The fewest Americans in seven years filed applications for unemployment benefits last week as the labor market continued to improve…Jobless claims dropped by 24,000 to 297,000 in the week ended May 10…“The way the job market continues to improve, the number of people collecting benefits keeps going down,” said Brian Jones, senior U.S. economist at Societe General in New York.” Story at…
http://www.bloomberg.com/news/2014-05-15/jobless-claims-in-u-s-decline-to-lowest-level-in-seven-years.html
CONSUMER PRICES (Reuters)
U.S. consumer prices recorded their largest increase in
10 months in April, pointing to some inflation in the economy. The Labor Department said on
Thursday its Consumer Price Index increased 0.3 percent last month as food
prices rose for a fourth consecutive month and the cost of gasoline surged.”
Story at…
http://www.reuters.com/article/2014/05/15/us-usa-economy-inflation-idUSBREA4E0FJ20140515
INDUSTRIAL PRODUCTION FALLS
“U.S.
industrial output fell at its fastest rate in more than 1-1/2 years in April as
factory production slumped, tempering hopes for a big jump in economic growth
after a winter slowdown. Production
at the nation's mines, factories and utilities slipped 0.6 percent last month,
the largest decline since August 2012…”http://www.cnbc.com/id/101676087
SURGING CARGO VOLUME IN NORFOLK (Virginian Pilot)
“Surging cargo volume in Hampton Roads made April the
third-best month in the Port’s history…The port moved 201,390 standard 20-foot containers, or
TEUs, up 12.3 percent from 179,370 in the same month a year ago.” Story
at…
http://hamptonroads.com/2014/05/cargo-volume-leads-big-april-portThis is hardly an indication of recession. The current stock market problems in the NASDAQ and small cap issues are due to high valuations.
DON’T BE TOO FRICKIN’ LONG (CNBC)
“David Tepper, who made the most money of any hedge fund manager in 2013 at $3.5 billion, believes investors better approach the market with more caution now. ‘I'm not saying go short, I'm just saying don't be too fricking long right now,’ the head of Appaloosa Management told a few thousand of his colleagues Wednesday at SkyBridge Capital's SALT 2014 conference in Las Vegas.” Story and video at…
http://www.cnbc.com/id/101674055
A BEAR MARKET IS COMING (MarketWatch)
“Two months ago, I pointed out that the U.S. stock market had topped out and was
going through a churning process. Since that observation, the Dow Jones Industrial Average has risen a
bit higher but the Nasdaq COMP and Russell 2000 indexes have
dropped below their 50-day and 100-day moving averages. It’s only a matter of
time before the Dow follows…No matter how many times you tell investors to be
wary of a dangerous market, most don’t listen. Based on the clues, indicators,
and personal observations, crunch time is getting closer. No one knows when,
but I am certain: a bear market is inevitable — sooner rather than later. This
is not doom and gloom. It is market reality.” - Michael Sincere (www.michaelsincere.com).
Commentary at…
http://www.marketwatch.com/story/stocks-are-telling-you-a-bear-market-is-coming-2014-05-14?link=MW_story_popular
MARKET REPORT
Thursday, the S&P 500 fell about 0.9% to 1871 (rounded).
VIX ROSE about 8% to 13.17. The yield on the 10-year Treasury Note fell further to 2.49% at the close.
The Bond Ghouls are suggesting a stock market rout. A
true rout may be postponed a little since the S&P 500 is now only a few
points above its 50-day moving average so that should trigger some buy-the-dip
action.
As I have been saying for a few days, since the S&P 500 finally moved above the old high of 1891, it needed to advance further. The failure to move higher than 1897 could be signaling a pullback. The smart money is concerned too. The late-day action was fairly flat today, but over the longer term the smart money (trading in the late day) has been selling.
The reversal today in the new-high/new-low data is suggesting down. There were more stocks making new-lows on the NYSE than new highs.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of stocks advancing on the NYSE
dropped to 49% at the close. (A number below
50% for the 10-day average is generally bad news for the market.) In a
reversal, New-lows outpaced new-highs Thursday.
The spread (new-highs minus new-lows) was minus-13. (It was +47
Wednesday.) The 10-day moving average of change in the spread was minus-11. In other words, over the last 10-days, on
average, the spread has DECREASED by 11 each day. The smoothed 10-dMA of up-volume
remained DOWN today. The internals switched
are negative on the market today.
Market Internals are a decent trend-following analysis of
current market action, but should not be used alone for short term trading.
They are usually right, but they are often late. They are most useful when they diverge from
the Index. In 2013, using these
internals alone would have made a 16% return vs. 30% for the S&P 500 (in on
Positive out on Negative – no shorting).
Of course, few trend-following systems will do well in an extreme
low-volatility, straight-up year like 2013.
NTSM
The NTSM analytical model for LONG-TERM MONEY remained
HOLD Thursday. Sentiment rose to a very
high 84%-bulls (5-dMA of {bulls/(bulls+bears)} for funds invested in selected
Rydex/Guggenheim funds. (That was dip buying Wednesday.) On a statistical
basis, Sentiment is negative. Price, Volume
& VIX indicators are neutral.
MY INVESTED POSITION
I increased my stock allocation to 50% invested in stocks
on 26 March because of the NTSM indicators turned positive 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 (New Feature)--
ENSCO (ESV): HOLD
For discussion see:
http://navigatethestockmarket.blogspot.com/2014/05/coppock-curve-says-stock-crash-nowblow.htmlMotley Fool suggests that the owners of floating rigs have overbuilt and rig-rentals and revenues will fall in the future. Commentary at…
http://www.fool.com/investing/general/2014/05/13/these-offshore-drillers-have-made-a-big-mistake-2.aspx
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 at least 25-stocks to be “diversified.”
