“…U.S. commercial crude inventories increased by 4.1
million barrels last week, maintaining a total U.S. commercial crude inventory
of 483.1 million barrels. The commercial crude inventory has reached the upper
limit of the average range for this time of year.” Story at…
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 was up about 0.3% to 2275. (That is near the all-time high.)
-VIX dipped about 2% to 11.26.
-The yield on the 10-year Treasury dipped slightly to
2.375%.
Another Bull indicator bites the dust…
I was a little surprised today to see that my Money Trend
indicator turned down. It attempts to follow the general concept of Lowry Research and their supply
and demand methodology for stock market analysis. Their concept is based on a
detailed stock-by-stock analysis while mine is an estimate based on readily
available Macro data. Theirs is much
more accurate, but that doesn’t mean mine isn’t useful.
The Sum of 16-Indicators dropped too, from +7 to +2, though
it is still rising on a smoothed basis.
Market Internals are not confirming the bull - Internals
are lagging the Index. The S&P 500 remains very close to the upper
Bollinger Band (a bear signal) and my “calm-before-the-storm” indicator is still
flashing “sell”.
Smart Money (late day action) is still pointing down,
even though today exhibited some very strong late-day action - perhaps too
strong. The closing Tick (sum of last
trades up or down) was a whopping 913.
Looking back over the last couple of years, Tick numbers higher than 900
generally (but not always) occurred after a bottom (when everyone was in a
buying panic) or near tops.
All in all, I think Indicators suggest that the S&P
500 Index is making a top. My guess is
that it will fall 4-5% from here, but it is always possible that a much larger
correction is in the offing. I am
actively short in my trading portfolio.
Long-term, I’m fully invested at 50% in stocks (a
conservative-retiree allocation – I don’t do short-term timing with retirement
money).
CURRENT RANKING OF 11 ETFs (Ranked Daily)*
#1 RANK for the past 45-days: Financial Select Sector
SPDR ETF (XLF).
#2 RANK: iShares Russell 2000 – Small Cap (IWM)
#3 RANK: iShares U.S. Aerospace and Defense ETF (ITA)
*For background on the ETF ranking system see NTSM Page
at…
TRADING PORTFOLIO - 2017 (Small-% of the total portfolio)
Rydex 2x Short S&P 500 (RYTPX): Established 6 Dec.
2x Short S&P 500 (SDS): Established 16 Dec.
Long Volatility ETN (VXX): Established 6 Jan 2017.
NET:
WEDNESDAY MARKET INTERNALS (NYSE DATA)
-10-day moving average of the percentage of stocks
advancing (NYSE): 54.3%. (54.5% prior trading-day.) A number above 50% is
usually BULLISH for the markets short-term.
-150-day moving average of advancing stocks: 52.4%. (A
value above 50% indicates a long-term, up-trend.)
-McClellan Oscillator: Rose from +33 to +77 (percentage
calculation method adjusted to fit McClellan’s values).
-New-highs minus new-lows: +104
(It was +81 prior trading day.)
-10-day moving average of the change in spread: -2. In
other words, over the last 10-days, on average, the spread has decreased by 2
each day.
Market Internals declined
to 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
Wednesday, the VIX & Volume indicators were neutral.
The Price indicator was positive. The Sentiment indicator was 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.
