“The U.S. economy added 156,000 nonfarm payrolls in
August while the unemployment rate rose slightly to 4.4%, according to
the latest figures from the Bureau of Labor Statistics. Economists
were looking nonfarm payrolls to grow by 180,000 in August…Wage growth was
also a disappointment, with average hourly earnings rising 0.1% over the prior
month and 2.5% over last year.” Story at…
ISM INDEX (MarkeWatch)
“Manufacturing activity was the strongest in six years in
August, according to a survey of purchasing managers released Friday. The
Institute for Supply Management said its manufacturing index in August climbed
to 58.8%...”
http://www.marketwatch.com/story/ism-manufacturing-index-jumps-to-six-year-high-in-august-2017-09-01
CONSTRUCTION SPENDING (CNBC)
“U.S. construction spending unexpectedly fell in July,
hitting a nine-month low amid a steep decline in investment in private
structures. The Commerce Department said on Friday that construction spending
decreased 0.6 percent…” Story at…
MICHIGAN SENTIMENT (Reuters)
“U.S. consumer sentiment climbed in August from July as
consumers remained optimistic about their personal financial conditions…The
University of Michigan’s consumer sentiment index rose to 96.8 in August…”
Story at…
AUTO SALES (USA Today)
“Hurricane Harvey tore through auto sales for
August, a factor that helps explain the 1.9% drop compared with
the same month last year.” Story at…
MARKET REPORT / ANALYSIS
-Friday the S&P 500 was up about 0.2% to 2477.
-VIX dropped about 4% to 10.13.
-The yield on the 10-year Treasury rose to 2.168%.
The S&P 500 has had a nice run since 14 August (a week
ago Thursday) with 6-consecutive up-days. That has brought the total to 8 days
up over the last 2-weeks. That’s stretched; 9 days up over a 10-day period
usually calls for a rest. The chart doesn’t look bad though; perhaps this run
can go longer. It certainly looks like
2500 is within reach for the Index.
Market Internals remain bullish, but a couple of other
indicators are starting to protest. Bollinger Bands (2-std deviations above the
Index) are nearly indicating overbought. RSI is neutral now and I like to watch
Bollinger Bands and RSI in tandem so not much to worry about yet.
The old standby advance-decline ratio is signaling “overbought”. That’s a measure of advancers vs declining stocks.
Another similar measure, the 10-dMA of the % of stocks advancing on the NYSE,
is now at 59.5%. I had to go back to
July of 2016 to find higher numbers. That too is an indication that the market
may be getting a bit frothy.
The sum of 17-indicators was +5 today. The direction of
this measure is sharply up and that’s bullish. It’s not at an extreme ether.
There are some unambiguous bearish signs. Late-day action
is pointing down since we have seen a number of days with late-day selling.
Sometimes this indicator tracks late so I’ll reserve judgement on this one. We’ve
seen high Tick (sum of the last trades of the day) for the last 3 days
(including today) and that’s a bullish sign at least for Monday.
Overall the short-term indicators remain bullish today,
but some profit taking wouldn’t be a surprise.
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)
*For additional background on the ETF ranking system see
NTSM Page at…
Biotechnology (IBB) moved into #1 today. SCHE (Emerging
Markets) slipped into third place.
Avoid XLE; its 120-day moving average is falling.
SHORT-TERM TRADING PORTFOLIO - 2017 (Small-% of the
total portfolio)
LONG
I haven’t been doing much trading recently. I do own SSO
(2xS&P 500 ETF) that I established last Wednesday (23 July). My trading has
been so bad recently that I didn’t want to encourage anyone to follow my
example so I didn’t post it here.
-“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
FRIDAY MARKET INTERNALS (NYSE DATA)
Market Internals remained
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.
