional Districts currently publish monthly data on regional manufacturing: Dallas, Kansas City, New York, Richmond, and Philadelphia. The average of the five for December is 6.18, up from last month's 2.19 and in positive territory for the second consecutive month.” Commentary at…

 https://www.advisorperspectives.com/dshort/updates/2016/12/27/regional-fed-manufacturing-overview-second-consecutive-positive-reading

MARKET REPORT / ANALYSIS       

-Wednesday the S&P 500 was down about 0.8% to 2250.

-VIX rose about 8% to 11.99.

-The yield on the 10-year Treasury dropped to 2.51%.

“If everybody’s optimistic, who is left to buy?” - Sam Stovall, investment strategist for Standard & Poor’s

Sentiment is now giving a Bearish signal with a high 80%-Bulls reading. 

My SUM of 15-Indicators continues to fall.  I smooth the data by taking a sum over 10-days. 2-weeks ago the 10-day value was +48.  It is now -15. This is a pretty good indication that the trend remains down and suggests further downside ahead.

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 37-days: Financial Select Sector SPDR ETF (XLF).

#2 RANK: iShares Russell 2000 – Small Cap (IWM)

#3 RANK: Energy Select Sector SPDR ETF (XLE)

While the XLF remains ranked #1 using the methodology explained at the link below, IWM is outperforming the others over the past 3-weeks on a percentage gained basis.

*For background on the ETF ranking system see NTSM Page at…

http://navigatethestockmarket.blogspot.com/p/exchange-traded-funds-etf-ranking.html

TRADING PORTFOLIO (Small-% of the total portfolio)*

Long Volatility ETF (VXX): Established 5 Aug. SOLD 15 Sep. Gain: +6.6%.

2x S&P 500 ETF (SSO): Established 22 Sep. SOLD 7 Oct. Loss: -1.5%.

2x Short S&P 500 (SDS): Established 7 Oct. SOLD 10 Oct. Loss: -1.4%.

2x Short Dow 30 (SDOW): Established 17 Oct. SOLD 18 Oct Loss: -0.4%

2x Dow ETF (DDM) Established 18 Oct. SOLD 21 Oct Loss: -0.9

2x S&P 500 ETF (SSO) Established 9 Nov. SOLD 10 Nov Gain: +3.5%

2x S&P 500 ETF (SSO) Established 15 Nov. SOLD 22 Nov. Gain: +2.3%

Financial Select Sector SPDR ETF (XLF) Est. 1 Dec.SOLD 19 Dec Gain: +1.7%

2x Short S&P 500 (SDS): Established 6 Dec.

2x Short S&P 500 (SDS): Established 16 Dec.

Long Volatility ETF (VXX): Established 7 Dec. SOLD 9 Dec. Loss:  -1.2%  

NET: +8.7%

MARKET INTERNALS: 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 Volume indicator was neutral. The Price and VIX indicators were positive. The Sentiment indicator was negative.

NTSM LONG TERM INDICATOR: 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.