HOME SALES (Reuters)
“Sales of new U.S. single-family homes unexpectedly rose
in October to hit a 10-year high amid robust demand across the country,
offering a boost to the housing market.”
Story at…
MARKET REPORT / ANALYSIS
-Monday the S&P 500 was essentially unchanged at 2601.
-VIX was up about 2% to 9.87. (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 dipped slightly to
2.330%.
Norman Fosbeck, author of “Stock Market Logic,” stated
that high unchanged volume was a sign of a market top since it indicates investor
confusion at a turning point. Unchanged volume today was very high at 141,000,000
shares on the NYSE. I had to go all the way back to April of 2017 to find a number
that high. That was during a small drop
of about 3%. I’ve only tracked unchanged volume for the past 2 years so I don’t
have enough experience with this stat to have an opinion. Over the past 2-years
it hasn’t been higher very often, but we haven’t had any real corrections in that
time either.
Other than unchanged volume, this write-up, looks a lot
like Friday. Just like last Friday, Indicators were unchanged at +1 on the day,
but 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.
On the Bearish side: Bollinger Bands are close to an
“overbought” indication and a Bollinger Band squeeze is possible. A squeeze usually is followed by a big move,
one way or the other. Because the Index is near its upper trend line and my
guess would be that a down move would be indicated should we actually get a
squeeze. RSI is currently neutral so I think these bear signals will be further
down the road,
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) remains #1 today with Walmart (WMT) a close
second.
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)
LONG
I sold my VXX position at a slight loss of 0.1% on 14 Nov.
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
MONDAY MARKET INTERNALS (NYSE DATA)
Market Internals were
Neutral 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
Monday, 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.
