“A fissure appears to be developing at the Federal
Reserve over when to raise interest rates: One side is preaching caution in a
low-inflation environment while another worries over the price of delaying.”
Story at…
HOUSING (MarketWatch)
“Builders broke ground on fewer homes in July, but
new-home construction continues to grind slowly and steadily higher, supporting
a gradually improving housing market. Housing starts ran at a 1.16 million seasonally
adjusted annual rate…5.6% lower compared to a year ago.” Story at…
CRUDE INVENTORIES (Oilprice.com)
“After trying to grab ahold of the fifty dollar handle,
WTI has lost its grip and is sliding lower in the forty dollardom once more.
Even though U.S. inventories look set to descend through August, global
oversupply concerns are overshadowing this supportive influence.” Story at…
RAYMOND JAMES COMMENTARY FROM MONDAY (Raymond James)
“…for most long-term investors, we continue to believe
the secular bull market will reward those who remain invested and don’t think
getting too defensive is warranted at this time.” Commentary at…
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 was up about 0.1% to 2468.
-VIX was down about 2% to 11.74.
-The yield on the 10-year Treasury rose to 2.232%.
-The market internals have not turned up and my sum of
17-indicators was down AGAIN.
-Late day action (the so called smart money) is headed
down on a 10-day basis so the Pros are getting cautious too.
-New-high/new-low data is still deteriorating.
-The Bollinger Bands for the S&P 500 are close
together and that is a bearish sign. Bollinger
Bands are 2-Std deviations above and below the Index. They are not yet close
enough together to indicate a squeeze (lowest value in the last 120-days). If
they were it would be very bearish; as it is, they are looking bearish and
getting more so all the time.
It looks like the market is most likely to fall as we
move forward over the next week.
Longer-term, I’m cautiously bullish; I will worry more if
the numbers continue to 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…
Once again, Aerospace and Defense (ITA) remained #1.
Avoid XLE and IWM; their 120-day moving averages are 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. I haven’t been doing much recently; I don’t have time to watch
and I think short-term trading takes a watchful eye.
-“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
WEDNESDAY MARKET INTERNALS (NYSE DATA)
Market Internals
remained negative 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
Wednesday, Price,
Sentiment & Volume indicators were neutral. VIX was indicating neutral,
but 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.
