“The number of Americans who applied for unemployment
benefits last week jumped by 15,000 to 258,000 and matched a two-month high,
with fresh revisions showing layoffs a bit higher in the past 15 months than
previously reported.” Story at…
HOME SALES (Bloomberg)
“Purchases of new homes increased in February to a
seven-month high, indicating the effects of the recent rise in borrowing costs
on the U.S. residential real estate market have been modest. Sales rose 6.1
percent to a 592,000 annualized pace…” Story at…
DURABLE ORDERS (Bloomberg)
“Orders for U.S. durable goods rebounded in January, a
sign companies remained upbeat at the start of the year. Bookings for goods
meant to last at least three years rose 1.8 percent after a 0.8 percent
decrease in December…” Story at…
CASS FREIGHT INDEX (CASS Information Systems)
“Both the Shipments and Expenditures Indexes have been
positive for two months in a row. Throughout the U.S. economy, there is a
growing number of data points suggesting that the economy is getting better.
Some data points are simply less bad, but an increasing number of them are
better, and even a few are becoming outright strong.” Press release at…
My cmt: The release said that year-over-year the February
Cass Shipments Index is up 1.9% and the Expenditures Index is up 3.2%.
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 was down about 0.1% to 2346.
-VIX rose about 2% to 13.12.
-The yield on the 10-year Treasury rose to 2.417%.
On the BEAR side: Money Trend remains down. My sum of
16-indicators went from -6 yesterday to 0 today – that’s an improvement, but
longer term the sum of indicators is still down slightly. The Cyclical
Industrial stocks (XLI) are underperforming the S&P 500. There was late-day selling today…youuuuge
late day selling – that’s bearish.
On the BULL Side: The 10-dMA of %-stocks advancing
climbed to 54.4%. (A number above 50% is bullish.) New-highs outpaced new-lows
today.
Bottom line: Numbers are improving and volume was low
today as the Index tested the prior low around 2344. Indicators are mixed;
still, it looks like selling may be ending.
If the Index is falling, but selling is drying up we need to be more
optimistic. Let’s see what happens tomorrow. I don’t know that the market can
breakout significantly above the old highs, but it might try.
CURRENT RANKING OF 15 ETFs (Ranked Daily)
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.
The Financials remain number one, but they are losing
momentum and may have topped out. Interest rates are slipping some and that is
bad for the Financials. If this correction really gets going XLF will not do
well while XLU will be the big winner, at least until the bottom of the
correction. XLF should recover after a pullback.
Recommended ETF Portfolio of top 3:
1. Financial Select Sector SPDR (XLF)
2. iShares U.S. Aerospace & Defense (ITA)
3. Technology Select Sector SPDR ETF (XLK)
I have not yet established a position based on the ETF
Ranking; I am waiting for a better entry point.
SHORT-TERM 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:
Now I wish I had tightened trading rules sooner. I am
underwater again!
-“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.
THURSDAY MARKET INTERNALS (NYSE DATA)
Market Internals
are Positive 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
Thursday, 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 reduced stock allocation to 25% stocks in the
S&P 500 Index fund (C-Fund) Wednesday, 1 March 2017 in my long-term
accounts.
Remainder is 75% G-Fund (Government securities). This is a conservative retiree
allocation based mostly on short-term signals.
