“U.S. employers added the most workers in a year,
rebounding from September’s slowdown, as people resumed work after hurricanes
Harvey and Irma…Payrolls rose 261k (est. 313k) after 18k advance; revisions
added 90k to Aug.-Sept. figures, including turning Sept. drop into a gain…”
Story at…
ISM SERVICES (Fox Business)
“A broad gauge of U.S. economic activity ticked up in
October to its highest level since August 2005. The Institute for Supply
Management on Friday said its nonmanufacturing index rose to 60.1 in October
from 59.8 in September.” Story at…
http://www.foxbusiness.com/features/2017/11/03/u-s-service-sector-index-rose-to-60-1-in-october.html
FACTORY ORDERS (CNBC/Reuters)
“New orders for U.S.-made goods rose for a second
straight month in September…Factory goods orders increased 1.4 percent as
demand for a range of goods rose, the Commerce Department said on Friday.”
Story at…
MARKET REPORT / ANALYSIS
-Friday the S&P 500 was up about 0.3% to 2588.
-VIX was down about 8% to 9.14. (Unbelievable! VIX almost
broke below 9 today.)
-The yield on the 10-year Treasury slipped to 2.332%.
This will look similar to my comment on the 27 October,
because the symptoms remain:
Running out of Gas:
-3.7% of stocks on the NYSE made new-highs today. At the
prior all-time high on 27 October, 6.1% of stocks made new highs.
-The % of advancing stocks was 62% at the prior all-time
high on 27 Oct. At today’s new all-time high, only 48% of stocks were advancing
on the NYSE.
-Up volume was 57% of the total on 27 Oct. Today it was 49%.
It’s not good to see numbers <50% for advancing shares
and advancing volume, especially at a new high. Usually the Indices follow the
smaller stocks, so I still expect some backsliding on the S&P 500.
Smart money (late-day action) was fairly flat today, but
it is falling on a 10-day basis and has been for several weeks. The sum of
17-indicators is looking even more bearish long-term even though it was
unchanged at -6 on the day today. (A
minus number indicates that more indicators are bearish than bullish.
I still think down is more likely than up, but we’ll see.
See Friday’s blog post for more thoughts on the Markets – they haven’t changed
much. Friday’s Blog post is here…
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.
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 #2; Aerospace and Defense (ITA) moved
back into #1 today. Of course they did now that I sold ITA.
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.
Intel (INTC) remained #1 today. I have owned Intel for
some time – I bought more Halloween, 10/31/2017. Avoid GE, Merck and Disney.
Their 120-day moving averages are falling.
*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
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. I am still holding this position. We’ll
see.
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, but the Price indicator continues
to slip down. 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.
