YELLEN: “WE HAVE FARTHER TO GO TO REGAIN LOST GROUND
(CNBC)
“With speculation increasing that the Fed could taper its
asset purchases as soon as next month, Yellen also suggested the central bank
still needed to support the economy…’A strong recovery will ultimately enable the
Fed to reduce its monetary accommodation and reliance on unconventional policy
tools such as asset purchases. I believe that supporting the recovery today is
the surest path to returning to a more normal approach to monetary policy,’ she
said.” Full story at…http://www.cnbc.com/id/101195844
CISCO OUTLOOK WELL BELOW EXPECTATIONS; CISCO DOWN 8%
[yesterday and 11% today] (CNBC)
“Cisco Systems said sales in the current
quarter will drop by as much as 10 percent, shocking analysts who had expected
revenue to grow in the period. The company also warned it was expecting
business to be "challenging" for the next few months… “CEOs are very
concerned and probably more cautious about next year than I've seen them in
quite a while ...” Full story at…http://www.cnbc.com/id/101195331
Jim Cramer said the earnings call was so bad that it was
an “abomination”. Cisco is somewhat of a
bell-weather for technology and business investment so this will raise
concerns.
WALMART POOR OUTLOOK (Financial Express)
"Wal-Mart Stores says its third-quarter profit
rose 2.8%, but the world’s largest retailer reported a sales shortfall as its
low-income shoppers feel squeezed around the globe. The discounter also cut its
outlook for the full year and issued fourth-quarter profit guidance that was
below analysts’ projections." Story at...http://www.financialexpress.com/news/quick-view-walmart-profit-up-2.8-but-sees-poor-outlook/1194996
INITIAL JOBLESS CLAIMS SEE SETBACK; TRADE IMBALANCE
WIDENS UNEXPECTEDLY (Reuters)
“Initial claims for state unemployment benefits fell
2,000 to a seasonally adjusted 339,000, the Labor Department said on Thursday.
Claims for the prior week were revised to show 5,000 more applications received
than previously reported. Economists polled by Reuters had expected first-time
applications to fall to 330,000 last week…The increase in the so-called real
trade deficit in September suggested the government will probably lower its
initial third-quarter GDP estimate. Trade contributed 0.31 percentage point to
the economy's 2.8 percent annualized growth pace in the July-September quarter.”
Full story at…http://www.cnbc.com/id/101197898
EUROPE RECOVERY WANES AS GERMANY SLOWS, FRANCE CONTRACTS
(Bloomberg)
“The euro area’s recovery came close to a halt in the
third quarter as German growth slowed, France’s economy unexpectedly shrank and Italy
extended its record-long recession.”
Story at…http://www.bloomberg.com/news/2013-11-14/euro-area-recovery-fizzles-as-germany-slows-france-contracts.html
MARKET REPORT
Thursday, the S&P was up 0.5% to 1791 (rounded).
VIX fell about
1% to 12.37.Thursday, the S&P was up 0.5% to 1791 (rounded).
The S&P 500 is 9.4% above the 200-day moving average
and that has been a level that has been trouble for the markets recently. With that in mind, it is a little hard to put
too much faith in the improving market internals. Internals don't lie though; we'll just have to see which stat breaks first.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of stocks advancing rose to 50.1%
at the close Thursday. (A number above 50%
for the 10-day average is generally good news for the market.)
New-highs outpaced new-lows Thursday, leaving the spread
(new-hi minus new-low) at + 224 (it was +120 Wednesday). The 10-day moving average of change in the
spread was plus 12. In other words over
the last 10-days, on average, the spread has increased by 12 each day.
Market Internals were positive at the close today, but
most of the 10-day values are just barely up, so we'll see.
Market Internals are a decent trend-following analysis of
current market action, but in 2013 (so far), if I had been buying the positive
ratings and selling negative ratings I would have under-performed a
buy-and-hold strategy.
NTSM ANALYSIS
Sentiment is EXTREME
negative. All other NTSM indicators are neutral. Overall,
NTSM is neutral. That is a broken record. |
(I am mostly out of the market already.)
MY INVESTED POSITION (NO CHANGE)
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.
I still lean toward getting back in, after a pullback, to
speculate on a final ride to the top.
NTSM did give several buy signals over the weeks of 14 and 21 Oct, but
the market just looks too frothy to rush back in…we’ll see if the market will
pullback so I can join the insanity. If
not, cash is fine.
