U.S consumer confidence surged to a near 17-year high in
November, driven by a robust labor market, while house prices rose sharply in
September, which should underpin consumer spending and boost economic growth.”
Story at…
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 was up about 1.1% to 2627.
-VIX was up about 1% to 9.95. (Just a reminder; VIX below
10 is an extreme low number indicating extreme complacency. Previously, when
VIX has been below 10 a crash followed about 6-months later. VIX doesn’t cause
a crash – it just warns that unexpected news may bring a lot of selling as
investors wake up to risk.)
-The yield on the 10-year Treasury was basically
unchanged at 2.329%.
Today was statistically significant in my system. That just means that the price-volume move up
on the S&P 500 exceeded statistical parameters that I track. The stats show that about 60% of
the time a statistically significant move up will be followed by a down day the
next day. I was tempted to take a VXX position, but there are not enough
bearish indicators for me.
Indicators were little changed on the day and continue to
improve when compared to 10-days ago. That’s good news for the bulls and
continues to support my bullish view in the short and long-term. Breadth is
improving; up-volume is 56% over the past 10-days; Cyclical industrial stocks
(XLI-ETF) are improving when compared to the S&P 500.
On the Bearish side: Bollinger Bands rose to an
“overbought” indication and the Smart Money (late day action) is still headed
down. RSI is currently neutral my guess is that it may take longer for the S&P 500 to make a
short-term top.
In summary: I am bullish short-term and 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) remained #1.
TODAY’S RANKING OF THE DOW 30 STOCKS (Ranked Daily)
The top ranked stock receives 100%. The rest are then
ranked based on their momentum relative to the leading stock.
Intel (INTC) and Walmart (WMT) were tied for 1st
today.
Avoid GE, Merck, United Technologies and Disney. Their
120-day moving averages are falling.
*I rank the Dow 30 similarly to the ETF ranking system.
For more details, see NTSM Page at…
SHORT-TERM TRADING PORTFOLIO - 2017 (Small-% of the
total portfolio)
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
were Positive on the market. (Market Internals are based on a package of
internals and all must be positive to create a positive indication.
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, Price was positive; Sentiment, VIX & Volume indicators
were neutral. With VIX recently below 10 for a couple of days in May,
June, July, August, September, October and now November, 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.
