PAYROLLS / HOURLY EARNINGS / AVG WORKWEEK (CNBC)
“Job creation fell sharply in May with just 138,000 new
positions created, while the unemployment rate declined to 4.3 percent… Wage
growth also disappointed, with average hourly earnings rising at a 2.5 percent
annualized pace. The average work week was unchanged at 34.4 hours.” Story at…
MARKET REPORT / ANALYSIS
-Friday the S&P 500 rose about 0.4% to 2439.
-VIX dropped about 1% to 9.75. (Below 10 remains a worry
since it shows extreme complacency.)
-The yield on the 10-year Treasury dipped to 2.162%.
The story for the day was volume. Down-volume exceeded
up-volume. 48% of the volume was up. In addition, unchanged volume was a very
high 100-million shares. There are some
who believe that high unchanged volume is a warning for the markets because it
is evidence of investor confusion. (I could never confirm this view in my data
mining – it makes sense though.)
There were 340 stocks that made 52-week highs today.
That’s a healthy number; perhaps too healthy.
Tick was +860.
That’s definitely too healthy (too high); it looks like too much
bullishness to me. The 10-dMA of Tick (last trades of the day) has exceeded 300
(it’s now 314) and that (according to Tom McClellan) is a bear sign at least
for some sort of pullback.
The S&P 500 exceeded its upper Bollinger Band (2-std
deviations) and that’s a warning sign.
RSI is still neutral so this isn’t a screaming sell.
Utilities are outperforming the S&P 500 over the last
2-months but not by much. The fact that Utilities are is not a strong warning.
The Advance/Decline ratio is “overbought” based on the
advance decline data, but it can remain so for some time. Wall St doesn’t put as much faith in this one
as they once did.
Market Internals remained positive on the market.
Overall, I think the short-term performance is somewhat
limited; markets can go higher, but perhaps not too much higher before we move back
at least a couple percent.
Longer term, I remain cautiously bullish; 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
FRIDAY MARKET INTERNALS (NYSE DATA)
Market Internals
remained 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
Friday, 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 since 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.
