JOBLESS CLAIMS SURGE (Bloomberg)
“Applications for U.S. unemployment benefits jumped last week
from an almost three-month low, reflecting volatility that typically occurs
around the year-end holidays. Jobless
claims surged by 68,000 to a two-month high of 368,000 in the period ended Dec.
7, exceeding the highest forecast in a Bloomberg survey of economists, Labor
Department data showed today in Washington... “I wouldn’t put too much stock in
the ups and downs of initial jobless claims over the next several weeks because
seasonal volatility is pretty high this time of year,” said Ryan Sweet, senior
economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, and the top-ranked forecaster of
jobless claims in the past two years, according to data compiled by Bloomberg.
“Layoffs are low. Other jobs data suggest layoffs are not the problem, it’s the
lack of hiring.”
RETAIL SALES UP (USA Today)
"Retail sales jumped 0.7% in November, topping economists'
forecasts, as strong gains in auto sales and categories like furniture offset
the effect of lower gasoline prices… "Retail sales look great,'' said
Chris Rupkey, chief U.S. economist for Bank of Tokyo Mitsubishi UFJ. ``The
latest Bloomberg poll says Americans think Washington uncertainty is hurting
economic growth, but you'd never know it because they are still going out and
buying goods at the shops and malls.''
Full story at…
I agree with several commentators on CNBC; declines in the indices today
were caused by Taper-fear. Gold was down 2% today and that is related to taper.
(I could also argue that markets declines are related to technical issues
that I listed yesterday.)
Regarding yesterday’s correction commentary…I forgot 3-correction
indicators in play: (1) Market Internals look bad; (2) Unchanged volume went
through the roof 3–weeks ago.(3) The
markets are a year away from last year’s decline and some tax related profit
taking is expected. That brings the
total to ten.
MARKET REPORT
Thursday, the S&P was down 0.4% to 1776 (rounded).
Thursday, the S&P was down 0.4% to 1776 (rounded).
VIX rose 0.8% to
15.54. (That’s not much. The options boys are not convinced this is anything
more than a minor dip.)
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of stocks advancing fell to 42%
at the close Wednesday. (A number below 50%
for the 10-day average is generally bad news for the market.)
New-lows outpaced new-highs Thursday, leaving the spread
(new-hi minus new-low) at minus 231 (it was minus 117 Wednesday). The 10-day moving average of change in the
spread fell to minus 39. In other words,
over the last 10-days, on average, the spread has decreased by 39 each day.
Market internals remain negative 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.
I need a pullback to get back in. Otherwise I will continue to sit out the
party.
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 now under-performing my own system by about 6%!) 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 has looked too frothy to rush back in…we’ll see if the market will
pullback so I can join the insanity. If
not, cash is (grit my teeth and put on a false smile) fine.
