New home sales increased 6.4% in April from an upwardly revised 407,000 (from 384,000) in March to 433,000. The Briefing.com consensus expected new home sales to increase to 415,000…The big story in the new homes sales report is that median home prices fell 1.3% y/y.” Story at…
https://www.briefing.com/Investor/Calendars/Economic/Releases/newhom.htm
MARKET REPORT
Friday, the S&P 500 rose about 0.4% to 1901 (rounded).
VIX fell about 6% to 11.36.
VIX is now at a point that has recently aligned with the start of corrections.
The yield on the 10-year Treasury Note fell slightly to 2.54%
at the close.
The Bond Ghouls are still worried.The S&P 500 Index finally closed above the prior high of 1897. It couldn’t get above the prior intra-day high of 1902. It really needs to push about 3% higher or close above the prior high more than 2-times before we can at least feel like the upward trend has a chance of being back. The markets have been moving nearly sideways since the new-year.
Volume was 25% lower than the monthly average so today’s move was not a strong move. The low volume is cause for worry. The late-day trading pattern has indicated selling by the pros over the last 2-weeks. I heard one of the regular traders on CNBC say that he was going to cash now and would remain out of the stock market for the summer. “The risk in the markets is higher than the returns,” he said. This is likely to be the source of the next correction as the buyers dry up and it is a process that seems to be going on now.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of stocks advancing on the NYSE climbed 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 Friday. The spread (new-highs minus new-lows) was +99. (It was +93 Thursday.) The 10-day moving average of change in the spread was +9. In other words, over the last 10-days, on average, the spread has increased by 9 each day. The smoothed 10-dMA of up-volume was UP today, but just barely. The internals turned positive on the market today, but sometimes this happens at a top too.
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 Friday. Sentiment fell slightly to 83%-bulls (5-dMA of {bulls/(bulls+bears)} for funds invested in selected Rydex/Guggenheim funds. On a statistical basis, Sentiment is negative, but now just barely. Price, Volume & VIX indicators remain 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 the NTSM blog at:http://navigatethestockmarket.blogspot.com/2014/05/coppock-curve-says-stock-crash-nowblow.html
Motley 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.”
ave a great Memorial Day weekend!
