Tuesday, October 31, 2017
Futures Bullish
Tonight, we see bullish futures ignoring my expectation
that markets will retreat. The 10-dMA of the % of stocks advancing on the NYSE
picked up from 47.4% yesterday to 49.4% Tuesday. There weren’t too many other
bullish trends in my numbers although there were neutral ones. Mr. Market may choose to postpone a pullback
again! We’ll see.
Chicago PMI … Consumer Confidence … Stock Market Analysis … ETF Trading … Dow 15 Ranking
CHICAGO PMI (Investing.com)
“Manufacturing activity in the U.S. Midwest unexpectedly
strengthened to its strongest level in three years in October...The Chicago
Purchasing Management Index rose to 66.2 from
65.2 in September. It was the highest level since October 2014…” Story at…
CONSUMER CONFIDENCE (Conference Board)
“Consumer confidence increased to its highest level in
almost 17 years in October after remaining relatively flat
in September,” said Lynn Franco, Director of Economic Indicators at The
Conference Board. “Consumers’ assessment of current conditions improved,
boosted by the job market which had not received such favorable ratings since
the summer of 2001.” Press release at…
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 was up about 0.1% to 2575.
-VIX was down about 3% to 10.18.
-The yield on the 10-year Treasury rose to 2.375%.
My Sum of 17 Indicators dropped from -2 to -6. This is subject to a lot of daily swings so I
use a smoothed 10-day value for this indicator.
My 10-day indicator is still falling sharply and that remains bearish.
See Friday’s blog post for my thoughts on the Markets –
they haven’t changed. Indicators are deteriorating. We’ll see if they keep
headed down.
A pullback in the range of 3-5% would be the norm.
Perhaps we’ll finally see a bigger (10% or more move down), but that is
anybody’s guess at this point. The
numbers suggest down; but the magnitude is unknown.
Short-term I am still leaning bearish and I made a
bearish VXX buy Friday. It’s a risky
move as I noted several times, but with VIX below 10 and other bearish
indicators I think it is a reasonable bet.
I’ll have a low tolerance for loss and I’ll sell quickly if this trade
moves against me.
I remain bullish longer-term. One wonders when this party
will end so I will worry if the numbers deteriorate, but for now I remain fully
invested.
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…
Technology (XLK) was #1; Aerospace and Defense (ITA) remained
#2 today and Financials (XLF) weren’t far behind. I am in ITA as of 21 Sept. I
plan to sell tomorrow unless ITA puts on a big move up.
I thought it would be interesting to apply the ETF
ranking system methodology to the Dow 30.
The quick way to do it was to keep the number of stocks the same as my
ETF ranking system so here is a ranking of 15 DOW stocks.
TODAY’S RANKING OF 15 DOW STOCKS (Ranked Daily)
The top ranked ETF receives 100%. The rest are then
ranked based on their momentum relative to the leading ETF. Avoid GE, Merck and Disney. Their 120-day
moving averages are falling.
Intel (INTC) remained #1 today. I have owned Intel for
some time.
*I rank the Dow 15 similarly to the ETF ranking system.
For more details, see NTSM Page at…
SHORT-TERM TRADING PORTFOLIO - 2017 (Small-% of the
total portfolio)
LONG
As noted Friday I did take a short-term VXX position on
27 Oct very near the close. This violates the rules below, but I am eternally
hopeful.
My shorting rule is as follows:
-“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
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
Tuesday, Sentiment,
Price, VIX & Volume indicators were neutral. With VIX recently below 10
for a couple of days in May, June, July, August, September and now October, 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.
Monday, October 30, 2017
Consumer Spending … Reginal FED Manufacturing … Stock Market Analysis … ETF Trading … Dow 15 Ranking
CONSUMER SPENDING (CNBC/Reuters)
“U.S. consumer spending recorded its biggest increase in
more than eight years in September, likely as households in Texas and Florida
replaced flood-damaged motor vehicles. The Commerce Department said on Monday
consumer spending, which accounts for more than two-thirds of U.S. economic
activity, jumped 1.0 percent last month.” Story at…
REGIONAL FED MANUFACTURING (Advisor Perspectives)
“Five out of the twelve Federal Reserve Regional Districts currently
publish monthly data on regional manufacturing: Dallas, Kansas City, New York,
Richmond, and Philadelphia….The latest average of the five for October is 21.2,
up from the previous month's 17.8.” See below chart:
Charts and commentary from Advisor Perspectives at…
MARKET REPORT / ANALYSIS
-Monday the S&P 500 was down about 0.3% to 2573.
-VIX was down about 7% to 10.5.
-The yield on the 10-year Treasury slipped to 2.372%.
My Sum of 17 Indicators rose from -3 to -2. This is subject to a lot of daily swings so I
use a smoothed 10-day value for this indicator.
My 10-day indicator is falling sharply and that’s bearish.
See Friday’s blog post for my thoughts on the Markets –
they haven’t changed.
A pullback in the range of 3-5% would be the norm.
Perhaps we’ll finally see a bigger (10% or more move down), but that is
anybody’s guess at this point. The
numbers suggest down; but the magnitude is unknown.
Short-term I am still leaning bearish and I made a
bearish VXX buy Friday. It’s a risky
move as I noted several times, but with VIX below 10 and other bearish
indicators I think it is a reasonable bet.
I’ll have a low tolerance for loss and I’ll sell quickly if this trade
moves against me.
I remain bullish longer-term. One wonders when this party
will end so I will worry if the numbers deteriorate, but for now I remain fully
invested.
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…
Technology (XLK) was #1; Aerospace and Defense (ITA) slipped
to #2 today and Financials (XLF) weren’t far behind. I am in ITA as of 21 Sept.
I thought it would be interesting to apply the ETF
ranking system methodology to the Dow 30.
The quick way to do it was to keep the number of stocks the same as my
ETF ranking system so here is a ranking of 15 DOW stocks.
TODAY’S RANKING OF 15 DOW STOCKS (Ranked Daily)
The top ranked ETF receives 100%. The rest are then
ranked based on their momentum relative to the leading ETF. Avoid GE, Merck and Disney. Their 120-day
moving averages are falling.
Intel (INTC) moved into #1 today. I have owned Intel
for some time.
*I rank the Dow 15 similarly to the ETF ranking system.
For more details, see NTSM Page at…
SHORT-TERM TRADING PORTFOLIO - 2017 (Small-% of the
total portfolio)
LONG
As noted Friday I did take a short-term VXX position on
27 Oct very near the close. I had intended to post it here during trading hours
so others could follow my foolishness if they wanted; but I was out working and
only noticed this set-up in the last 10-minutes of the day when I got home.
This violates the rules below, but I am eternally hopeful.
My shorting rule is as follows:
-“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
MONDAY 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
Monday, Sentiment,
Price, VIX & Volume indicators were neutral. With VIX recently below 10
for a couple of days in May, June, July, August, September and now October, 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.
Friday, October 27, 2017
GDP … Michigan Sentiment … Stock Market Analysis … ETF Trading … Dow 15 Ranking
GDP (WSJ)
“The U.S. economy posted its best six-month stretch of
growth in three years, rebounding quickly from two hurricanes and showing
momentum heading into the year’s final months. Gross domestic product—the
broadest measure of goods and services made in the U.S.—expanded at a 3% annual
rate in the third quarter…” Story at…
MICHIGAN SENTIMENT
The consumer sentiment average during the first ten
months of 2017 (96.7) has been the highest since 2000 (108.5).” Story at…
MARKET REPORT / ANALYSIS
-Friday the S&P 500 was up about 0.8% to 2581.
-VIX was down about 13% to 9.8.
-The yield on the 10-year Treasury slipped to 2.411%.
Running out of Gas:
-6% of stocks on the NYSE made new-highs today. At the
prior all-time high on 20 October, 9% of stocks made new highs.
-The 10-dMA of advancing stocks was 54% on 20 Oct. At today’s
new all-time high, only 48% of stocks were advancing on the NYSE over the last
10-days.
-Up volume was 50% of the total over the prior 10-days on
20 Oct. Today it was 47%.
Momentum is slipping. It looks like we’ll see some sort
of pullback. I don’t keep a stat on it, but while market made a new-high on the
S&P 500 Friday, two stats stand out: (1) only 48% of stocks have been
advancing over the last 10-days (2) declining volume has outpaced advancing
volume over the past 10-days. That is odd. It means the smalls aren’t participating
as they should. This isn’t unusual so it doesn’t mean there will be a crash; but
it does indicate that it is less likely that the market will continue up from
here in the short-run given other negative signs we’ve seen recently.
Last, the move Friday was statistically significant based
on the standard deviation of the price-volume when compared to recent history.
That is likely to result in a down-day Monday about 60% of the time. I wrote recently
that “…before we see any meaningful pullback, we need to put in a top. At this point another big move up, say around
1%, could mark another short-term top.” Today’s move of 0.8% didn’t quite make
my target, but I think it may be close enough. The Index is at its upper trend
line and we have certainly seen enough bearish signals for the last 6-weeks.
Bollinger Bands finally joined the bearish party with an overbought indication
today.
A pullback in the range of 3-5% would be the norm. Perhaps
we’ll finally see a bigger (10% or more move down), but that is anybody’s guess
at this point. The numbers suggest down;
but the magnitude is unknown.
Short-term I am still leaning bearish and I made a
bearish VXX buy today. It’s a risky move
as I noted several times, but with VIX below 10 and other bearish indicators I
think it is a reasonable bet. I’ll have
a low tolerance for loss and I’ll sell quickly if this trade moves against me.
I remain bullish longer-term. One wonders when this party
will end so I will worry if the numbers deteriorate, but for now I remain fully
invested.
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. The Financials (XLF) picked up steam presumably based on
higher interest rates as we have noticed the 10-yr bond rising recently.
I thought it would be interesting to apply the ETF
ranking system methodology to the Dow 30.
The quick way to do it was to keep the number of stocks the same as my
ETF ranking system so here is a ranking of 15 DOW stocks.
TODAY’S RANKING OF 15 DOW STOCKS (Ranked Daily)
The top ranked ETF receives 100%. The rest are then
ranked based on their momentum relative to the leading ETF. Avoid GE, Merck and Disney. Their 120-day
moving averages are falling.
Caterpillar (CAT) remained #1.
*I rank the Dow 15 similarly to the ETF ranking system.
For more details, see NTSM Page at…
SHORT-TERM TRADING PORTFOLIO - 2017 (Small-% of the
total portfolio)
LONG
As noted above I did take a short-term VXX position on 27
Oct very near the close. I had intended to post it here during trading hours so
others could follow my foolishness if they wanted; but I was out working and
only noticed this set-up in the last 10-minutes of the day when I got home. This
violates the rules below, but I am eternally hopeful.
My shorting rule is as follows:
-“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
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
Friday, Sentiment,
Price, VIX & Volume indicators were neutral. With VIX recently below 10
for a couple of days in May, June, July, August, September and now October, 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.
Thursday, October 26, 2017
Jobless Claims … Kansas City FED … Real Durable Goods Orders … Stock Market Analysis … ETF Trading … Dow 15 Ranking
JOBLESS CLAIMS
The number of Americans filing for unemployment benefits
increased less than expected last week, suggesting the labor market continued
to tighten after recent hurricane-related disruptions…Initial claims for state
unemployment benefits increased 10,000 to a seasonally adjusted 233,000 for the
week ended Oct. 21…” Story at…
KANSAS CITY FED (People’s Pundit Daily)
“The Kansas City Federal Reserve Bank said their gauge of
manufacturing activity in the Tenth District came in at 23 in October, stronger
than the 17 median forecast…“Factory activity accelerated further in our region
this month, posting its highest composite reading since 2011,” said Chad
Wilkerson, vice president and economist at the Federal Reserve Bank of Kansas
City.” Story at…
REAL DURABLE GOODS ORDERS (Advisor
Perspectives)
“As these charts illustrate, when we study durable goods
orders in the larger context of population growth and also adjust for
inflation, the data becomes a coincident macro-indicator of a major shift in
demand within the U.S. economy. It correlates with a decline in real household
incomes, as illustrated in our analysis of the most recent Census Bureau
household income data…” Charts and analysis at…
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 was up about 0.1% to 2560.
-VIX was up about 0.6% to 11.30.
-The yield on the 10-year Treasury increased to 2.465%.
My Sum of 17-Indicators rose from -2 to 0. Longer term
the Indicators are falling sharply. Indicators are not much different than
yesterday, but there are a couple of changes:
-Up-volume moved up on a 10-day basis. That’s a bullish change.
-The Smart Money Indicator (based on late day action)
turned down after a positive day yesterday.
Looks like the Pro trend is still selling after turning up for only 1-day.
I noted yesterday that “we may see a short-term dip in
the 3-5% range. Earnings will play a part in investor psychology. Google,
Amazon, Intel all report tomorrow albeit after the close, so they’ll set the
tone for Friday.” How did they do?
“Four of the most valuable tech companies in the
world—Amazon.com Inc., Google parent company Alphabet Inc., Microsoft Corp. and
Intel Corp. — destroyed expectations for profit and revenue in
third-quarter reports Thursday afternoon, collectively bringing in about $2.2
billion more profit and $19 billion more revenue than the same quarter a year
ago.” Story at…
This may be enough to avoid a pullback for a bit longer.
Short-term I am still leaning bearish, but I remain
bullish longer-term. One wonders when this party will end so I will worry if
the numbers deteriorate, but for now I remain fully invested.
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.
I thought it would be interesting to apply the ETF
ranking system methodology to the Dow 30.
The quick way to do it was to keep the number of stocks the same as my
ETF ranking system so here is a ranking of 15 DOW stocks.
TODAY’S RANKING OF 15 DOW STOCKS (Ranked Daily)
The top ranked ETF receives 100%. The rest are then
ranked based on their momentum relative to the leading ETF. Avoid GE, Merck and Disney. Their 120-day
moving averages are falling.
Caterpillar (CAT) remained #1.
*I rank the Dow 15 similarly to the ETF ranking system.
For more details, see NTSM Page at…
SHORT-TERM TRADING PORTFOLIO - 2017 (Small-% of the
total portfolio)
LONG
We didn’t get a good signal on the Top. Looks like I’ve
missed the opportunity to short (or buy the VIX) because the signal wasn’t very
strong Friday. It’s still possible we might get a signal to take a short-term
VXX position.
My shorting rule is as follows:
-“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 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,
Sentiment, Price, VIX & Volume indicators were neutral. With VIX
recently below 10 for a couple of days in May, June, July, August, September
and now October, 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.
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