“U.S. retail sales barely rose in April, tempering hopes of a sharp acceleration in economic growth in the second quarter…retail sales edged up 0.1 percent last month…"You really had a spectacular March. You are now having an April hangover...The reality of the economy is decent but not great. Some people over-extrapolated the March numbers," said Guy Berger, an economist at RBS in Stamford, Connecticut.” Story at…
http://www.reuters.com/article/2014/05/13/us-usa-economy-idUSBREA4C0D820140513
By request from a regular reader, here’s John Hussman’s view of the new
highs.
THE VIEW FROM HUSSMAN (Hussman Funds)
“With advisory sentiment
running at 56% bulls and fewer than 20% bears, with most historically reliable valuation metrics about twice their pre-bubble norms (and
presently associated with negative expected S&P 500 nominal total returns
on every horizon of 7 years and less), with capitalization-weighted indices
near record highs but smaller stocks and speculative momentum stocks diverging
badly, and with a Federal Reserve clearly intent on winding down the policy of
quantitative easing that has brought these distortions about, we continue to
view the present market environment as among the most dangerous instances in
history…If you think the market is not going to lose a large fraction of its
value over the next few years, a century of history thinks you’re wrong.” –
John Hussman, PhD. Wekly market
commentary from Hussman Funds at…
http://www.hussmanfunds.com/wmc/wmc140512.htm
TIME TO TAKE PROFITS (Breakout/Yahoo Finance)
“Jeff Kilburg of KKM Financial
says what investors should really be keeping an eye on is volatility as
measured by the VIX (^VIX)…’As
we get closer to May 25th that’s the big election in East Ukraine. I envision a
1,900 print in the S&P500 as well as an 1,800 print within a 2 week span. I
think volatility is going to come back at the end of this month.’” Video and
transcript at… http://finance.yahoo.com/blogs/breakout/stocks-at-all-time-highs-means-take-profits-now--kilburg-192606087.html
MARKET TARGET 1950 (Bob Janjuah)
Bob Janjuah said on CNBC that he expects around 1950 ‘…so
we’ve got another month or so.’” Video at…
http://bobjanjuah.blogspot.com/2014/04/1950-is-target-up-for-now.htmlCmt: 1950 is the upper trend line of the 1-year chart. If the S&P 500 can get past the 1900 area, 1950 is easy.
MARKET REPORT
Tuesday, the S&P 500 was unchanged at 1897 (rounded).
VIX FELL about 1% to 12.13.
The yield on the 10-year Treasury Note fell to 2.61% at
the close.
The Bond Ghouls are suggesting that stocks may be under
pressure soon.
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 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 Tuesday. The spread
(new-highs minus new-lows) was +113 . (It was +145 Monday.) The 10-day moving
average of change in the spread was +3. In
other words, over the last 10-days, on average, the spread has INCREASED by 3 each
day. The smoothed 10-dMA of up-volume turned up today. The internals switched to positive today.
NTSM
The NTSM analytical model for LONG-TERM MONEY remained
HOLD Tuesday. Sentiment rose to 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
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.”
