US PMI Stays Flat at 49.8
LONDON, Aug 01, 2012
(BUSINESS WIRE) -- "US PMI data for July 2012 stays flat at 49.8 from 49.7 in
June 2012, this is indicative of a wider global malaise that is mirrored by not
only other regional PMI index's but also the results of major Semiconductor
vendors. Lack of manufacturing capacity for key components coupled with the
lack of investment in new fab space mean that this problem is likely to
continue for a number of months and will eventually limit the availability of
key flagship mobile products." Full story at...
MARKET
Wednesday
the S&P 500 finished down 0.3% to 1375.
The VIX rose 0.16% to 18.93 today.
I’ll
repeat yesterday’s comment (with today’s stat): Over the last month only 30% of
the trading days have been up. Sometimes
that sort of negative trend actually precedes a rally so we’ll see what
tomorrow (Thursday) brings. If we don’t
get a rally soon, there will be some serious selling.
Volume on the NYSE was 37%
above normal today, but there was little movement in price. Apparently, many were disappointed that the
FED didn’t announce more QE, but that was offset by other buyers who prevented
a big down day. The market did trade off
late in the day so the “smart money” took some money out of stocks, but my take
on the smart money overall is that they are still bullish in the short term.
(The pros tend to trade late in the day.
So there is a smart money index that follows late day trading.)
Over the last 5-months the
Morgan Stanley Cyclical Index has underperformed the S&P 500 by about 10%
so there is some recession worry reflected in stock prices. Even so, the NTSM indicators are relatively
upbeat.
NTSM
The
NTSM analysis was again BUY at the close on Wednesday.
Just keep in mind that the
NTSM indicators can switch in a hurry.
MY INVESTED POSITION
Based on the BUY signal, 6
July, I moved back into the market on 9 July (after the weekend) at S&P 500
1352. I now have a 50% stock allocation
overall. For my age, that is what most
advisors recommend, however, I am normally much more aggressive. I am underweight my usual aggressive
allocation for stocks because there’s a lot of risk now.
