“…payroll processor ADP on Thursday estimated that
businesses added a blockbuster 253,000 jobs in May, well above economists’
median estimate of 180,000.” Story at…
JOBLESS CLAIMS (MarketWatch)
“The number of Americans who sought unemployment benefits
in late May rose to a five-week high, likely reflecting the normal ebb and flow
that occurs around a holiday. Initial jobless claims jumped by 13,000 to
248,000 in the seven days stretching from May 21 to May 27….” Story at…
CONSTRUCTION SPENDING (Fox News)
“U.S. construction fell in April by the largest amount in
a year, reflecting weakness in homebuilding, non-residential construction and
government projects.
The Commerce Department reported Thursday that
construction spending fell 1.4 percent in April…” Story at…
ISM INDEX (MarketWatch)
“U.S. manufacturing continued to churn higher in May,
according to a survey of purchasing managers released Thursday.
The Institute for Supply Management said its
manufacturing index edged up a 10th of a point to 54.9%.” Story at…
CRUDE INVENTORIES (Reuters)
"Eight straight weeks of declining crude and the market is
barely up," said Gene McGillian, manager of market research at Tradition
Energy in Stamford, Connecticut. “The market is telling us that unless we have
significant inventory draws, the idea that we’re going to have stronger prices
doesn’t look to be realistic.” Weekly data from the U.S. Energy Information
Administration (EIA) showed crude inventories dropped 6.4 million barrels,
exceeding the 4.4 million-barrel drop forecast.” Story at…
HIGH YIELD CAN’T CONFIRM RALLY (McClellan Publications)
“The S&P 500 has rebounded from the May 17 one-day
panic to push to a higher high. But high-yield bond ETFs like HIO are not
confirming that higher high, and that’s a problem.” Chart and commentary at…
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 rose about 0.8% to 2430.
-VIX dropped about 5% to 9.89. (Below 10 remains a worry
since it shows extreme complacency.)
-The yield on the 10-year Treasury rose to 2.211%.
Volume was again above normal, but only about 7% today. Late day action was strong into 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 remains flat - neither positive nor negative.
The Index is still pushing the upper Bollinger Band and
that suggests some down time ahead, but this is not being confirmed by RSI so
let’s discount this indicator. The Sum of 17 indicators jumped from -2 to +11.
On a 10-day basis the Indicators were up too.
Market Internals switched to positive on the market. There were a few negatives: (1) the size of
the move up today was “statistically significant” (big move up) and that
suggests a down day tomorrow. (2) The Advance/Decline ratio is “overbought”
based on the advance decline data. (3) Utilities are outperforming the S&P
500 over the last 2-months. The cyclical Industrial Index (XLI – ETF) is not
outperforming the S&P 500 so the fact that Utilities are is not a strong
warning.
Overall, I guessing "up" in the short-term and I remain
cautiously bullish for the long-term; but I may worry late-summer and into
early fall.
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
THURSDAY MARKET INTERNALS (NYSE DATA)
Market Internals switched
to 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, Price, and Volume were bullish; Sentiment &
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.)
A buy now means very little and the NTMS is prone to give
Buy signals near tops. The last
important BUY-signal was 15 November 2016.
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.
