“More workers report that their employers are hiring; fewer see people being let go:
The net job creation score is
based on 37% of workers telling Gallup that their employer is hiring new people
and expanding the size of its workforce, and 15% saying their company is
letting people go and reducing the size of its workforce. The percentage
"hiring" is the highest since August 2008 and the percentage "letting
people go" is the lowest since March 2008.” Full release at…
http://www.gallup.com/poll/162893/job-creation-best-five-years.aspx
That’s good to hear, but we’ve got a long way to go. The Labor force participation rate is at
all-time lows. The participation rate is
simply the work force (including those looking for work) divided by the
population. (Actually, it’s
non-institutionalized population, but that can’t really be a significant part
of the population.) Details and chart at
BLS…http://data.bls.gov/timeseries/LNS11300000
TRUCKING KEEPS ON…WELL, TRUCKING (ATA)
“The American Trucking Associations’ advanced seasonally
adjusted (SA) For-Hire Truck Tonnage Index jumped 2.3% in May after falling
0.2% in April...Year-to-date, compared with the same period in 2012, the
tonnage index is up 4.5%...“While we heard good reports regarding freight
levels during May, I have to admit I am a little surprised at the large gain in
tonnage,” Costello said. He added that tonnage continues to outpace the number
of loads hauled as heavy freight (e.g., housing construction materials and sand
and water for hydraulic fracturing) is outperforming box trailer (i.e., dry
van) freight.” ATA Press release at…http://www.truckline.com/article.aspx?uid=1acfa814-f1b7-430f-aa76-a746a3713865
And some are still calling a recession??
MARKET INTERNALS FROM HUSSMAN - DISMAL RETURN/RISK
“Market internals remain broken here [as of Friday]. That may change, and it might even change soon. Until it does, we would be inclined to tread carefully, because this may be the highest level investors will see on the S&P 500 for quite some time. Choosing between potential catalysts - credit strains in China, the risk of disappointing earnings, or economic weakness, the incoming data is consistent with one conclusion: all of the above...our concerns about the equity market are not driven by...[recession]...Instead, we’re concerned about a host of reliable, testable, historically validated measures that – in combination – are associated with a dismal estimate of prospective return/risk here.” - John Hussman, Phd from Hussman Funds Weekly Market Commentary at
http://www.hussmanfunds.com/wmc/wmc130701.htm
MARKET INTERNALS
Internals were higher today. The 10-dMA of advancers is now 52% while the
20-dMA is just below 50%. 153 stocks
made new-highs and only 6 made new lows. The concern that last Monday (24 June 2013) may have been the bottom due to the new-high/new-low reversal on Tuesday, remains. I have suggested that the Sentiment was too high, but there are no guarantees. With the rest of the world in the toilet it is always possible that the market could’ve reversed with extreme high sentiment and is now marching to new all-time highs.
But there is more than Sentiment; another negative on the
markets is the panic indicator that flashed sell on 20 June. In the end, internals show where the market is
going so we’ll look for reversals elsewhere, because so far, the internals keep
indicating the market is likely to go higher.
At this point I am watching the charts to see if the
upper trend line will be broken. Today
the S&P 500 finished around the upper trend line. (There’s almost always
some judgment involved regarding the location of the upper trend line.) There are different rules for deciding on a
trend-line break and it is up to each trader to decide which to use. The smart thing would be to test a number of
rules and pick the best one, but I’ve never had the time or inclination. Here are two:
1) The index must close above the trend line on
2-successive days.2) The index must close 3% above the trend line.
If the Index can meet one of above tests for a trendline break, then the market is likely to continue up. Otherwise, a reversal down is likely.
A reversal to the downside, at this point, may also be signaled by a big up-day, say
around 1.5%.
MARKET REPORT
Monday, the S&P 500 was up 0.5% to 1615 (rounded).
VIX was down 3% to 16.34.Monday, the S&P 500 was up 0.5% to 1615 (rounded).
NTSM
Monday, the overall NTSM analysis was HOLD at the close, but just barely.
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.
