"The initial claims level dropped to 338,000 for the week
ending December 21 from a slightly upwardly revised 380,000 (from 379,000) for
the week ending December 14. The Briefing.com consensus expected the initial
claims level to fall to 350,000. The continuing claims level increased to 2.923 mln for
the week ending December 14 from a downwardly revised 2.877 mln (from 2.884
mln) for the week ending December 7. The consensus expected the continuing
claims level to fall to 2.850 mln.” Longterm
charts and analysis from Briefing.com at… http://www.briefing.com/Investor/Calendars/Economic/Releases/claims.htm
10-YEAR TREASURY CLOSES AT 3%
The 10-year Treasury Note closed at a yield of 3% Thursday. I don’t know if Art Cashin’s (Director of
NYSE Floor Trading for UBS & frequent CNBC contributor) prediction of
pressure on the stock market if the yield on the 10-year exceeds 3% is correct,
but it looks like we won’t have long to wait before we find out.
ADS INDEX (Philly Fed)
The ADS Business Conditions index is looking healthier and is once again
above zero. It has made higher lows and
that has broken the troubling trend of lower lows. 
“The Aruoba-Diebold-Scotti business conditions index is
designed to track real business conditions at high frequency. Its underlying
(seasonally adjusted) economic indicators (weekly initial jobless claims;
monthly payroll employment, industrial production, personal income less
transfer payments, manufacturing and trade sales; and quarterly real GDP) blend
high- and low-frequency information and stock and flow data. Both the ADS index
and this web page are updated as data on the index's underlying components are
released.” – Philly Federal Reserve at…
http://www.philadelphiafed.org/research-and-data/real-time-center/business-conditions-index/
HUSSMAN (Hussman Funds)
“…the most dangerous points to embrace risk are typically
when a syndrome of overvalued, overbought, overbullish conditions emerges [as
they have now].…We know the risks inherent in present market conditions, and we
know how those risks are typically resolved (as they were after 1929, 1972,
1987, 2000 and 2007)…I won’t tell you that this speculative run will end
immediately. I can easily say, however, that…I haven’t the faintest inclination
to believe that this time is different…The diva is already singing. The only
question is precisely how long they hold the note.” John Hussman, PhD, Hussman Funds Weekly
Market Commentary at … http://www.hussmanfunds.com/wmc/wmc131223.htm
MARKET REPORT
Thursday, the S&P 500 was up 0.5% to1842 (rounded) VIX fell 1.2% to 12.33.
NYSE Volume was very light (about half that of a regular
day).
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of stocks advancing rose to 60%
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 +295 (it was +258 Tuesday). The 10-day moving average of change in the
spread was +41. In other words, over the last 10-days, on average, the spread
has increased by 41 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.
NTSM
SENTIMENT increased yet again
(broken record time) and was 84%-bulls at the close Tuesday (the data is
released late so I am always a day late on sentiment) and the 5-dMA of
sentiment is 81%-bulls in the Rydex/Guggenheim long/short funds I track. These are incredibly high values and the
5-day sentiment value was the highest I have ever seen (data back to 2003).
High sentiment is a negative indicator for the stock market – but it hasn’t
stopped the market all year.
The S&P 500 is 10%
above the 200-dMA and a value of 10% has led to small pullbacks in 2013 (and
corrections in 2011 and 2012). Other
indicators are all neutral of positive.
The most recent BUY signal for the NTSM system was 25
October. The “5-10-20 Timer” switched to
BUY from HOLD on 18 December.
MY INVESTED POSITION
I am about 30% invested in stocks as of 20 December
(S&P 500-1540) because I upped my stock holdings by 10% on the 20th. I will income-average (a little each month)
into the stocks to get my %-invested up to around 50% (max for me now) unless
there is a correction that would allow me to move in sooner and at a higher
percentage. I expect the markets to
pullback in the first quarter of 2014, but it remains to be seen whether it
will be another small buy-the-dip event or something more.
