“A measure of US small business optimism hit its highest
level since 1983 last month, according to a National Federation of Independent Business survey released
Tuesday. The index gained 3.7 points in November, a big jump from the
near-record performance seen in the previous month…” Story at…
PRODUCER PRICE INDEX (Business Insider)
“US producer price inflation surprised on the upside once again last month amid a rebound in oil prices that is helping to drive up business costs. The producer price index – a key measure of industrial inflation – was up 0.4 per cent in November from the previous month…” Story at…
“US producer price inflation surprised on the upside once again last month amid a rebound in oil prices that is helping to drive up business costs. The producer price index – a key measure of industrial inflation – was up 0.4 per cent in November from the previous month…” Story at…
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 was up about 6to 2664.
-VIX was down about 6% to 9.92.
-The yield on the 10-year Treasury rose to 2.401%.
My sum of 17 Indicators improved from +1 to +2 on the
day, but slipped a little on a smoothed 10-day basis. A “+” number means there
are more bullish indicators than bearish. As noted yesterday, there’s not much
change. Here’s are most notable bearish indicators:
-RSI remains bearish at 80.
-Breadth is slipping vs. the S&P 500; it is clear
that the Index has gotten way ahead of the underlying % of stocks
advancing. That is usually bearish, but
not necessarily in a big way. I am still
leery of the advance in the S&P 500.
We are due for a stall or pullback of some kind – we’ll see.
In the near term I am leaning neutral to bearish; longer
term I am a bull.
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…
Financials (XLF) remain #1. The markets look a bit
strained so perhaps I’ll get a better buying opportunity. I’ll wait before adding any positions. (I
hold XLK, DVY and SPY.)
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.
Caterpillar (CAT) was #1. (I hold Intel.)
Avoid GE and Merck. 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
remained 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
Tuesday, Price indicator was positive; Sentiment, Volume & VIX
indicators were neutral. With VIX recently below 10 for a couple of
days in May, June, July, August, September, October, November and now December,
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.
