“Note: We construct the ADS Index using the latest data
available as of July 20, 2017. The bold vertical lines provide information as
to which indicators are available for which dates. For dates to the left of the
left line, the ADS index is based on observed data for all six underlying
indicators. For dates between the left and right lines, the ADS index is based
on at least two monthly indicators (typically employment and industrial
production) and initial jobless claims. For dates to the right of the right
line, the ADS index is based on initial jobless claims and possibly one monthly
indicator. The limits used on the y axis reflect the minimum and maximum values
of the index over its entire history.” Available at the Philly FED at…
CASS FREIGHT INDEX: SHIPMENTS UP 4.8% YEAR-OVER-YEAR
(CASS Information Systems)
Chart from…
My cmt: No recession in the works here.
DEBT IS THE CAUSE NOT THE CURE (Real Investment Advice)
“Debt, if used for productive investments, can be a
solution to stimulating economic growth in the short-term. However, in the
U.S., debt has been squandered on increases in social welfare programs and debt
service which has an effective negative return on investment. Therefore, the larger the balance of debt
becomes, the more economically destructive it is by diverting an ever growing amount
of dollars away from productive investments to service payments…
‘If the economy is doing as well as Central
Banks suggest, then why, after 9-years, are the ’emergency measures’ being
applied to global economies still in place?’” – Lance Roberts. Commentary,
charts and analysis at…
MARKET REPORT / ANALYSIS
-Monday the S&P 500 was down about 0.1% to 2470.
(Sorry for the typo yesterday.)
-VIX rose about 1% to 9.43 (Still historically low).
-The yield on the 10-year Treasury rose to 2.257%.
As noted previously (and repeating)…
VIX remains at extreme lows and has now reached the one
of the lowest VIX readings on record. One would need to go all the way back to
about 6-months before the Financial Crisis in 2007 to find the last period when
VIX was below 10. This is signaling extreme complacency and is cautionary for
the markets.
Most indicators are turning up including late-day
action. Things are looking good, but
perhaps too good if this continues. The Advance-Decline ratio is still signaling
“overbought,” but this signal tends to be early. Overbought can remain in place
for some time. RSI was better today (down to 71 from 74); and Bollinger Bands
are improving somewhat (i.e. less bearish).
For now, it looks like the markets may continue to make new highs for a
while longer.
The call is LONG on a short-term basis. Longer-term, I’m
cautiously bullish; I will worry more in late-summer and into early fall, but I
remain fully invested.
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, Biotech (IBB) ETF remained #1.
I would avoid XLE; its 120-day moving average is still
falling.
SHORT-TERM TRADING PORTFOLIO - 2017 (Small-% of the
total portfolio)
I take a portion of my cash and apply it strategically to
improve returns in cash. My short-term trading has never been about
get-rich-quick.
Neutral, with no positions recommended. -
5/24/2017 thru present.
I haven’t been doing much in the trading portfolio – too
busy to worry about it.
-“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
MONDAY MARKET INTERNALS (NYSE DATA)
Market Internals switched
to neutral on the market; the 10-day advancing volume is now falling.
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, Price, Volume, & VIX indicators
were neutral. (With VIX recently below 10
for a couple of days (May and June, and now July), VIX may be prone to
incorrect signals. Usually, a rising VIX is a bad market sign; now it may move
up, but that might 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.
