Friday, September 13, 2013

Retail Sales Miss…PPI...Many Expect A Correction or Crash

“U.S. retail sales rose less than expected in August even as demand increased for automobiles and other big-ticket items, the latest sign that economic growth slowed in the third quarter…Stripping out automobiles, gasoline and building materials, so-called core sales were up 0.2 percent after rising 0.5 percent in July. Core sales correspond most closely with the consumer spending component of gross domestic product.’  Story from Reuters at… reported the consensus number to be 0.4%.  This relates to an analysis by Mike Lombardi posted on Advisor Perspectives that I linked on 11 September, titled: RETAILERS’ DWINDLING FORTUNES: SLOWDOWN AHEAD? See…

“Producer prices accelerated in August on food and energy. The August producer price index rose 0.3 percent after no change in July. Analysts forecast a 0.2 percent gain. The core rate, which excludes both food and energy, was flat after a 0.1 percent rise in July. Expectations were for a 0.1 percent increase.”  From Econoday at…

BOND CEF’S SAY LIQUIDITY IS IN TROUBLE (McClellan Financial Publications)
“Earlier this year, the closed end bond funds were saying that the market was in trouble due to liquidity problems. That message continues even now without improvement, and provides a message to us that more trouble lies ahead…The SP500 bottomed on Aug. 27, 2013, and has bounced up 3.3% since then. But the bond CEF A-D Line has not shown any inclination to join in that rally. That says liquidity is not yet restored, even though the big-cap stocks can still mount a rally. The runts are going hungry.” – Tom McClellan.  Analysis at…

“Art Cashin says the stock market's rally appears to be running out of steam, or at least taking a well-deserved pause.  Cashin, UBS' director of floor operations at the NYSE, told CNBC's Bob Pisani around midday [Thursday]  that "we're heavily overbought, metrics like the McClellan Oscillator are going into the stratosphere. That doesn't mean we have to turn (lower) but you're entitled to at least a pause here and I think you're going to get it." Video at…

Syria, next week's Fed meeting and the upcoming debt ceiling battle set up a perfect storm for global financial markets…Sept. 17-18 brings the long-awaited Federal Reserve meeting, Bernanke press conference and the anticipated beginning of the end for quantitative easing. ..Within the next two to four weeks, the contours and impact of the perfect storm will become more defined and will likely set the stage for a significant market move in one direction or other.” Opinion at…

Hmmm.  If everyone thinks the markets will go down – they usually go up!  Of course there are some wackos who have a solution for the economy and the markets…

There are some in the Blogosphere who claim we need a war to get the economy going.  Do they think this is 1945?  At the end of WWII the US had no competition.  Europe and Russia were in ruins.  Japan was not an economic power and China was a feudal society. Only the US retained a manufacturing capability.  Does anyone really think that conditions in 1945 are comparable to current economic realities?  Apparently, yes.

Friday, the S&P finished up 0.27% to 1688 (rounded) at the close.
VIX fell 1% to 14.16.

The 10-day moving average of stocks advancing on the NYSE was unchanged at 55% at the close.  (A number above 50% for the 10-day average is generally good news for the market.) 

New-highs outpaced new-lows today, Friday, leaving the spread (new-hi minus new-low) at +33 (it was +68 Thursday), with the 10-day moving average of change in spread falling, but it is still positive...just barely. 

The Internals are positive on the market in the short term.

Friday, the overall long-term NTSM analysis remains HOLD at the close.

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.