“The Leading Indicators report for March increased 0.8%,
which was in-line with the Briefing.com consensus estimate and up from a 0.5%
increase in February…The March report should feed into the view that the
economy has room to do better in the second quarter on account of pent-up demand
and improving labor market conditions.”
Summary and charts at…
http://www.briefing.com/Investor/Calendars/Economic/Releases/leader.htm
RALLY REACHING HISTORIC HEIGHTS (Advisor Perspectives)
“In the past 50-years, five-year rallies of 170% or more
have only taken place in 1987 and 2000.” – Chris KimbleCommentary and chart at…
http://advisorperspectives.com/dshort/guest/Chris-Kimble-140418-Joe-Friday.php
…Needless to say that 1987 and 2000 were at the start of major declines.
SMART MONEY SELLING. WHO IS
BUYING? (Zerohedge)
“Based on Bloomberg's Smart Money Flow indicator, there
is a very significant amount of distribution going on... the question is just
who is soaking up the smart money selling? Company buybacks, Johnny 5, or a
greater-fool retail investor?...[Investors] are effectively "all in"
with respect to the financial markets.”
Commentary at)…http://www.zerohedge.com/news/2014-04-17/if-smart-money-selling-whos-buying
Zerohedge didn’t answer, "Who is buying?"
WHAT THE HEDGE FUNDS ARE DOING (Zerohedge)
“Large speculators reduced
their S&P 500 positioning to net short this week and their NASDAQ longs to
a one-year low as BofAML reports on CFTC data. Macros funds
decreased their long exposure to S&P500 and NASDAQ to now hold short
exposure.” Story at…http://www.zerohedge.com/news/2014-04-21/summary-what-hedge-funds-are-buying-and-selling
EARNINGS DON’T MATTER (CNBC)
"Talk about disregarding bad news: Investors have been
all but ignoring a fairly miserable earnings season as hopes proliferate that in
the end it's only a blip on the profit radar…As things stand for the
April-to-June period, analysts are expecting S&P 500 earnings to jump 8.3
percent, according to S&P Capital IQ. Subsequent quarters call for gains of
9.4 percent and 11.1 percent, for a full-year gain of 7 percent.
The market is hanging its hat on several factors for the
expected rapid profit gains…” Story at…http://www.cnbc.com/id/101593414
MARKETS MORE OVERVALUED THAN 2000 (Hussman Funds)
“…the equity
market is in extremely speculative territory. For the median stock, the
overvaluation is more extreme than in 2000. For the broad
capitalization-weighted market, the Fed has elevated valuations to the level
that promises poor investment returns, and negative real returns – from present
levels – for at least a decade. If the Fed truly wishes to achieve its mandate
of long run price stability and maximum employment, another leg of the stool is
needed in Fed policy, and that is the avoidance of actions that promote
yield-seeking speculation and malinvestment. It is too late to avoid that
outcome in this cycle, as it has already occurred. Now we must manage the
consequences. One hopes that those consequences will be contained to the
financial markets and not the broad economy.”
- John Hussman, PhD. Weekly Market Commentary from Hussman Funds at…
http://www.hussmanfunds.com/wmc/wmc140421.htm
MARKET REPORT
Monday, the S&P 500 was UP about 0.4 % to 1872 (rounded)
on light volume, almost 20% below the monthly average.
VIX was DOWN about 0.8% to 13.25.
The yield on the 10-year Treasury Note was down slightly
to 2.71% at the close.
The Option Boys seem to think the correction is over for
the S&P 500. The Bond Ghouls were
standing pat today.
STOCK MARKET CORRECTION – MY SHORT POSITION
I covered my short position, today. As I said before, I
am not willing to lose much on this short term bet. Overall I was down about
1%. I was tempted to hold longer since today’s volume was so low, but decided on
discretion rather than valor.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of stocks advancing on the NYSE
increased to 55% at the close. (A number
above 50% for the 10-day average is generally good news for the market.) New-highs
outpaced new-lows Monday. The spread
(new-highs minus new-lows was +83. (It
was +108 Thursday. The 10-day moving average of change in the spread was minus-7.
In other words, over the last 10-days,
on average, the spread has DECREASED by 7 each day. The smoothed 10-dMA of
up-volume remains UP as of Monday. The
internals finished neutral on the market.
NTSM
The NTSM analytical model for LONG-TERM MONEY remained
HOLD Monday. Sentiment has fallen to a still
screaming high 80%-bulls (5-dMA of {bulls/(bulls+bears)} for funds invested in
selected Rydex/Guggenheim funds. The VIX, Price & Volume indicators are all
neutral, and have improved as the Index climbed the last 5-days.
MY INVESTED POSITION
I increased my stock allocation to 50% invested in stocks
on 26 March because of the NTSM indicators turned positive Monday (24 Mar) at
the close. I am watching closely to see
if it is time to reduce my long-term stock holdings.
