“Producer prices increased 0.6% in April, up from a 0.5%
increase in March. The Briefing.com consensus expected producer prices to
increase 0.2%... Even though pipeline pressures remain tame, headline producer
prices have run hotter-than-expected over the last couple of months.” Commentary and charts at…
http://www.briefing.com/Investor/Calendars/Economic/Releases/ppi.htm
BOND YIELDS
FALLING (CNBC)
”Global bond yields are in a deep slide, taking the 10-year U.S.
Treasury to a level not seen since October—well before the Fed began winding
down its easy money program… ‘The catalyst is the more dovish stance on
European monetary policy, the weaker data in Europe a combined with less
ambitious hiking expectations in the U.K. They didn't pull forward hiking
expectations,’ Lyngen [senior
Treasury strategist at CRT Capital] said…Concerns about Ukraine are also
putting a bid in Treasurys, in a flight-to-safety trade.
DAY TRADER:
BEWARE THE DOWNSIDE RISK (CNBC)
“With an S&P 500
coming off all-time highs while the Russell 2000
and the Nasdaq have lagged, the greater risk in
the stock market is to the downside, professional day trader Larry Altman said
Wednesday. "My gut tells me: If the
S&P were to rally another 150 points, what are you making, 10 percent? But
if the S&P has a correction similar to, or more dramatic, to what happened
in the Russell and the Nasdaq, I think the risk-reward is to the downside…maybe
there's a better opportunity coming up to get involved." Story at…http://www.cnbc.com/id/101672586
As noted below, I remain fully invested. I think the message above is be cautious with new money.
MARKET REPORT
Wednesday, the S&P 500 fell about 0.5% to 1889 (rounded).
VIX ROSE about 0.3% to 12.17.
The yield on the 10-year Treasury Note collapsed to 2.54%
at the close. While the link/article I
posted above may explain the slide, it still comes down to fear of poor economic
performance, either here or worldwide.
No matter the source, I don’t see how falling bond yields are good for
equities.
The Bond Ghouls are still suggesting that stocks may be
under pressure soon, perhaps even more urgently.
Repeating yesterday’s comment: The S&P 500 finally
moved above the old high of 1891, but not by much. Now it will be imperative that the Index
advance further. A stall now could
signal a pullback.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of stocks advancing on the NYSE
dropped 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 +47. (It was +113 Tuesday.) The 10-day moving
average of change in the spread was minus-2. In other words, over the last 10-days, on
average, the spread has DECREASED by 2 each day. The smoothed 10-dMA of up-volume
turned DOWN today. The internals switched
to neutral today.
NTSM
The NTSM analytical model for LONG-TERM MONEY remained
HOLD Wednesday. Sentiment remained a
very high 83%-bulls (5-dMA of {bulls/(bulls+bears)} for funds invested in
selected Rydex/Guggenheim funds. On a statistical basis, Sentiment is
negative. Volume & VIX indicators
are neutral. Price is positive.
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): BUY
The chart still looks good. 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.”
