“Private sector employers added 166,000 jobs in September, slightly below economists' forecasts and little changed from prior months. Employers added 159,000 jobs in August and 161,000 jobs in July, according to revised figures…’The job market appears to have softened in recent months," said Mark Zandi, chief economist of Moody's Analytics, which helps compile the ADP report. "Fiscal austerity has begun to take a toll on job creation [and the] run-up in interest rates may also be doing some damage to jobs in the financial services industry…’" Full story at…
http://money.cnn.com/2013/10/02/news/economy/adp-jobs-report/
The ADP report revised July numbers down by 37,000 jobs
(a19% revision) and August numbers down by 17,000 jobs (a 10% revision). With those large revisions, the hiring trend
in the ADP data is only slightly better than flat since March. Looking at a longer timeframe published by
ZeroHedge, the trend looks worse.
Historical Trend - Change in Total Nonfarm Private Employment
http://www.zerohedge.com/news/2013-10-02/only-payroll-indicator-shutdown-week-disappoints-adp-misses-follows-large-downward-r
US DEBT DEADLINE : 17 OCTOBER (Bloomberg)
“…to avoid a breach of the nation’s debt limit, Treasury
Secretary Jacob J. Lew said as he pressed Congress to increase borrowing
authority “immediately.” Lew, in a
letter addressed to House Speaker John Boehner dated yesterday, repeated that the
measures will be exhausted no later than Oct. 17.” Story at…http://www.bloomberg.com/news/2013-10-02/treasury-uses-final-measures-to-avoid-breaching-debt-limit-1-.html
MARKET REPORT
Wednesday, the S&P finished down 0.1% (1pt) to 1,694 (rounded) at the close.
VIX was UP 7% to 16.60.Wednesday, the S&P finished down 0.1% (1pt) to 1,694 (rounded) at the close.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of stocks advancing on the NYSE
fell to 47% Wednesday from 51% Tuesday.
(A number below 50% for the 10-day average is generally bad news for the
market.)
New-highs outpaced new-lows Tuesday, leaving the spread
(new-hi minus new-low) at +80 (it was +177 Tuesday). The 10-day moving average of change in the
spread is minus 21. That just means that over the last 10-days, the spread has
been getting worse. This stat has been
bouncing back and forth recently.
Overall though…
…Market Internals are now negative on the market for this
short term indicator.
FAKE OUT DAY
Today looked like a good day right? The market was down nearly 1% in the morning,
when it touched the 50-day moving average at 1680, but it came back all day and
finished at the highs, down just a whisker.
Usually, that would be pretty good news.
Lurking beneath the surface are 2-troubling stats. First, breadth was down significantly. Of the (roughly) 3,000 stocks traded on the NYSE,
only 1300 or so (44%) were up today. Had
only 44% of stocks in the S&P 500 advanced, it is likely the S&P 500
would have been down a lot. (I am ignoring the fact that the index is weighted
by size, but let’s not confuse the issue with too many facts.)
Second, VIX was UP nearly 7% today. Again, one would expect the S&P 500 to be
down more than a point for a 7% rise in VIX.
That’s an indication that the options boys don’t necessarily agree that
the indices are fairly priced.
Usually, this kind of divergence goes to the majority. Since the VIX and most stocks fell Wednesday,
I’d expect the S&P 500 to catch-up Thursday and fall too.
NTSM
Wednesday, the overall long-term NTSM analysis remains
HOLD at the close.
The 5-day, percent-bulls (bulls/(bulls+bears) in the
Guggenheim/Rydex funds I track remains 69%-bulls as of Friday’s close. That is
an extreme bullish value (no, make that super extreme bullish value) that is
usually a negative for the markets. “USUALLY”
is the key word here. I suspect the
crowd is betting that the political impasse will be resolved easily.
If it is, the bet might be right. On the other hand, it is not clear to me that
the market is falling solely due to political wrangling.
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.
