“Applications for U.S. unemployment benefits fell sharply
in mid-September, reflecting fewer new claims than expected in Florida and
Texas following a pair of destructive hurricanes. Initial weekly claims in the
period running from Sept. 11 to Sept. 16 fell by 23,000 to 259,000…” Story at…
PHILADELPHA FED (AIER)
“Manufacturing firms in the Philadelphia area showed a
substantial increase in current business conditions as well as expectations for
future conditions six months ahead. The index for general business conditions
jumped to 23.8 versus 18.9 in August.” Story at…
STUDENTS AGAINST HATE SPEECH (Mishtalk)
“A Brookings Study of college students views on the first
amendment right of free speech shows some shocking trends.
-Only 31% of female college students believe in the
constitutional right to free speech.
-62% of Democrats think it is OK to shout down speakers.
-30% of male students believe violence is an acceptable
response by student groups.”
My cmt: This finding is not a surprise given what’s been
happening on campuses recently. The piece could be titled, Students Against
Free Speech.
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 was down about 0.3% to 2501.
-VIX slipped about 1% to 9.67.
-The yield on the 10-year Treasury rose to 2.279%.
VIX fell again, down 1% on the day. No fear here, nor is there an expectation of
a correction from the Options Boys.
Volume was about 10% below the monthly norm for the S&P 500 so
investors don’t seem worried either. Some
traders are probably on the sidelines waiting to see if the FED QT announcement
will have an impact on the Markets.
Remember, the markets were “saved” by the Fed program of buying bonds
called Quantitative Easing (QE). Now we’re looking at Quantitative Tightening
(QT) in which the Fed must sell bonds to lower its balance sheet starting in
October. QT may present problems for the markets.
Market Internals have slipped to neutral. Over the last
10-days, advancing volume is now headed down. My sum of 17 indicators dropped a
little on the day, but longer term they remain up.
Overall the short-term indicators are Neutral.
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) remained #1 today. I am in
ITA as of today.
Avoid XLE; its 120-day moving average is 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
THURSDAY MARKET INTERNALS (NYSE DATA)
Market Internals slipped
to 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
Thursday, Price was
positive. Sentiment, VIX & Volume indicators were neutral. With VIX
recently below 10 for a couple of days (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.
