“U.S. consumer spending stalled in March while inflation
slowed to below the Federal Reserve’s target, showing the biggest part of the
economy might take more time to gain momentum after a tepid start to the year.”
Story at…
PCE PRICES (Economic Calendar)
“The US Personal Consumption Expenditure (PCE) price
index declined 0.2% for March…The year-on-year rate declined to 1.8% from 2.1%
and compared with an expected rate of 1.9%.” Story at…
My cmt: This stat is an important one that the FED uses
to measure inflation. FED officials are on-record saying the current US
economic slowdown will be transitory and should improve.
CONSTRUCTION SPENDING (Reuters)
“U.S. construction spending unexpectedly fell in March
from a record high amid a pause in private construction investment after five
straight months of increases.
The Commerce Department said on Monday construction
spending slipped 0.2 percent.” Story at…
ISM INDEX ((MarketWatch)
“U.S. manufacturers scaled back hiring plans in April and
demand for new products abated, but most companies said business was still
quite brisk, a survey of executives found. The Institute for Supply Management
said its manufacturing index slipped to 54.8% in April from 57.2%.” Story at…
UNSOUND FINANCE (Safehaven)
“It's not difficult to present analysis showing 3% (why
not 4 or 5%?) growth creating ample revenues to offset major tax cuts. But
after eight years of egregious monetary stimulus, one can easily envisage a
scenario where growth surprises to the downside. And it's not a totally crazy
notion to ponder growth faltering concurrent with a rise in Treasury borrowing
costs. Such a scenario would likely see a bursting of assets Bubbles and a
resulting collapse in revenues throughout the government sector. There's as
well all the entitlements and unfunded pension plans. When things turn sour
globally, we'll be spending a lot more on national defense. Unsound Finance
always comes back to bite. The worrying part is that the world has never
experienced anything comparable to the past 30 years.” – Doug Noland.
Commentary at…
THIS ISN’T THE 1980’s
“…this isn’t the 1980’s, the last time tax reform was
passed, with low valuations, high inflation and interest rates and much
stronger economic growth to start with. Therefore, the impact of tax cuts will
likely be far less than expected. Secondly, tax reform is likely going to
be the single most difficult challenge of this Administration as “partisan
politics” come into play. Ultimately, tax reform could be far
different, and much less robust, than currently anticipated.
So, here we are at the end of the first 100-days, with
little progress being made toward the things that count the most with
investors. With asset prices currently priced for
perfection, the real risk is that of “disappointment.” It will
likely pay to “err to the side of caution” for now as the risk is
clearly tilted against reward for now.” – Lance Roberts. Commentary at…
MARKET REPORT / ANALYSIS
-Monday the S&P 500 was up about 0.2% to 2388.
-VIX dropped about 7% to 10.11 at the close.
-The yield on the 10-year Treasury rose to 2.322%.
Mostly bullish signs continue:
-My Sum of 16-Indicators was at +9 today vs. +8
yesterday. Longer term the indicators continue to improve. Market Internals
look good and new-high/new-low data remains bullish, but just barely.
-Money Trend is still moving up, but just barely. That’s still
bullish though.
The Late-day action (Smart Money) was down today, but it
is trending higher. That’s mildly bullish.
Bear Signs:
-Sentiment remains high and has now resumed its slow
rise. Currently it is not a sell signal and is giving a neutral sign.
I remain bullish short-term and cautiously bullish longer
term.
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…
No1 is Technology (XLK).
Here’s a sector run-down from MarketWatch…
Chart from…
SHORT-TERM TRADING PORTFOLIO - 2017 (Small-% of the
total portfolio)
No positions.
I was shellacked in recent trades so no short-term
trading for a while. Long is the call
now though, as it has been since the Index closed above the 50-dMA.
MONDAY 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
Monday, Sentiment was negative; Price was positive;
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.
