YELLEN SAYS FED MAY HAVE BEEN WRONG (CNBC)
“The Fed may have overstated the strength of the labor
market and the rate of inflation, leading to monetary policy ahead that will be
easier than thought, Fed Chair Janet Yellen said.” Story at…
ANOTHER STORY ON FED RATE HIKES (Investing.com)
“The Federal Reserve needs to continue gradual rate hikes
despite broad uncertainty about the path of inflation, Fed Chair Janet Yellen
said on Tuesday in remarks that acknowledged the central bank's struggles to
forecast one of its key policy objectives. It is possible, Yellen said, that
the Fed may have "misspecified" its models for inflation, and
"misjudged" key facts like the underlying strength of the labor
market and whether inflation expectations are as stable as they seem, and
central bankers need to remain open to that possibility as they decide on
policy.” Story at…
DURABLE GOODS (USA Today)
“Orders for long-lasting manufactured goods rose a modest
1.7% in August, reflecting a rebound in the volatile aircraft sector. A gauge
of business investment was up for a second month, providing hope that a revival
in manufacturing is gaining strength.” Story at…
CRUDE INVENTORIES (OilPrice.com)
“As WTI enjoys the first meaningful price rise since this
spring, and a day after the API injected further optimism in markets by
reporting a 761,000-barrel
draw in U.S. crude oil inventories, the EIA added fuel to the
celebratory mood. The authority reported a
1.8-million-barrel decline in U.S. commercial crude oil inventories for the
week to September 22…” Story at…
MARKET REPORT / ANALYSIS
-Wednesday the S&P 500 was up about 0.4% to 2507.
-VIX slipped about 3% to 9.87.
-The yield on the 10-year Treasury rose to 2.312%.
If the FED is slower in its rate hikes, it is time to
view the stock market in a more favorable light. I have remained fully invested
for some time so I don’t intend to increase stock allocations, but the fear
that many have been exhibiting for some time may not be warranted. The biggest threat to the stock market has
been the Fed and rising rates. We can
also worry about Quantitative Tightening (QT), but if rate hikes are going to
be slower than the Fed's previous promise to be slow, that fear is not warranted.
My sum of 17 indicators was up to +3 on the day from 0 yesterday.
My smoothed version of the 10-day version of this indicator is still bullish.
I remain bullish longer-term. One wonders when this party
will end so I will worry 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) remained #1 today. I am in
ITA as of 21 Sept.
Avoid XLE; its 120-day moving average is still falling.
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
WEDNESDAY MARKET INTERNALS (NYSE DATA)
Market Internals remained
Neutral 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, the Price
indicator was positive; Sentiment, VIX & Volume indicators were neutral.
With VIX recently below 10 for a couple of days in May, June, July, August and
September, 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) 24 March
2017 in my long-term accounts, based on short-term indicators. The 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.
The top ranked ETF receives 100%. The rest are then
ranked based on their momentum relative to the leading ETF.
