JOB OPENINGS (Bloomberg)
“Job openings in the U.S. unexpectedly declined in
December to a seven-month low even as workers increasingly left positions
voluntarily, Labor Department data showed Tuesday…Number
of positions waiting to be filled fell by 167k to 5.81m…” Story at…
CRUDE INVENTORIES (Oil Price.com)
“The American Petroleum Institute (API) reported a surprise
draw of 1.050 million barrels of United States crude oil inventories for the
week ending January 30, according to the API data.” Story at…
XIV (CNBC)
“Credit Suisse said it will end trading in a security
that some investors believed was exaggerating movements in volatility futures
markets and even the overall stock market. The last day of trading for VelocityShares Daily Inverse VIX
Short-Term exchange-traded note (XIV) will be Feb. 20,
according to an announcement from Credit Suisse. The bank is triggering this
liquidation because the product during these last three volatile days could not
keep up with the scenario it was supposed to track: a calm market.” Story at…
My cmt: This was an amazing situation that developed in XIV.
It was designed as a short for VIX. With VIX down 20% Tuesday, XIV should have been
a money maker. Instead, XIV was down 93% on Tuesday after losing almost as much
on Monday after hours. I visited a trader discussion board and saw that several traders bought
XIV Monday – they may have gotten wiped out today.
IT’S JUST A FLESH WOUND (RIA)
“If the market rallies back and sets a new closing
high, the bullish trend will be confirmed and equity allocations will
remain at target levels and hedges removed.
If the market rallies back BUT FAILS to set a new
high, a series of actions will take place:
-At the point of rally failure, portfolio hedges will be
modestly increased.
-If the subsequent decline breaks the previous low, the
hedges will be further increased and tactical trading long positions will be
reduced.
-With the “sell signal” being issued at such a
high level technically, I certainly expect any rally to ultimately fail
before setting new highs. As stated, any failed rally will be used to
reduce long-equity exposure and rebalance hedges accordingly.” – Lance Roberts.
Commentary at…
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 jumped about 1.7% to 2695.
-VIX dropped about 20% to 29.98.
-The yield on the 10-year Treasury rose to 2.804%. This
isn’t likely to settle markets.
Sentiment was up again on Monday (data was not available
until late Monday evening) so I think this bounce is likely to fail. The stock market doesn’t usually, hold its
value with Sentiment at these levels. We
need to see shorts move into the market to bring the sentiment values out of
the stratosphere.
My sum of 17 Indicators remained at -12 today. (A “-”
number means that most indicators are bearish.) On a Longer term, smoothed
basis to avoid the daily fluctuations, the indicators remain bearish.
The Overbought/Oversold Ratio (aka the Advance-Decline
Ratio) remains oversold, but both Bollinger bands and RSI turned neutral.
The 5-10-20 Timer is signaling “sell” today. The 5-dEMA and
the 10-dEMA have dropped below the 20-dEMA for the S&P 500 Index. This is a
decent, simple timing system.
I am bearish short-term. We got the expected bounce
Tuesday, but like Jeffery Saut, I don’t expect the overall trend to turn
positive. I think there is more downside
ahead after the bounce concludes.
Longer term, my long-term indicator remained negative,
but since I have already dropped stock holdings to 40% I am not planning to
make further changes now. If the market recovers while Indicators remain
negative, I’ll be a seller.
TODAY’S RANKING OF
15 ETFs (Ranked Daily)
In corrections
this chart may be less valuable – all stocks are falling.
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%. In 2017 Technology (XLK) was ranked in the top 3
Momentum Plays for 52% of all trading days in 2017 (if I counted correctly.)
XLK was up 35% on the year while the S&P 500 was up 18%.
*For additional background on the ETF ranking system see
NTSM Page at…
TODAY’S RANKING OF THE DOW 30 STOCKS (Ranked Daily)
In corrections
this chart may be less valuable – all stocks are falling.
The top ranked stock receives 100%. The rest are then
ranked based on their momentum relative to the leading stock. Avoid GE, Procter
& Gamble 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…
TUESDAY MARKET INTERNALS (NYSE DATA)
Market Internals
remained to Negative 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, Volume and VIX Indicators were negative; Price improved
to neutral.
MY INVESTED STOCK POSITION:
TSP (RETIREMENT ACCOUNT – GOV EMPLOYEES) ALLOCATION
I shifted to a
conservative 40% invested in stocks and 60% in cash on 31 Jan. For the TSP,
that would be 40% in the S&P 500 Index fund (C-Fund) with the remainder 60%
G-Fund (Government securities) on 31 Jan.
