“Sales of new homes rebounded in May, helped by strong
sales gains in the South and West. Sales new single-family homes rose 2.9% last
month to a seasonally adjusted annual rate of 610,000…”
THE FED IS MAKING A MISTAKE (RIA)
“…there is mounting evidence the Fed is headed towards
making another mistake in their long line of creating “boom/bust” cycles…Looking
back through history, the evidence is quite compelling that from the time the
first rate hike is induced into the system, it has started the countdown to the next
recession. However, the timing between the first rate hike
and the next recession is dependent on the level of economic growth at that
time...With
economic growth currently running at THE LOWEST average growth rate in American
history, the time frame between the first rate and next
recession will likely not be long.” – Lance Roberts. Commentary at…
MARKET REPORT / ANALYSIS
-Friday the S&P 500 was up about 0.2% to 2438.
-VIX was down about 4% to 10.02. (That’s ridiculous low
volatility and is actually a concern for the future.)
-The yield on the 10-year Treasury dipped to 2.142%.
Today was a Russell Index rebalance day as of the
close. Volume was high. Numbers were
good, but it’s hard to know what to make of the day’s data.
Short-term I am watching – it still looks like a small
pullback is likely, but certainly not guaranteed. Long term, I’m cautiously
bullish; I will worry more in 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…
Today Biotechnology (IBB) was again ranked #1 followed by
Health Care (XLV). Clearly, the market is now betting that Obamacare will
remain, either as is or with a new name. I plan to get into IBB Monday, unless
it tanks. IBB and XLV could be subject
to big swings depending on the healthcare vote.
Utilities, XLU, is still beating the S&P 500. Strong
Utilities often means trouble.
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.
I am still not bullish enough to take a long position in
the trading portfolio.
-“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
FRIDAY MARKET INTERNALS (NYSE DATA)
Market Internals
remain 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
Friday, Price is positive; Volume, Sentiment & VIX indicators
were neutral. (With VIX recently below 10
for a couple of days (May and June), 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.
