Thursday, May 2, 2013

Jobless Claims

"Initial jobless claims — a rough gauge of layoffs — sank by 18,000 to a seasonally adjusted 324,000 in the week ended April 27, the Labor Department said Thursday. That’s the lowest level since January 2008…Economists surveyed by MarketWatch had expected claims to rise to 345,000 from a revised 342,000 in the prior week."

Yesterday’s ADP jobs report wasn’t as rosy…

“Businesses added 119,000 jobs in March, payroll processor ADP said Wednesday, below economists' expectations. Job growth picked up from the prior month but remained mired in a spring slowdown…‘Job growth appears to be slowing in response to very significant fiscal headwinds,’ said Mark Zandi, chief economist at Moody's Analytics, which helps compile the report for ADP.”  Story at…

Dennis Gartman, Editor of the Gartman Letter: “Dr. Copper Is Sick," he said, adding that prices for aluminum and zinc were also heading lower. "And they don't argue for good economic growth…The base metals do speak loudly, and they're speaking very bearishly…Things [are starting]  to look very ugly in the world of commodities, and I really do think that that portends ill for the domestic – and for the global – economy," he said. – Dennis Gartman on CNBC
Story/Video at…

The following must cause concern for those of us who are bearish.  If there was doubt about why our markets have been rising and setting records for the duration of rise without a correction, this should remove it.

From CNBC: “Foreigners now hold more than $13 trillion in American securities, a record set as the U.S. seeks to assert itself as the safest port in troubled global waters.”  Story at…

Thursday, the S&P 500 was up 0.9% to 1,598 (rounded).
VIX was down 6% to 13.59           

Thursday, the NTSM analysis was again HOLD at the close. 

SENTIMENT is sell due to its extreme bullish level of 64%-bulls.  The VOLUME indicator (a variant of on-balance-volume) switched to positive on today’s big up-day.  PRICE and VIX are neutral.     

Today was a “statistically significant” day based on my analysis of price and volume action.   This usually results in a reversal the next day and the odds favor a down day for Friday and this may well be the top.  Honestly, with the rest of the world still fleeing their currencies to invest in US Stocks, and therefore US dollars, I really am wondering if this market is going to reverse…ever!  In any event, as a trader said on CNBC today on the floor of the NYSE, “I am uncomfortable with the market.  I’ve missed the last 5% of this move and I don’t mind telling anyone.”

I remain about 20% invested in stocks as of 5 March (S&P 500 -1540).  My reasoning may be found at…
The NTSM system sold at 1575 on 16 April.  (This is just another reminder that I should follow the NTSM analysis and not act emotionally – I am under-performing my own system by about 2%!)

I have no problems leaving 20% or 30% invested.  If the market is cut in half (worst case) I’d only lose 10%-15% of my investments.  It also hedges the bet if I am wrong since I will have some invested if the market goes up.  No system is perfect.