“Manufacturing activity in the New York region declined
in May as the New York Federal Reserve’s gauge of current business conditions
in the area hit negative territory for the first time since October. The index
fell six points this month to -1 from 5.2 in April…” Story at…
PULLBACK IN S&P 500 (MarketWatch)
“As I review my charts, much still points to the
potential we have been following that the S&P 500 Index could fall toward
the 2,330 region, and ideally to around 2,285.
As I write this, the stock market has presented us with a
setup to take us there in the upcoming week.” - Avi Gilburt, Elliott Wave technical analyst.
Commentary at…
THE BIG PICTURE: SCARY MARKETS COMING (Ray Dalio Blog)
“Big picture, the near term looks good and the longer
term looks scary. That is because…The economy is now at or near its best,
and we see no major economic risks on the horizon for the next year or two…we fear that whatever the
magnitude of the downturn that eventually comes, whenever it eventually comes,
it will likely produce much greater social and political conflict than
currently exists.” – Ray Dalio, Bridgewater Hedge Fund. Blog available at…
MARKET REPORT / ANALYSIS
-Monday the S&P 500 rose about 0.5% to 2402.
-VIX creeped up about 0.2% to 10.42 at the close. (The
options boys aren’t worried.)
-The yield on the 10-year Treasury rose to 2.346%.
While the 2-articles linked above are bearish, it’s not
clear to me; the yo-yo continues. We’ve
had up and down moves for about 2-weeks. Monday the S&P 500 broke slightly
higher than its 2-weeks-ago value and made a new high. Internals improved too. If
we can get some follow-thru it might give us more confidence that the Index
will leave 2400 in the dust. As it is,
we may have to wait further to decide whether there is going to be additional
gains from here. The Index hasn’t gone up much since 26 April (3-weeks ago) when
it was 2388.
Bear signs:
-New-high/new-low data is mildly bearish.
-My Sum of 17–indicators improved from -1 to +3 on the
day, but the 10-day value is still headed sharply down.
Neutral signs:
-Market Internals remained neutral today.
Bull signs:
-Money Trend switched to the upside.
-RSI was 63 so maybe the Index has gotten past the overbought
signal from 5-days ago.
-The percentage-of-stocks-advancing over the past 10-days
rose to 51.1% today; that means that most stocks on the NYSE have gone up in
the last 10-days.
-The 5-10-20 Timer System remains “buy”. (The 5-dEMA
& 10-dEMA are both above the 20-dEMA.)
-Late-day action was up today and it is headed up on a
smoothed 20-day basis. I place a high value on late-day action since it usually
indicates what the Pros think.
Apparently, they think this market can go higher.
Overall, indicators are neutral to bullish. Let’s see if we can see some acceleration –
one way or the other.
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 XLE; its 120-day moving average is falling.
No.1 remains Technology (XLK). I continue to hold the
XLK.
“At each major market peak throughout history,
there has always been something that became “the” subject of speculative
investment. Rather it was railroads,
real estate, emerging markets, technology stocks or tulip bulbs, the end result
was always the same as the rush to get into those markets also led to the rush
to get out. Today, the rush to buy “ETF’s” has
clearly taken that mantle…” – Lance Roberts. Commentary at…
SHORT-TERM TRADING PORTFOLIO - 2017 (Small-% of the
total portfolio)
No positions. Let’s watch the market for confirmation, up
or down.
-“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.
I haven’t done well in my short positions over the past
6-months; conversely, I have a decent record in long positions.
MONDAY 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
Monday, Price was positive; 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.
