“The initial claims level increased to 379,000 for the week ending December 14 from an upwardly revised 369,000 (from 368,000) for the week ending December 7. The Briefing.com consensus expected the initial claims level to fall to 333,000… the DOL stated that the Thanksgiving and Christmas holidays are still causing problems in the claims data. It is unlikely that a clear and unbiased reading of the claims data will come until after the new year…Seasonal adjustment problems make the initial claims level an unreliable indicator of current labor market conditions.” Information and good historical charts at…
http://www.briefing.com/Investor/Calendars/Economic/Releases/claims.htm
PHILADELPHIA FED (Briefing.com)
“Manufacturing activity in the Philadelphia region unexpectedly accelerated in December. The Philadelphia Fed's Business Outlook Survey increased to 7.0 in December from 6.5 in November. The Briefing.com consensus expected the index to fall to 5.0.” More details at…
http://www.briefing.com/Investor/Calendars/Economic/Releases/phil.htm“Manufacturing activity in the Philadelphia region unexpectedly accelerated in December. The Philadelphia Fed's Business Outlook Survey increased to 7.0 in December from 6.5 in November. The Briefing.com consensus expected the index to fall to 5.0.” More details at…
WHY I’M NOT GOING TO FIGHT THE FED ANYMORE
There is no point in staying out of the market much longer. It isn’t working. All indications of corrections simply haven’t
worked. The NTSM system gave a BUY
signal on 17 thru 24 October and I refused to get back in based on the extreme
sentiment and other indicators that suggested a correction. None of those indicators (all based on years
of past history) have worked.
On the whole, most people expected the TAPER to be bad news. The market reaction (Thursday) to the taper
was surprising, but on reflection, there was some logic to it. There are now no doubts regarding the Taper.
Yesterday, I wasn’t too clear in my reasoning for not going into stocks
immediately, given that I have indications from the NTSM system and the 5-10-20
Timer that that is the course of action recommended by technical models and I
expected Thursday to be a down day. My
reason for waiting is to see what happens with Market Internals. I have some concern that, after due
consideration, the market may decide the Taper isn’t quite the good news that
it seemed to be yesterday. I want to
avoid whipsaw if possible.
Tomorrow could be a wild day due to the expiration of
options – if it is too wacky, I may wait till next week.
No matter when I begin to get back in, the key is to move slowly. For me 50% is fully invested, so I have 30%
cash that I plan put to work. I’ll
divide that into three equal parts and move back in a month at a time. That leaves cash on the sidelines if there is
a correction as I am moving in. If I had
zero money in and I wanted to be 100% invested, I’d divide it into 12-equal
parts and invest it each part monthly.
There is still a pretty good expectation of a correction (someday) and
at that point one would be able to put all the remaining funds in when stocks
are on sale.
All together: The FED is good…the FED is great and we thank it for our
food…
Let’s skip the sour news…here’s a feel good analyst…
EMBRACE THE TAPER AND BUY STOCKS AT ALL TIME HIGHS (Yahoo
Finance)
“The taper is a good thing for the market. It’s based on
good economic data and the Fed acknowledged that,” says Doug Cote, U.S. chief
market strategist at ING Investment Management in the attached
video. “There’s a lot of concern that maybe the rally has gone too far. It
hasn’t.”…In fact, Cote says it’s time to buy stocks here and points to a
forward P/E ratio that’s still below 15-times next year’s estimated earnings as
proof that record highs do not always mean overpriced or expensive. “Hesitant investors may have missed a good
rally (yesterday) but it’s not too late to get in for 2014…” Video and transcript at…http://finance.yahoo.com/blogs/breakout/embrace-the-taper-and-buy-stocks-at-all-time-highs-173606196.html
MARKET REPORT
Thursday, the S&P 500 was down 1.7% to 1811 (rounded)
on the FED decision to taper. The market
reaction was a surprise to most analysts.VIX was down 15% to 13.8.
The bearish rising-wedge pattern that I have written
about in the past now looks like it would resolve at around 2000 on the S&P
500, so there is room to run. That’s not
a prediction, just a maximum.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of stocks advancing rose to 52%
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 +69 (it was +104 Wednesday). The 10-day moving average of change in the spread was +14.
In other words, over the last 10-days, on average, the spread has increased by
14 each day.
Market internals improved again and remain positive on
the market.
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.
BUT INCOME AVERAGING IS RECOMMENDED TO SLOWLY BUY IN.
MY INVESTED POSITION
I about 20% invested in stocks as of 5 March (S&P 500
-1540). I will income- average (a little
each month) into the stocks to get my %-invested up to around 50%.
I will increase my invested position to 30%-stocks using
the S&P 500 index Friday.
The markets remain risky, but waiting for a correction
has been futile. Actually, this move guarantees a
correction! The S&P 500 is close to an all-time high now.) Remaining at a low 30%-invested
still leaves me protected, but recognizes that the markets may continue up. If conditions are positive, I'll add more at the end of January.
The best piece of trading advice: “Trade what you see
not what you think.” – TOF
I think the markets will correct in January, but what I
see is a continuation of the current uptrend.
