“Société Générale strategist Andrew Lapthorne…[observed]...“it has been 408 days since the last 10% correction in the MSCI World index, the 8th longest period on record.” Laphorne does not suggest this…[is]…“necessarily imply impending doom for equities.” In fact, he notes, “we find no relationship between time since correction and future returns.” Regardless, we have now gone about as long as it typical between 10 percent corrections. As we noted this morning, sentiment is as bullish as it ever gets.” Story at…
http://www.bloomberg.com/news/2014-01-21/more-than-400-days-without-a-correction-ritholtz-chart.html
IBM: BEATS ON EARNINGS; Disappoints on Sales (CNBC)
“IBM reported quarterly earnings that beat analysts' expectations on Tuesday, but revenue came in below street expectations. After the earnings announcement, the company's shares fell 2.4 percent in trading after the bell…The company posted fourth-quarter earnings excluding items of $6.13 per share, up from $5.39 a share in the year-earlier period…Revenue decreased to $27.70 billion from $29.30 billion a year ago.” Full story at…
http://www.cnbc.com/id/101350931
Not a good sign when Big Blue’s revenues are falling. ZeroHedge reported that the only reason earnings were above expectations was an “accounting gimmick” on taxes. Big Blue fell another 3% Wednesday.
EX-VA GOV MCDONNELL INDICTED FOR FRAUD (Bloomberg)
“Former Virginia Governor Robert McDonnell and his wife, Maureen, were indicted on 14 counts including fraud, conspiracy and obstruction stemming from their relationship with a businessman who provided the couple with trips, loans, flights and a Rolex watch.” Story at…
http://www.bloomberg.com/news/2014-01-21/ex-virginia-governor-mcdonnell-indicted-with-wife-in-fraud-scam.html
MARKET REPORT
Wednesday, the S&P 500 was up 1-pt to 1845 (rounded).
VIX was down about 0.2% to 12.84.
The 10-year Treasury Note closed higher at 2.87% yield. Rates at 3% or above are considered by some traders to be “trouble-for-stocks”.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of stocks advancing fell to 56%
at the close Wednesday. (A number above 50%
for the 10-day average is generally good news for the market.) New-highs outpaced new-lows Wednesday, leaving
the spread (new-hi minus new-low) at +150 (it was +195 Tuesday). The 10-day
moving average of change in the spread dropped to +3. In other words, over
the last 10-days, on average, the spread has increased by 3 each day.
NTSM
The four areas of analysis, Sentiment, Price, Volume and
VIX haven’t changed and are currently rated as follows: Sentiment remains screaming high, unchanged at 79%-bulls Tuesday (5-dMA of selected Rydex/Guggenheim funds). The high value is a negative; Price is positive since up-days have been larger than down-days over the past month; VIX and Volume remain neutral.
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
of December. Unless I get a SELL signal
in the NTSM system, I will continue to 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. Since that is my expectation, I have not upped my invested
percentage in one move as I normally would.
