1st Quarter GDP has been revised down to 1.8%. It had been previously reported at 2.4% and that was the number expected by most economists. This is a big downward revision and is cause for concern.
Read the Reuters story at http://www.cnbc.com/id/100845284
From CNBC: “Make no mistake about it: this is really
grim…The biggest source of the downward revision came from consumer spending.
Government economists had estimated that consumer services consumption
(excluding housing and utilities) would grow by 2.5 percent, instead it grew at
just 0.7 percent.” – CNBC at…
http://www.cnbc.com/id/100846027
COLLAPSE OF BOND DEMAND DOOMS THE STOCK MARKET
(ZeroHedge)
“[It is] the collapse in investment grade bond demand
that is dramatic (and worse than Lehman). [Lehman Brothers declared bankruptcy
in 2008.] It's not like we couldn't see
it coming at some point (here) and as we warned here, What Happens Next?
Simply put, stocks cannot rally in a world of surging debt
finance costs.” Story at…http://www.zerohedge.com/news/2013-06-25/bonds-its-lehman-repeat
FINANCIAL STRESS INDEX CLIMBING RAPIDLY (CNBC)
“The St. Louis Fed's Financial Stress Index has shot
upward in the past few months… The last three times that we've seen spikes like
this were during the U.S. financial crisis of 2008, during the acceleration of
the Greek crisis in May 2010 and in August 2011, when the U.S. credit rating
was downgraded by S&P.” Story at…http://www.cnbc.com/id/100842780
CONSUMER CONFIDENCE PEAKS (USA Today)
“Consumer confidence is at a five-year high. It has risen
three straight months, reaching 81.4 in June on a 100-point scale set in 1985.
The median forecast of economists in a Bloomberg survey was that the number
would be 75, up from 74.3 last month, highest confidence reading since before
the recession.”Story at…
http://www.usatoday.com/story/money/business/2013/06/25/consumer-confidence/2455203/
This looks like Consumer Confidence is correlating to the
high sentiment readings.
MORTGAGE RATES SPIKE; THEN MARKETS DOWN
“…the last times we saw mortgage rates surge like they just have, that marked the peak in consumer confidence and the market followed shortly after.” Story at…
http://www.zerohedge.com/news/2013-06-25/what-happened-last-2-times-mortgage-rates-spiked
GOLDMAN SACHS NOTE (nf
national forex)
“The stronger the correction, the sooner it is likely to
end. From an economic standpoint, investing in equities is likely to prove
worthwhile again only towards the end of the third quarter of 2013,” the bank
said in a research note on Friday.
“But as the exact timing is impossible to predict and
expected returns are disproportionately high one year ahead, investors who wish
to purchase equities should react sooner rather than later. As interest rates
remain low, the hunt for yield continues and the growing demand for equities
means that corrections are likely to be frequent but short-lived.” - By
CNBC.com’s Matt Clinch.
http://nationalforex.com/2013/06/25/june-25-2013-goldman-sachs-stock-market-view/?utm_source=rss&utm_medium=rss&utm_campaign=june-25-2013-goldman-sachs-stock-market-view
MARKET REPORT
Wednesday, the S&P 500 was up 1% to 1603 (rounded).
VIX was down about 7% to 17.21.Wednesday, the S&P 500 was up 1% to 1603 (rounded).
NTSM
The overall NTSM analysis was HOLD at the close.
Sentiment, Price, Volume and VIX are all neutral. (Without getting into
the boring details some buy and sell signals hold over for a week or so. For example, the "new-high/new-low reversal” occurs
on 1-day only, but the buy signal for that specific indicator remains positive
for another week. Sentiment too is
carried forward. This just makes the
NTSM system work better. I see no point
in listing each separate indicator.)
THE DK REPORT
Here is a good chart analysis site.
David does analysis on a number of chart timing methods and posts
results regularly. I usually just scan
the 1st page and count the buy/sell signals. Currently, the 1st page is running
13-Sell signals to 1-Buy signal. I can’t
remember seeing it that negative in the several years I have checked in on the
site. Find the “DK Report” at…http://stockcharts.com/public/3828047/tenpp
MARKET INTERNALS
Internals improved today, as expected on the up day. The 10d-MA of breadth is 50.5%; above 50% represents a positive
market, but I’d also like to see the 20d-MA above 50%. It is currently 45%.
New-highs/new-lows were about even today with new-highs slightly
outpacing new-lows.
I commented yesterday (Tuesday) about the spread reversal in
new-high/new-lows (from -525 to -95) and how that it might represent a bottom
in this correction. The volume Tuesday
was average for the month so there wasn’t a consensus among traders that the
correction is over. Given the issues
with the bond market, it seems too soon for an end. Further, it has only been 25-trading-days
since the top and that is about half the recent average for correction duration
measure from top to bottom.
The reversal looks more like a bounce
because the S&P 500 was close to its lower trend line. These things are never written in stone
though, so watch and wait. My record of
calling bottoms has not been good on short corrections.
MY INVESTED POSITION
I remain about 20% invested in stocks as of 5 March (S&P 500
-1540). 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.
