"Orders for long-lasting manufactured goods sank 6.8
percent in July, the biggest fall in nearly three years, led by a drop in the
volatile category of civilian aircraft. But a gauge of business investment rose
last month…The numbers were warped by a 19 percent drop in orders for transportation
equipment…” Story at…
My cmt:The drop was the
result of Boeing that posted huge orders last month. Without transportation, Orders were up.
FED JACKSON HOLE SPEECH
(Marketwatch)
“U.S. stocks pared gains but
remained in positive territory Friday as investors appeared disappointed that
Federal Reserve Chairwoman Janet Yellen offered no clues to the central bank’s
monetary policy path.” Story at…
MARKET REPORT / ANALYSIS
-Friday the S&P 500 was up about 0.2% to 2443.
-VIX dropped about 8% to 11.28.
-The yield on the 10-year Treasury slipped to 2.169%.
A partial Indicator run-down follows:
-Up volume is improving and has been positive on a smoothed
10-day basis for the last 3 days. (Bullish)
-Sentiment remains very high and is nearly giving a sell
signal. (Currently Neutral but leaning to the Bear side.)
- Money Trend is positive and that’s Bullish.
- The Sum of 17 Indicators is positive. (Bullish)
-Smart Money (late-day action) is Neutral.
-Breadth (advancing stocks) is bullish at 54% over the
last 10-days. Breadth is improving at a faster rate than the S&P 500 –
Bullish.
-52-week New-High/New-low data is bullish based on the
spread (difference between Highs vs lows.) Still, I’d like to see the new-52-week
highs improve.
-We saw the Internals improve at the lows recently when
the Index dropped below its 50-dMA. (Bullish)
-VIX continues to drop and that’s bullish for stocks.
-None of the tests for a Hindenburg Omen (a bearish
indicator) are currently met. (By my analysis, we have not had a Hindenburg
Omen since Jan 2015.)
-Bollinger Bands are leaning bullish.
-RSI is leaning Bullish.
-Spread between cyclical Industrial stocks and the S&P
500 is neutral.
- The Market Internals are positive on the market.
Overall the indicators I track are quite bullish in the
near term.
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…
Emerging Markets (SCHE) remained #1 today. Of the 15-ETFs
I track only 2 were down on the day and one of them was ITA. ITA moved into
first on 3 August. Its run appears to be over.
Avoid XLE, DVY and IWM; their 120-day moving averages are
falling.
The weakness
across several sectors remains a concern so we need to keep a watchful eye on
this market.
SHORT-TERM TRADING PORTFOLIO - 2017 (Small-% of the
total portfolio)
LONG
-“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
Friday, 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.
The previous signal was a BUY on 2 June and the last
actionable signal was a BUY (from a prior sell) on 15 November 2016.
