“The pace of growth in the vast U.S. services sector slowed in March to the lowest level in seven months as new orders and employment measures pulled back, an industry report showed on Wednesday. The Institute for Supply Management said its services index fell to 54.4 last month from 56 in February, falling short of economists' forecasts for 55.8.” Full story at...
http://www.cnbc.com/id/100612463
The good news (for the bulls) is that the ISM number was above 50 so it
is still expanding, albeit slower.
ADP – JOB CREATION SLOWING
“A joint report Wednesday from ADP and Moody's Analytics showed 158,000
new positions, well below economist expectations of 200,000.” Full story at...http://www.cnbc.com/id/100612273
WHY I THINK THE MARKET IS TOPPING
RE: Further details on why I think the market is topping
- here’s another one:The following chart shows that for the past month, investors are selling Cyclical stocks (Morgan Stanley Cyclical Index/^CYC - aggressive positions) and buying Utility stocks (Dow Jones Utility Index/DJU - defensive positions) when compared to the S&P 500. This shows that investors aren’t just talking about a pull-back; they are betting on it.
RE: Further details on why I think the market is topping - here’s another one:
HIGHEST PERCENTAGE OF NEGATIVE
EARNINGS GUIDANCE - FACTSET
“For Q1 2013...the overall
percentage of companies issuing negative EPS guidance to date for Q1 2013
stands at 78% (86 out of 110). If this
is the final percentage for the quarter, it will mark the highest percentage of
companies issuing negative EPS guidance since FactSet began tracking guidance
data in Q1 2006.” Quote from FACTSET. Analysis
at the Reformed Broker at...http://www.thereformedbroker.com/2013/03/29/factset-negative-earnings-guidance-at-seven-year-highs/
First quarter earnings are expected to be poor and this is widely known. I even saw a pundit on CNBC state that earnings wouldn’t matter because this was already “Baked-in-the-cake.” I don’t buy that. The market has gone straight up since late November. If it was already baked in, then the S&P 500 should have gone down at some point over the earnings concerns. The markets seem unconcerned with earnings – don’t worry; the Fed will fix everything.
EVEN TRADERS ARE CONFUSED!
TRADER-1 COMMENT: “The
only thing that makes sense to me [why the market continues up] is that the ROW
(Rest Of World) is fleeing to the US markets for refuge. I can't understand it
any other way. Such a move would bolster the US $ and the markets at the same
time. I'm just baffled and I'll hang with my puts for a little longer
because I'm stubborn ;)”TRADER-2 COMMENT: “Exactly! imo It's not based so much on fundamentals now. Throw out the charts and indicators, they might not work till the fever breaks. The current best market strategy is just to follow the trend.”
The above exchange is probably a pretty good explanation of recent
market action. Of course if I believed it, then the right thing for me to do would be to buy back into the stock market since the trend remains up. I can't - I just don't have the nerve; it still looks like this market will break soon. We'll see.
MARKET RECAP
Wednesday, the S&P 500 finished down 1% to 1554 (rounded). In 2-days (Mon & Wed) the S&P 500 gave up 2-weeks of gains.
Wednesday, the S&P 500 finished down 1% to 1554 (rounded). In 2-days (Mon & Wed) the S&P 500 gave up 2-weeks of gains.
VIX rose 11% to 14.21.
NTSM
Tuesday, the NTSM analysis remained HOLD at the close. The numerical NTSM analysis has not yet confirmed
my “off-the-grid” top-call.
The indicators declined, but there is no sell signal yet in the NTSM
analysis. Sentiment is a sell; Price,
Volume and VIX are all neutral.
MY INVESTED POSITION
I remain about 20% invested in stocks as of 5 March (S&P 500 -1540),
due to my risk tolerance rather than the numerical NTSM analysis. To put it bluntly, I currently have no
tolerance for risk. (If I were strictly
following the NTSM numbers, I'd still be heavily invested in stocks.) My
reasoning may be found at…http://navigatethestockmarket.blogspot.com/2013/03/why-i-got-mostly-out-of-stock-market.html
