“With “expectations” currently “off the
charts,” literally, it will ultimately be the level of interest rates
which triggers some “credit event” that starts the “great
unwinding.”
It has happened every time in history. Given the current
demographics, debt, pension and valuation headwinds, ten-year rates much
above 2.6% are going to start to trigger an economic decoupling.” – Lance
Roberts. Commentary at…
GOVERNMENT SHUTDOWN – POLITICAL THEATER (Off-Topic Rant
of a Former Government Employee)
“Today's cave by Senate
Democrats — led by weak-kneed, right-of-center Democrats — is why people don’t
believe the Democratic Party stands for anything,” said Stephanie Taylor, co-founder of
the Progressive Change Campaign Committee….What absurd crap.
All that is needed to avoid a Government shutdown is to
pass a continuing resolution. Typically,
that keeps the Government operating at last year’s levels. They are usually
short, uncomplicated bills. The problem arises when the minority party attempts
to blackmail a new administration by demanding that the continuing resolution
include issues important to the minority party or they’ll shut-down Government
and blame it on the party of the President.
It’s a huge waste of money; shows the minority party to
be petty and stupid; and never works. The Republicans tried it on Obama. Did it
work? Of course not. They should have reviewed the history of the Clinton
Administration when a 22-day Government shutdown made the Republicans look like
idiots and, in the end, cost Newt Gingrich his job. A party can’t shut down
Government (by refusing to support a continuing resolution) and then blame it
on the other Party – voters are stupid, but not that stupid…except perhaps for Stephanie Taylor, co-founder
of the Progressive Change Campaign and this time – the Democrats.
MARKET REPORT / ANALYSIS
-Tuesday the S&P 500 was up about 0.2% to 2839.
-VIX was up about 0.6% to 11.10.
-The yield on the 10-year Treasury slipped to 2.616%.
I am getting tired of writing the same stuff. Indicators are little changed and the market
keeps going up.
-My sum of 17 Indicators rose from -2 to +4 today. (A “+”
number means that most indicators are bearish.) Longer term, the indicators were
still drifting lower and that’s bearish.
I am bearish short-term. Actually, I have been bearish
since 3 Jan and the market is up more than 4% since then. As I have noted
frequently this year, complacency is reaching extremes. When the market will
break down is anyone’s guess – we have had plenty of bearish signs, but no
follow-through. We are due for a correction in 2018 due to Presidential
election cycle history, but I still wouldn’t short this market – there are too
many buyers. We’ve gone straight up, and it may continue.
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…
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%.
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 and
Merck. Their 120-day moving average is falling.
*I rank the Dow 30 similarly to the ETF ranking system.
For more details, see NTSM Page at…
Intel seems to have gotten past the recent chip design
issues and investors have apparently decided to move back into Intel. It’s up
nearly 5% in the last 5-dasy and may be worth another look. Low PE; Decent
Dividend. The question mark remains growth, but it did break out from a 3-year
plateau and is above that point now. It is still not a momentum play –it’s a
value play at this point.
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 and Volume indicators were positive; Sentiment &
VIX indicators were neutral. This adds up to a BUY indication, but at this
point a BUY signal is meaningless. The
NTSM system is designed to issue BUY signals near a Bottom as conditions rapidly
improve. Now, it is just an indication
that the market is doing well. The NTSM
long-term signal can sometimes signal BUY at the top if conditions are too good.
The last actionable Buy signal was on 15 November 2016.
MY INVESTED STOCK POSITION:
TSP (RETIREMENT ACCOUNT – GOV EMPLOYEES) ALLOCATION
I remain FULLY INVESTED at 50% stocks in the S&P 500
Index fund (C-Fund) with the remainder is 50% G-Fund (Government securities).
This is a conservative retiree allocation, but I consider it fully invested for
my situation.
