As reported by the Wall Street Journal, trade data indicates that the economy contracted in the First quarter of this year. JP Morgan Chase economists estimated that the economy contracted at an 0.8% pace. Macroeconomic Advisors estimated the decline at 0.6%. Not to worry; everyone seems to think the economy is rebounding in the 2nd Quarter.
http://online.wsj.com/news/articles/SB10001424052702304101504579545522484566420
MARKET REPORT
Wednesday, the S&P 500 was UP about 0.6% to 1878 (rounded).
VIX Fell about 3% to 13.40.
The yield on the 10-year Treasury Note held steady at 2.59% at the close.
The Bond Ghouls remain worried about the stock market. If the smart money is selling stocks, some are buying bonds.
The S&P 50 bounced up from the 50-dMA today. Tomorrow will give us a clue whether the bounce will continue. Last hour trading was up strongly today and that is a clue the bounce will continue. The chart is no help concerning a possible bounce since the current value of the Index is squarely in the middle of the channel marked by high and low values of the S&P 500.
I’m going to repeat this point until the S&P 500 breaks thru the old highs: The S&P 500 has closed within about 1% of the all-time high of 1891 21-times since 1 Jan 2014. It needs to punch higher or the correction will be back.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of stocks advancing on the NYSE
increased to 52% at the close. (A number
above 50% for the 10-day average is generally good news for the market.) New-highs
outpaced new-lows Wednesday. The spread
(new-highs minus new-lows) was +58. (It
was +49 Tuesday.) 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 continued to decline today. The
internals remained neutral on the market, but only because Breadth is positive
at 52% advancing; otherwise Internals would be negative on the market.
NTSM
The NTSM analytical model for LONG-TERM MONEY remained
HOLD Wednesday. Sentiment was 84%-bulls (5-dMA
of {bulls/(bulls+bears)} for funds invested in selected Rydex/Guggenheim funds.
On a statistical basis, Sentiment is negative.
Price, VIX & Volume indicators are neutral.
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. 50% in stocks is fully
invested for me, given my age (semi-retired) and the risk inherent in today’s
stock market. I am watching closely to see if it is time to reduce my long-term
stock holdings.
--INDIVIDUAL
VALUE STOCKS--
ENSCO (ESV): BUY
For discussion see: http://navigatethestockmarket.blogspot.com/2014/05/coppock-curve-says-stock-crash-nowblow.html
Research has shown that to have a diversified portfolio no one stock should be more than 4% of the portfolio total, or stated another way, if your total portfolio consisted of individual stocks, you would need 25-stocks to be “diversified.”
