“The number of people who applied for U.S.
unemployment-insurance benefits inched up by 2,000 to 234,000 in the week that
ended Aug. 19…” Story at…
EXISTING HOME SALES (US News and World Report)
“Existing home sales plummeted to their lowest level this
year as an inventory shortage continues to squeeze the U.S. real estate market.Sales
of existing homes slipped 1.3 percent last month…” story at…
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 was down about 0.2% to 2439.
-VIX dropped about 0.2% to 12.23.
-The yield on the 10-year Treasury slipped to 2.195%.
We saw selling at the close today and that’s a negative;
but otherwise, there were very few bearish signs in the indicators I track.
Even the Market Internals switched to positive on the market. While that seems to indicate we go up from here, technicals may be
Trumped by the news, especially the FED. FED watchers swill be on high alert tomorrow as hints about rate hikes will be traded; that may move the market and we can only guess about the direction markets will take.
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) was #1 yesterday and Emerging
Markets (SCHE) moved into #1 today. I’d wait a day or two before switching into
SCHE. Avoid XLE, DVY, XLF 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
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.
