“A measure of how well the economy is performing in the
Chicago area rose in May to the highest level in 2½ years, showing the economy
remains quite healthy in key regions of the U.S. The Chicago business
barometer, or Chicago PMI, rose to 59.4 in May…” Story at…
HOME SALES (ABC News)
“Americans retreated from signing contracts to buy homes
in April for the second straight month, a possible sign that a declining number
of homes on the market are stifling sales during the traditional spring buying
season. The National
Association of Realtors said
Wednesday that its pending home sales index fell 1.3 percent in April …”
FED BEIGE BOOK (Fox Business)
“Economic growth has softened in some areas of the U.S.
and a number of firms have become somewhat less optimistic about the future,
according to a new report from the Federal Reserve. ‘A majority of districts
reported that firms expressed positive near-term outlooks; however, optimism
waned somewhat in a few districts,’ the Fed said Wednesday…”
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 dropped about 1pt to 2412.
-VIX rose about 0.3% to 10.41.
-The yield on the 10-year Treasury slipped to 2.2o5%.
Volume was 25% above normal. We also saw little change in price. Some
would suggest that this is “distribution,” smart money selling to the dumb
money. I’ve seen other opinions that
high volume with little change in price validates the price. Perhaps, but do
the sellers know something we don’t? Late day action was fairly positive with a
decent upward price rise from about 3:15 to the close. That suggests the Pros are positive on the
market, so that’s a good sign. Longer term, the smoothed view of late day
action is flat - neither positive nor negative.
The Index is still pushing the upper Bollinger Band and
that suggests some down time ahead. The Sum of 17 indicators was unchanged at
-2. On a 10-day basis the Indicators are relatively flat. Bottom line signals
are not real strong. Overall the Index has again stalled in the vicinity of 2400
and we’ll just have to wait.
TODAY’S 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…
Technology (XLK) is No 1. I would avoid XLE; its 120-day
moving average is falling.
SHORT-TERM TRADING PORTFOLIO - 2017 (Small-% of the
total portfolio)
Neutral with no positions recommended. - 5/24/2017
thru present.
-“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.
-“Commandment #1: “Thou
Shall Not Trade Against the Trend.” - James P. Arthur Huprich
WEDNESDAY MARKET INTERNALS (NYSE DATA)
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
Wednesday, Price, Sentiment, Volume & VIX indicators
were neutral. (With VIX recently below
10, VIX may be prone to incorrect signals. Usually, a rising VIX is a bad
market sign; now it may just signal normalization of VIX, i.e., VIX and the
Index may both rise. As an indicator, VIX is out of the picture for a while.)
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, but I consider it fully invested for my situation.
