“The number of people who applied for unemployment
benefits in late January fell by 1,000 to 230,000, keeping initial U.S. jobless
claims near a 45-year low.” Story at…
PRODUCTIVITY (US News)
“U.S. productivity edged down at a 0.1 percent rate in
the fourth quarter. It was the weakest showing in nearly two years and further
evidence of the struggles the country is having boosting worker efficiency.”
Story at…
ISM INDEX (Investing.com)
“Manufacturing activity in the U.S. fell less than
expected in January, boosting optimism over the American economy, according to
an industry report released on Thursday. The Institute for Supply Management
(ISM) said its index of
manufacturing activity decreased to 59.1 last month…” Story at…
CONSTRUCTION SPENDING (Bloomberg)
“Even with solid U.S. economic growth, construction
spending rose in 2017 by the least in six years, as nonresidential building
slowed and outlays by governments declined. The value of construction put in
place increased 3.8 percent to $1.23 trillion last year…” Story at…
MARKET REPORT / ANALYSIS
-Thursday the S&P 500 slipped about 0.1% to 2822.
-VIX dropped about 0.5% to 13.47.
-The yield on the 10-year Treasury rose to 2.793%.
My sum of 17 Indicators slipped from -4 to -5 today. (A
“-” number means that most indicators are bearish.) On a Longer term, smoothed
basis to avoid the daily fluctuations, the indicators are falling and remain bearish.
Market Internals remain negative so it’s too early to
tell whether there will be a pullback or if this little glitch is another false
alarm.
I am bearish short-term. Longer term I remain 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%. 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)
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…
THURSDAY 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
Thursday, the Price indicator was positive; Sentiment, Volume &
VIX indicators were neutral.
MY INVESTED STOCK POSITION:
TSP (RETIREMENT ACCOUNT – GOV EMPLOYEES) ALLOCATION
I shifted to 40% stocks in the S&P 500 Index fund
(C-Fund) with the remainder is 60% G-Fund (Government securities). This is a
conservative position given the number of negative signs observed recently. My
normal fully invested position is only 50% so I am not drastically bearish.
For Government employees: Making a TSP change late in a
month preserves 2 moves for the next month since the TSP only allows 2 changes
per month. After that one can only add to the G-Fund.
