“Fewer than 250,000 Americans applied for unemployment
benefits in mid-June, underscoring the strength of a U.S. jobs market whose
biggest problem is a growing shortage of qualified workers. Initial jobless claims rose by 3,000 to 241,000 in the
seven days stretching from June 11 to June 17…” Story at…
PLAYING WITH FIRE (Northman Trader Blog)
“As I’ve outlined previously from my perspective we are in the
final move up paving the way for a larger top in 2017 setting us up for a
recessionary move into 2018/2019 and beyond with potentially far reaching
consequences if central banks lose control of the liquidity house of cards they
have built all around us. And, if this is so, we are finding ourselves
presented with a perhaps generational selling opportunity... We are now
reaching the upper risk range we’ve been discussion for a while and we know it
could still squeeze into it (2450-2500)… We consider any $SPX moves above 2450
(as yesterday) to be a selling opportunity setting up for a sizable technical
correction and volatility spike. ” Commentary at…
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 was down about 1pt to 2435.
-VIX was down about 3% to 10.48. (The Options Boys aren’t
worried.)
-The yield on the 10-year Treasury rose to 2.158%.
In another reversal, New-Highs are now greater than New-Lows.
This just shows some investor indecision, but at least it's headed up and that's good. Most indicators are headed down. Smart money (late-day-action) fell hard today
and this stat is falling on a 20-day basis. That’s bearish, but not too
bearish. Advancing volume is falling; New-highs are falling; breadth (% of
stocks advancing) is falling over the last 10-days; Money Trend is drifting
down; the sum of 17-indicators is down on a smoothed basis. Bottom line – indicators continue to get more
bearish, but not drastically so. No smoking gun on a correction yet. Like we
noted before, this might only be a couple % pullback. Short-term I am watching.
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…
Over the last 4-days there have been 4 different ETFs
ranked #1. Today it was Biotechnology (IBB) followed by Health Care (XLV). I’ve
been waiting for a clear leader to get back in. IBB had the strongest showing
in a while. It looks like the crowd is
headed there.
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
THURSDAY 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
Thursday, 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.
