“U.S. home sales increased more than expected in October
as hurricane-related disruptions dissipated, but a chronic shortage of houses
which is pushing prices beyond the reach of some first-time buyers remains an
obstacle. The National Association of Realtors said on Tuesday that existing
home sales rose 2.0 percent…last month.” Story at…
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 was up about 0.7% to 2599.
-VIX was down about 9% to 9.73. (Just a reminder; VIX
below 10 is an extreme low number indicating extreme complacency. The only time
VIX has been below 10 in the past was about 6-months before major crashes. 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 rose to 2.356s%.
Up-Volume is now moving up on a 10-day basis and more
than half of the volume on the NYSE has been up-volume over the last 10-days.
The same is true for the number of advancing stocks – 52% have been up over the
past 10-days. New-highs have jumped up and are easily outpacing new-lows on a
daily basis. This is all bullish
suggesting the trend is up.
My Indicators improved today and are improving on a
longer-term basis. The daily sum of
17-indicators was -9 four days ago and today it was +2. It improved again on a
10-day basis. Late-day action (the smart money) is now headed up over the last
2-weeks and that’s a bullish sign in the short-term. Utilities were up today, but
were the worst of the ETFs I track except for Energy. That is a bullish sign
too. Utilities are a safe-haven when the markets are in trouble.
I am bullish short-term because indicators are currently
improving. My guess is that it is not
likely to continue too much longer; Sentiment is very close to the extreme
readings that sometimes reverse the direction of the Index and the Index is
close to its upper trend line.
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) 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.
Walmart (WMT) and Intel (INTC) remain essentially tied at
#1 today.
Walmart?...
“The mighty Amazon.com has been a game-changer, a
disrupter, an online retail pioneer that seems to be unstoppable. But old Wal-Mart Stores Inc. has a
few tricks up its sleeve. The Bentonville, Ark.-based company’s investments in
its employees, its online offerings and delivery, and its stores are paying off
in a major way. Investors in Seattle-based Amazon should pay attention.”
Commentary at…
Avoid GE, IBM, Merck, United Technologies, Verizon 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)
LONG
I sold my VXX position at a slight loss of 0.1% Friday. I
had been up 7%, but the improvements in the markets caused VIX to tank and it reversed
my profit in 2-days.
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
These rules must
make one careful when shorting.
TUESDAY MARKET INTERNALS (NYSE DATA)
Market Internals
were 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
Tuesday,
Sentiment, Price, 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.
