“The number of people who applied for unemployment
benefits in late August remained close to a postrecession low, pointing to
another solid monthly employment report near the end of summer. Initial jobless
claims in the period running from Aug. 20 to Aug. 26 rose by 1,000 to 236,000…”
Story at…
PERSONAL SPENDING (24/7Wall St.)
“The U.S. Department of Commerce’s Bureau of Economic
Analysis (BEA) reported Thursday morning that personal income increased month
over month by 0.4% in July, after remaining flat in June. Disposable personal
income and personal consumption expenditures (PCE) both increased by 0.3%.”
Story at…
CHICAGO PMI (MarketWatch)
“A gauge of Chicago-area economic activity held steady in
August, after retreating from a 3-year high in the prior month. The Chicago PMI
remained at 58.9…” Story at…
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 was up slightly about 0.6% to
2472.
-VIX dropped about 6% to 10.59.
-The yield on the 10-year Treasury dipped to 2.12%.
The sum of 17-indicators improved today both “on the day”
and on a smoothed 10-day basis. Up-volume picked up today and is now positive
on a 10-day basis. Advancing-volume was nearly triple declining volume while
the number of advancing issues was well more than twice the declining issues.
New-highs outpaced new-lows by a wide margin.
Traders were selling toward the close (based on late-day
action), but (like yesterday) the closing tick was a very strong 479. That
suggests there were a lot of buy-at-the-close orders. This is bullish for Friday.
Overall the short-term indicators are bullish today.
Longer-term, I’m cautiously bullish; I will worry more if
the numbers deteriorate, but I remain fully invested. There isn’t any news now
that signals a bear market and long-term indicators remain neutral.
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…
Aerospace and Defense (ITA) moved back into #1 today.
SCHE (Emerging Markets) slipped into second place.
Avoid XLE and XLF; their 120-day moving averages are
falling.
SHORT-TERM TRADING PORTFOLIO - 2017 (Small-% of the
total portfolio)
LONG
I haven’t been doing much trading recently. I do own SSO
(2xS&P 500 ETF) that I established last Wednesday (23 July). My trading has
been so bad recently that I didn’t want to encourage anyone to follow my
example so I didn’t post it here.
-“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, Sentiment, VIX & Volume indicators
were neutral. With VIX recently below 10 for a couple of days (May, June, July
and now August), 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.
