“Chicago PMI ticked 51.6. Consensus was for 55.0. It's the largest monthly drop in over four years…Activity dropped back in June following the large rise in May… while these latest data point to some weakening between the first and second quarter, it is too early to say if this will continue.” - Philip Uglow, chief economist at MNI. Story at…
http://www.businessinsider.com/chicago-pmi-june-28-2013-2013-6
Elsewhere in this article it was suggested that part of the PMI drop may be due to weather conditions.
US CONSUMER SENTIMENT COMES IN HIGHER THAN EXPECTED (Reuters)
“U.S. consumer sentiment improved in late June, ending the month close to a near six-year high set in May, as optimism among higher-income families rose to its strongest level in six years, a survey released on Friday showed.” Full story at…
http://www.cnbc.com/id/100852184
CORRECTION OVER? SENTIMENT SAYS NO.
Opinions are split regarding whether the correction is
over or not. If it is, this will be the highest sentiment exiting any correction
in the past 4-years. (I didn't look further back.) The average for ALL of those corrections has been 42% at the low.
Looking specifically at previous small corrections of 5-10%
over the past 4-years, the average Sentiment at the bottom was
46% for 4-small corrections. The
correction low in this current cycle is S&P 500-1573 on 24 June. Sentiment on 24 June was at an extreme high of
66%-bulls. (In other words investors
were betting long 2 to 1 in the Gugenheim/Rydex funds I track for the NTSM sentiment
indicator and that indicator is a 5-day moving average.)
As I noted yesterday,
Sentiment looks too high for this correction to have ended this past Monday (24
June). Sentiment of 66%-bulls is
consistent with a Top, not a Bottom.
People making predictions are usually over-confident in their predictions. I'm not. There are no guarantees; only time will tell if I am right.
MARKET REPORT
Friday, the S&P 500 was down 0.4% to 1606 (rounded).
VIX finished unchanged at 16.86.Friday, the S&P 500 was down 0.4% to 1606 (rounded).
NTSM
Friday, the overall NTSM analysis was HOLD at the close. Sentiment, Price, Volume and VIX are all neutral, but leaning to the down side.
MARKET INTERNALS
Internals were flat today and didn’t give up many clues. The concern that last Monday (24 June 2013)
may have been the bottom due to the new-high/new-low reversal on Tuesday, remains;
but as noted yesterday and above in "CORRECTION OVER? SENTIMENT SAYS NO...sentiment really does say "NO!"
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.
