“Pending home sales rebounded sharply in February to
their highest level in nearly a year and second-highest level in over a
decade…The Pending Home
Sales Index, an indicator based on contract signings, jumped
5.5 percent…” Story at…
CRUDE INVENTORIES (Fuelfix.com)
“The nation’s record-high stockpile of crude oil rose by
another 900,000 barrels last week, but that was more than offset by large draw
downs in fuel inventories.” Story at…
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 was up about 0.1% to 2361.
-VIX slipped about 1% to 11.42.
-The yield on the 10-year Treasury slipped to 2.379%.
(Traders sold bonds and bought stocks.)
Advancers were well ahead of declining stocks today and
up-volume outpaced down. 53.8% of stocks on the NYSE have advanced over the
last 10-days. I’d expect follow thru to the upside in the near term. The Pros aren’t so sure; late day action was
down again on the day; but late-day action is flat over the last 10-days so
that’s a neutral indication. I remain short-term bullish.
CURRENT RANKING OF 15 ETFs (Ranked Daily)
Recently the Financials (XLF) have been falling and my
momentum rank hasn’t moved much. I looked back at some of the prior analysis
and decided to use my older version of the Momentum System. This makes some
significant changes. Under the older system, XLF dropped out of the top 3 last
week and Utilities (XLU) and Emerging Markets (SCHE) moved up. I would caution that XLU may drop quickly if there
is no correction in the near future; and XLF may recover quickly if bond yields
rise as they may without a correction.
The top ranked ETF receives 100%. The rest are then
ranked based on their momentum relative to the leading ETF. While momentum isn’t stock performance per
se, momentum is closely related to stock performance. For example, over the 4-months
from Oct thru mid-February 2016, the number 1 ranked Financials (XLF) outperformed
the S&P 500 by nearly 20%.
*For additional background on the ETF ranking system see
NTSM Page at…
I would avoid iEAFE (Europe and Far East) & XLE;
currently their 120-dMAs are declining.
Recommended ETF Portfolio of top 3:
1. Technology Select Sector SPDR ETF (XLK)
2. Schwab emerging Markets (SCHE)
3. ITA, SPY, XLY, and XLV are all essentially tied for
third.
XLU was actually 2nd, but I am not inclined to
recommend it unless it appears a defensive position is required. Financial
Select Sector SPDR (XLF) is close enough to own if one believes that interest
rates will rise.
(I took positions in XLF and XLK Wednesday, 29 March.)
SHORT-TERM TRADING PORTFOLIO - 2017 (Small-% of the
total portfolio)
I closed all remaining short positions on 3/28/2017. My losses were big enough that I am too
embarrassed to list them here.
-Rydex S&P 500 2x Strategy. Established 3/28/2017
-SSO. Established 3/28/2017
-“In a bull market, you can only be long or
neutral.” – D. Gartman
-“The best policy
is to avoid shorting unless a major bear market is underway and downside
momentum has been thoroughly established. Even then, your timing must sometimes
be perfect. In a bull market the trend is truly your friend, and trading
against the grain is usually a fool's errand.” – Clif Droke.
“There are two kinds of forecasters. Those who
don’t know, and those who don’t know they don’t know.”- John Kenneth Galbraith.
WEDNESDAY MARKET INTERNALS (NYSE DATA)
Market Internals
turned 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, Sentiment was negative (Bullishness is at an
extreme.); Price, Volume & VIX indicators were 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, 24
March 2017 in my long-term accounts, based on short-term indicators.
Remainder is 50% G-Fund (Government securities). This is a conservative retiree
allocation based mostly on low volume at the test of the recent bottom.
