TUESDAY’S REPORT FOLLOWS (Computer problems again)…
ISM SPENDING
“While falling short of June’s pace, manufacturing output
began the second half of 2017 in decent shape, according to data issued in the
Institute for Supply Management’s (ISM) monthly Manufacturing Report on
Business…” Story at…
AUTO SALES (Business Insider)
“The slump in US auto sales extended into July with the
so-called Big Three carmakers reporting declines that were worse than expected.”
Story at…
GM sales were down 15%; Ford was down 7%. Some of the
overseas manufacturers showed increases.
PERSONAL SPENDING/PCE PRICES (CNBC)
“U.S. consumer spending barely rose in June as personal
income failed to increase for the first time in seven months amid a decline in
dividend payments, pointing to a moderate pace of consumption growth in the
third quarter…There was also little sign of inflation. The personal consumption
expenditures (PCE) price index, excluding food and energy, rose 0.1 percent in
June…” Story at…
CONSTRUCTION SPENDING (Reuters)
“U.S. construction spending unexpectedly fell in June as investment in
public projects recorded its biggest drop since March 2002, suggesting a
downward revision to the second-quarter economic growth estimate…construction
spending tumbled 1.3 percent…” Story at…
FYI A SIMPLE TIMING METHOD (dShort.com)
Chart from…
This is just a 200-day moving average crossover method
that is easy to follow. Buy if the Index is above the 200-dMA and sell if it’s
below.
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 was up about 0.2% to 2476.
-VIX was down about 2% to 10.09.
-The yield on the 10-year Treasury slipped to 2.254%.
RSI is improved to a neutral signal. This isn’t an all-clear yet because it was
recently “sell”. New-highs flattened out
on a smoothed basis, but they need to move up and break the downtrend line that
has been in place for nearly a year before we can get too bullish. The sum of
17-Indiicators improved as did the Market Internals.
The call is NEUTRAL on a short-term basis. Cyclical
Industrial stocks are underperforming the S&P 500 and that usually doesn’t
happen if investors are optimistic.
Longer-term, I’m cautiously bullish; I will worry more in
late-summer (we’re almost there) and into early fall, but I remain fully
invested. There isn’t any news now that signals a bear market.
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, Emerging Markets (SCHE) ETF was #1. I would wait
for a day or two to see if this is confirmed. IBB and ITA remain close. 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.
I haven’t been doing much in the trading portfolio –
too busy to worry about it; but the call is now NEUTRAL as noted above.
-“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
TUESDAY 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
Tuesday, Price is positive; Sentiment, 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.
