“Is this the plunge that accelerates or is another bounce coming? Given the "unexpected" plunge in new housing and the rise in mortgage rates, I suggest an acceleration to the downside.” - Shedlock
Full story at http://globaleconomicanalysis.blogspot.com/2013/08/durable-goods-orders-plunge-73.html
I think it is too early to panic. From dShort.com: “If we exclude
transportation, "core" durable goods were a less negative -0.6
percent and up 5.9 percent YoY.” See the
analysis by Advisor Perspectives at…
http://advisorperspectives.com/dshort/updates/Durable-Goods-Orders.php
PENTAGON WEIGHS FIRING THOUSANDS UNDER 2014 SPENDING CUTS(Bloomberg)
“The Defense Department may have to fire at least 6,272
civilian employees if automatic cuts known as sequestration slice $52 billion
from its fiscal 2014 budget, according to a Pentagon planning document…For the
most part, major weapons programs aren’t being targeted for extensive
reductions, according to the plan, which was a presentation by Pentagon budget
and cost-assessment officials for generals and admirals who oversee force
structure and resources for their respective services… …The planning document is stamped “Draft/Pre-Decisional”and said no final decisions have been made.”
http://www.bloomberg.com/news/2013-08-22/pentagon-weighs-firing-thousands-under-2014-spending-cuts.html
ATA TRUCK TONNAGE INDEX FELL 0.4% IN JULY (ATA)
“The American Trucking Associations’ advanced seasonally
adjusted (SA) For-Hire Truck Tonnage Index slipped 0.4% in July after edging
0.1% higher in June…The latest drop was the first since April... ‘After gaining
a total of 2.2% in May and June, it isn’t surprising that tonnage slipped a
little in July,’ ATA Chief Economist Bob Costello said. ‘The decrease
corresponds with the small decline in manufacturing output during July reported
by the Federal Reserve last week.’” Full
press release at…http://www.truckline.com/article.aspx?uid=6de8d491-ed6d-4d72-a4b0-d1115193d2be
RECESSION?
The trucking sector correlates pretty well to the
economy, but this is only one data point and no need to panic. We’ll need more than one month to get
concerned.
One note of caution: Cyclical stocks are now underperforming
the S&P 500 by 0.5% over the last 10-days.
This may be the first sign that investors are beginning to have some doubts
about the economy; it is a definite warning of correction if the trend
continues. As it is now, it doesn’t mean
much; it just warrants watching.
MARKET REPORT
Monday, the S&P was down 0.4% to 1657 (rounded) at the close.
VIX was up 7% to 14.99. Monday, the S&P was down 0.4% to 1657 (rounded) at the close.
NEWS TRUMPS TECHNICALS. The market had been doing OK
until John Kerry called Syria's use of chemical weapons "undeniable"
around 3:30PM and the markets tanked. If
you want more details here’s a link to a TIME Swampland story, video and text
of Kerry’s remarks...
http://swampland.time.com/2013/08/26/kerry-obama-seeks-accountability-for-syrian-chemical-weapons-use/
MARKET INTERNALS (NYSE DATA)
Market Internals are now mixed with breadth
(measured as percent-bulls) falling again and new-high/new-low data still
looking generally positive, although without any big clear-cut reversal like
the last time the S&P 500 visited the 50-day moving average.
The 10-day moving average of stocks
advancing on the NYSE fell to 44% at the close, reversing the up-trend in the
10-dMA.
New-highs outpaced new-lows today leaving
the spread at +78 (it was +3 yesterday), with the 10-day moving average of change
in spread now trending slightly up. This
indicator is now moving up, but not strongly.
Today’s reading of Internals is neutral on
the market, with conflicting information.
(News trumped the technicals.)
NTSM
Monday, the overall NTSM analysis was HOLD at
the close.
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.
