This Month's Synopsis:
EQUITY MARKET CONCLUSION:
Stocks: Stay Long
The RITE Index is high. This indicates strong bull market forces present.
The following is this month's Report:
The RITE REPORT
The following RITE Report generates indices from the monthly compilation of business, economic, & political news snippets from the Wall Street Journal, IBD, U.S. Government, et al.
Chris Angle, Editor
222 Boston Post Road, #244
Waterford, CT 06385
Please note that custom economic and/or macro investment research and wealth advisory services are available on request.
PART 1 - STOCKS
1) Macro-Economic Snippets w/Index
2) Indicators for Technical Analysis
3) Overall Investment Strategy Index
PART 2 - HEDGING
1) Hedging and Inflation Snippets
2) Hedging Summary
PART 1 - STOCKS
1) Macro-Economic Snippets
A) Negative Economic and General Business Data Snippets
-IBD: The IBD/TIPP Economic Optimism Index fell to 51.7 in April, down from 55.3 in March. After hitting a 12-year high of 56.4 in February, optimism has fallen almost all the way back to where it was at the start of November, before the surprise election of Donald Trump.
-IBD: Retail sales fell for a second straight month in March, hurt by fewer purchases of automobiles, the Commerce Department reported Friday. Meanwhile, monthly consumer prices fell for the first time this year, easing inflation, Labor Department data showed.
-IBD: New-home construction in the U.S. cooled in March to a four-month low as starts of single-family properties settled back from the strongest pace in almost a decade, Commerce Department data showed Tuesday.
Construction of single-family houses declined 6.2% to an 821,000 rate
-IBD: Groundbreaking on multifamily homes, such as townhouses and apartment buildings, decreased 7.9%
-CENSUS: Privately-owned housing starts in March were at a seasonally adjusted annual rate of 1,215,000. This is 6.8 percent (±12.5 percent)* below the revised February estimate of 1,303,000, but is 9.2 percent (±9.1 percent) above the March 2016 rate of 1,113,000.
-CPB: The CPB World Trade Monitor shows that the volume of world trade decreased 0.6% in February, having increased 1.0% in January (initial estimate: 0.0%).
-Fed Reserve: The most recent observation is 1.428 for Q1 2017 down from 1.437
Total of Negative General Business and Economic News Snippets: 7
B) Positive Economic and General Business News Snippets
-IBD: The Institute for Supply Management's manufacturing survey index out Monday eased to 57.2 in March, a modest deceleration after the gauge of factory activity hit a 30-month high in February. The new orders index slipped to 64.5 from a longtime high of 65.1, while the current production gauge slid to 57.6 from 62.9. The employment gauge jumped 4.7 points to 58.9, a six-year high.
-IBD: Companies added workers to U.S. payrolls in March at the fastest pace since December 2014 on solid gains in construction and manufacturing and at small businesses, data from the ADP Research Institute in Roseland, New Jersey, showed Wednesday.
-BLS: The unemployment rate declined to 4.5 percent in March, and total nonfarm payroll employment edged up by 98,000. Employment increased in professional and business services and in mining, while retail trade lost jobs.
-IBD: Key Points: Value of purchases fell 0.2% (in line with median forecast) after February sales were revised to a 0.3% decrease (previously reported as a 0.1% gain). But underlying retail sales, which are used to calculate GDP and exclude the categories of food services, auto dealers, building materials outlets and gasoline stations, rose 0.5% after falling 0.2 percent Over the last three months, core retail sales increased an annualized 4.1%, compared with 3.8% at the end of last year.
-BLS: Real average hourly earnings increased 0.5 percent in March, seasonally adjusted. Average hourly earnings increased 0.2 percent, and CPI-U decreased 0.3 percent. Real average weekly earnings increased 0.5 percent over the month.
-IBD: The New York Federal Reserve's Empire State manufacturing index fell to 5.2 in April from March's 16.4. That was well below estimates for 15.0, though the reading is still positive, indicating growth. Meanwhile, the National Association of Home Builders' Housing Market Index for April fell three points to 68. That's below views for a reading of 70, but it's still close to March's 11-year high and well above the break-even 50 level.
-USCB: U.S. Census Bureau released new data on building permits in March 2017 showing a seasonally adjusted annual rate (SAAR) of 1,260,000, up 3.6 percent from the revised February rate, and up 17.0 percent from March 2016.
-IBD: Housing starts in March 2017 were at a SAAR of 1,215,000, down 6.8 percent from February 2016, but up 9.2 percent from March 2016.
-IBD: Completions of single-family dwellings increased to an 819,000 annual rate, the most since September 2008.
-IBD: The economy continued to grow across the U.S. at a modest-to-moderate pace in recent weeks as a tight labor market helped broaden wage gains, though consumer spending was mixed, a Federal Reserve survey showed Wednesday.
-BLS: In the third quarter of 2016, gross job gains from opening and expanding private-sector establishments were 7.7 million. Gross job losses from closing and contracting private-sector establishments were 7.0 million.
-BEA: Real gross domestic product (GDP) increased at an annual rate of 0.7 percent in the first quarter of 2017 (table 1), according to the "advance" estimate released by the Bureau of Economic Analysis. In the fourth quarter of 2016, real GDP increased 2.1 percent.
-ESA: Personal income in March 2017 increased 0.2 percent. Nominal personal consumption expenditures (PCE) was virtually unchanged, and real PCE increased 0.3 percent. Nominal disposable income (DPI) rose 0.2 percent and real DPI increased 0.5 percent. The personal saving rate as a percentage of DPI was 5.9 percent in March. PCE price index down 0.2 percent. Core PCE price index (excluding food and energy) down 0.1 percent.
-BEA Personal income increased $40.0 billion (0.2 percent) in March according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI) increased $35.0 billion (0.2 percent) and personal consumption expenditures (PCE) increased $5.7 billion (less than 0.1 percent).
-IBD: The Institute for Supply Management's manufacturing survey index out Monday fell to 54.8 in April, a further deceleration after the gauge of factory activity hit a two-and-a-half year peak of 57.7 in February. The new orders index slid to 57.5 from 64.5, while the current production gauge rose to 58.6 from 57.6. The employment gauge dropped to 52.0 from March's six-year high of 58.9. The gauge of order backlogs was roughly stable at 57.0. (Readings above 50 signal expansion, while those south of 50 suggest contraction.)
-ESA: Construction spending during March 2017 was estimated at a seasonally adjusted annual rate of $1,218.3 billion, 0.2 percent (±2.1 percent)* below the revised February estimate of $1,220.7 billion. The March figure is 3.6 percent (±1.5 percent) above the March 2016 estimate of $1,176.4 billion. During the first 3 months of this year, construction spending amounted to $259.5 billion, 4.9 percent (±1.6 percent) above the $247.5 billion for the same period in 2016
Total of Positive General Business and Economic News Snippets: 16
Table of Positive v. Negative General Economic & Business News
Month % Neg % Pos
Jan 38% 62%
Feb 38% 62%
March 50% 50%
April 30% 70%
May 36% 64%
June 47% 53%
July 37% 63%
August 24% 76%
Sept 49% 51%
Oct 36% 64%
Nov 43% 57%
Dec 27% 73%
Jan 40% 60%
Feb 41% 59%
March 47% 53%
April 49% 51%
May 42% 58%
June 38% 62%
July 54% 46%
Aug 31% 69%
Sept 38% 62%
Oct 32% 68%
Nov 14% 86%
Dec. 32% 68%
Jan 34% 66%
Feb 04% 96%
3) Economic Analysis/Indicator Summary
(DAILY) - HIGH YIELD BONDS (HYG)
Downticked (02/28 - 87.90; 04/04 - 87.39) Negative
(DAILY) - iSHARES SELECT DIVIDEND (DVY)
(02/28 - 92.29; 04/04 - 90.81) Downtick Negative
04/03 - PURCHASING MANAGERS INDEX 57.7 to 57.2: Growth rate decreased but Orders Expanding: Positive
04/03 - CONSTRUCTION SPENDING (Census Bureau) Up + 0.8% month to month - Positive; Year over year + 3.0% Positive; Combined - Positive
04/04 - MANUFACTURERS’ SHIPMENTS, INVENTORIES, & ORDERS (Census Bureau): + 1.0%: Positive
03/02 - (BLS) UNEMPLOYMENT Overall: Positive
03/10 - Unemployment Rate (BLS): Downtick to 4.7%: (Positive)
Civilian Labor Force Participation Rate (BLS): 62.9% - 63.0% (Positive)
Employment-Population Ratio (BLS): Uptick 59.9% - 60.0% (Positive)
03/13 - Employment Trends Index (The Conference Board TM) Increased Slightly (Positive)
03/20 - QUARTERLY FINANCIAL REPORT - MFG, MINING, WHOLESALE, SERVICE (Census Bureau) - Manufacturing corporations' seasonally adjusted after-tax profits were $144.1 billion for the fourth quarter of 2016, down $6.6 (+/- 1.2) billion from third quarter of 2016. Negative
03/15 - RETAIL SALES (Dept of Commerce) +0.1% from previous month - Pos. & 5.7 percent (±0.9 percent) above February 2016
03/15 - MANUFACTURING AND TRADE INVENTORIES AND SALES (Census Bureau): + 0.3%: Positive
03/31 - INDUSTRIAL PRODUCTION INDEX (INDPRO) - Positive
Uptick: 103.6210 - 103.7332 - Positive
(Year over Year 103.2685 - 103.7332 Positive
(5 yr. Overall - Negative)
03/16 - HOUSING STARTS (Dept of Commerce): Positive
(month over month) + 3.0% Positive
(yr over yr) + 6.2% Positive
03/17 - CONFERENCE BOARD
LEADING ECONOMIC INDICATORS ™ Increased: Positive
03/17 - CONFERENCE BOARD
COINCIDENT ECONOMIC INDICATORS ™ Increased: Positive
03/23 - NEW RESIDENTIAL SALES (Census Bureau) + 6.1% Positive
(Overall in uptrend)
03/22 - EXISTING HOME SALES (NAR) - 3.7%: Negative
(Overall in uptrend: + 3.8% yr over yr)
03/30 - REAL GDP (BEA) + 2.1%: Positive
BEA: Real gross domestic product (GDP) increased at an annual rate of 2.1 percent in the fourth quarter of 2016 (table 1), according to the "third" estimate released by the Bureau of Economic Analysis. In the third quarter of 2016, real GDP increased 3.5 percent.
03/31 - PERSONAL CONSUMPTION EXPENDITURES (Dept of Commerce - BEA) + 0.1%: Positive
03/31 - PERSONAL INCOME (Dept of Commerce - BEA) + 0.4%: Positive
03/28 - CONSUMER CONFIDENCE
(Conference BoardTM) Uptick: Positive
03/31 - RESTAURANT PERFORMANCE INDEX: 100.7 - Expanding: Positive
4) RITE Investment Strategy Index
0 = Neutral;
+10 = High Opportunity Environment;
-10 = Extreme Negative Risk Miasma
EFFORT, RISK, FREEDOM,
1) Domestic Political Risk + 8 Excellent: New adm proposals look good.
2) Tax Risk + 6 Taxes to go down but when is not clear
3) Individual Incentive (Freedom) + 8 Regulations are to decrease in 2017
4) Production of Knowledge + 8 Economy positive; Corp. profits turning up
5) Technical Analysis + 8 Market: Bullish
of the U.S. Stock Markets
6) General Business
& Economic Snippets + 8 Positive Snippets 81%
7) Economic Indicators + 8 Positive Increase:
16 Pos; 4 Neg; 0 Neu
Sum of Total + 54
Average of Total + 7.4
RITE Strategy Index: 89%
History of Strategy Index (Started 2009) Statistics noted below are approximate.
Month/Yr Index % DJIA Gold Oil USD Index
Jan 31 65.6% 17,164.95 1,283.0 47.85 95.05
Feb 28 66.1% 18,132.70 1,213.6 49.52 95.295
Mar 31 63.3% 17,776.12 1,186.5 47.30 98.395
May 1 67.2% 18,024.06 1,177.4 59.26 95.385
May 29 66.7% 18,010.68 1,190.5 60.23 96.915
June 30 66.1% 17,619.51 1,173.7 58.80 95.745
July 31 70.6% 17,689.86 1,095.0 46.77 97.340
August 31 66.7% 16,528.03 1,132.5 49.20 95.58
Sept 30 64.4% 16,284.70 1,114.5 45.09 96.48
Nov 09 63.9% 17,730.28 1,090.9 44.02 99.02
Dec 31 63.9% 17,425.03 1,060.5 37.07 98.683
Jan 29 56.1% 16,466.30 1,118.6 33.11 99.55 USD Index 91.58 WSJ Index
Feb 29 56.1% 16,516.50 1,244.7 33.74 89.88 WSJ Index
Mar 31 55.6% 17,685.09 1,233.1 37.79 86.58 WSJ Index
April 30 53.3% 17,773.64 1,294.9 45.99 84.98 WSJ Index
May 31 57.2% 17,787.20 1,220.4 48.82 87.50
July 1 57.8% 17,929.99 1,344.9 49.28 86.58
July 29 55.5% 18,432.24 1,357.9 41.38 86.50
Sept 02 58.9% 18,491.96 1,328.8 44.20 86.84
Sept. 30 57.9% 18,308.15 1,318.8 48.05 86.37
Nov 2 60.7% 17,959.64 1,305.7 45.81 87.70
Dec 1 77.1% 19,191.93 1,176.3 50.64 91.50
Jan 2 77.1% 19,762.60 1,152.0 53.89 92.94
Feb 9 87.8% 20,172.40 1,232.9 53.03 90.94
Mar 1 90.0% 21,142.85 1,243.0 53.93 91.41
April 4 88.5% 20,689.24 1,257.2 51.32 90.29
EQUITY MARKET CONCLUSION:
Stocks: Stay Long; Go Long; Add to your positions
1) The RITE Index is remarkably high. This indicates lots of strong bull market forces present.
PART 2: HEDGING
1) HEDGING/INFLATION SNIPPETS FROM THE WSJ
None this month
IBD: The Federal Reserve's preferred measure of consumer prices climbed 0.4% from December and 1.9% from a year earlier, within a shade of its 2% target that was last met in April 2012. The core price measure, which excludes food and fuel, rose 0.3 percent from the prior month and was up 1.7% from January 2016.
DEFLATION SNIPPETS 0/0%
INFLATION SNIPPETS 1/100%
(RITE Report Issue Date is the first of the month; Statistical Data is the latest closing price which is noted in the WSJ on the close of the last day of the month, but the RITE Report does not represent that these data are accurate.)
Month Inflationdata.com CRB
Annual Inflation Rate
Sept 02 0.84% 179.99
Sept 30 1.06% 186.32
Nov 02 1.46% 184.29
Dec 01 1.64% 191.41
Dec 31 1.69% 192.512
2016 Average 1.26%
Feb 09 2.07% 192.756
Mar 01 2.50% 190.81
April 04 2.74% 185.59
2) HEDGING SUMMARY
Inflation remains subdued although the CRB has moved up, but now levelled off.
Gold: No call
Oil: No call.
The U.S. Dollar: Stay Long (Economy to go up)
For your reference we include a directory of:
The RITE Report Major Trade Advice Summary
Mrkt Level Market Advice
2009/05/01 8,212 Stocks Go long.
2009/05/01 895 Gold Go long.
2009/05/01 USD Go short
2009/06/01 51.12 Oil Go long
2010/02/01 USD Stop going short;
Take profits. get out.
2011/04/01 12,376 Stocks Market to go sideways;
end of bull.
2011/05/01 12,763 Stocks Take profits 55.4% Gain
2011/06/01 102.7 Oil Go Neutral 100.9% Gain
2011/06/01 12,441 Stocks Take profits (re-confirmation)
2011/07/01 USD Go short
2011/08/01 USD Cover the short; no direction
2011/08/01 12,240 Stocks Trading Range
2012/03/01 107 Oil Go long
2012/05/01 104 Oil Go neutral 2.8% Loss
2012/06/01 12,772 Stocks Take profits; a downtrend started
2012/06/01 1,564 Gold Sell: Take profits 74.7% Gain
2012/07/01 1,604 Gold Buy: Go long
2012/08/01 13,090 Stocks Advised not to be in the Stock Market at all
2012/09/01 80.025 USD Go short
2012/11/01 13,096 Stocks Confirmation: Not to be in Stock Market
2013/01/02 13,104.30 Stocks Go Long
2013/03/01 82.47 USD Index Take loss; go neutral
2013/05/31 15,115.57 Stocks Take profits 15.3% Profit
2013/08/01 15,499.54 Stocks Go Long
2013/12/01 92.78 Oil Go Short
2014/01/02 98.70 Oil Take off short: Go Neutral 6.38% Loss
2014/02/28 16,321.71 Stocks Take profit; go to cash 5.0% Increase
2014/03/01 16,532.61 Stocks Go long (Unrealized gain potential)
2014/10/31 1,173.5 Gold Sell (1,604 to 1,173.5 loss of 430.5) 36.8% loss
2015/01/30 1,283.0 Gold Go long
2016/04/04 35.32 Oil Go long
2016/07/01 49.05 Oil Take Profit - 38% Gain
2016/12/02 1,176.3 Gold Sell - Loss 8.3%
2016/12/02. 91.50 WSJ Dollar Index Go Long
Stocks (DJIA) 20,689.24 Stay Long (Unrealized gain potential)
Gold 1,257.2 No call
US Dollar 90.29 Stay Long (Unrealized loss potential)
Oil 51.32 Neutral; No Call
Please note that custom economic and/or macro investment research and advisory services are available on request.
1) Past performance is not indicative of future results.
2) Trading stocks, futures, and options involves substantial risk of loss and is not suitable for all investors.
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Waterford, CT 06385
(The RITE Report’s name was derived from the acronym of the four variables inherent in all economic transactions; Risk, Information/Knowledge, Time, and Effort. Of course, this would be for a service, and if the product were a material good, there would be an additional factor of Material - or Land as the economist would say. See The Philosophical Equations of Economics at www.philosophypublishing.com for further info on this subject.)
FOR YOUR REFERENCE
1) Chris Angle is the author of:
The Nature of Aesthetics - 978-0-9661126-4-1
Defining Ethics Good & Evil - 978-0-9661126-5-8
Truth and the Nature of Decisions - 978-0-9661126-6-5
The Philosophical Equations of Economics - 978-0-9661126-3-4
These books may be viewed at: www.philosophypublishing.com
2) Chris Angle is the host of The Philosophical Angle, a TV and Podcast Program, which discusses concepts in current media.
1) Past performance is not indicative of future results.
2) Trading stocks, futures, and options involves substantial risk of loss and is not suitable for all investors. Carefully consider the suitability based upon your experience, objectives, financial resources and other relevant circumstances. Alternative investment products, including hedge funds and managed futures, involve a high degree of risk. Alternative investment performance can be volatile and are not suitable for all investors. An investor could lose all or a substantial amount of his or her investment.
3) This communication does not constitute an offer to sell, or a solicitation of an offer to buy or sell, any products named herein, commodities interests, futures contracts, or securities, and is intended for informational purposes only. Any offer for any investment product will be made solely by the appropriate disclosure document or private placement memorandum.
4) The RITE Report has been prepared either from publicly available information or reflects the opinions of the author. Information contained in this report is believed to be reliable but may not have been independently verified. The RITE Report does not guarantee, represent or warrant, or accept any responsibility or liability as to, the accuracy, completeness or appropriateness of the information contained herein. At no time will the RITE Report make specific recommendations for any specific person, and at no time may a reader, caller or viewer be justified in inferring that any such advice is intended. Information contained herein may not be current due to, among other things, changes in the financial markets or economic environment. Opinions reflected in the materials are subject to change without notice. Forecasts represent estimates. Information provided by the RITE Report is expressed in good faith, but it is not guaranteed. Long-term success, trading or investing in the markets, demands recognition of the fact that error and uncertainty are part of any forecasting effort. Investing carries risk of losses. Information provided by the RITE Report does not constitute, and should not be used as a substitute for tax, legal, or investment advice. Please ask your broker or your advisor to explain all risks before making any trading and
5) Commodity Futures Trading Commission: Futures, Options and foreign currency trading have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to Buy/Sell futures or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results.
CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.