“After correcting for seasonal adjustment problems, the
ISM Manufacturing Index was revised to 55.4 in May from the 53.2 reading
originally reported. With the correction, the May ISM reading is up from
54.9 in April and below the Briefing.com consensus…The data have…not been
either a good forecasting tool or a good read on current conditions during this
business cycle. It [is] simply a survey that provides broad indications of
trends.” Additional analysis and charts at…https://www.briefing.com/Investor/Calendars/Economic/Releases/napm.htm
STOCKS ABOVE THEIR 200-DAY MOVING AVERAGE (-dMA)
The stocks above their 200-dMA has moved up, but it remains
in a downward-trending channel with lower highs and lower lows as of Friday’s
close. With a value of 62.8 it is now
above the value of 60.6 that has been trouble in the past. This trend is one of the more important ones
to watch to see which way this market is going:
(1) continued new highs or (2) will it (finally) have that long awaited correction.
Chart from...
http://www.indexindicators.com/charts/nyse-vs-nyse-stocks-above-200d-sma-params-x-x-x-x/Chart from...
MARKET REPORT
Monday, the S&P 500 rose about 0.1% to 1925 (rounded).
VIX fell about 1.6% to 11.58.
VIX remains at a point that has recently aligned with the
start of corrections, but it’s trend is falling so on the whole I think it is
good news for the time being.
The yield on the 10-year Treasury Note rose slightly to 2.53%
at the close.
The Bond Ghouls remain worried.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of stocks advancing on the NYSE
was 58% at the close Monday. (A number above
50% for the 10-day average is generally good news for the market.) New-highs
outpaced New-lows Monday. The spread
(new-highs minus new-lows) was +190 . (It was +145 Friday.) The 10-day moving
average of change in the spread was +15. In other words, over the last 10-days, on
average, the spread has INCREASED by 15 each day. The smoothed 10-dMA of up-volume
was UP today. The internals remain
positive 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 Friday. Sentiment fell to 70%-bulls
(5-dMA of {bulls/(bulls+bears)} for funds invested in selected Rydex/Guggenheim
funds at the close on Friday. 70%-bulls
is still a high number, but on a statistical basis, Sentiment is now
neutral. Price, Volume & VIX
indicators also 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 STOCKS--
ENSCO (ESV): BUY
The chart looks OK with higher lows and it made a higher high on the 1-month chart so I again rate ESV as BUY. It doesn’t hurt that it was upgraded to Buy on 27 May by The Street.com. For my initial discussion see the NTSM blog at:
http://navigatethestockmarket.blogspot.com/2014/05/coppock-curve-says-stock-crash-nowblow.html
ENSCO benefited from an upgrade of Diamond Offshore 29 May by Morgan Stanley. Morgan Stanley upgraded Diamond Offshore to equal weight. They said, “Our Underweight thesis based on significant negative earnings revisions has largely played out. We also believe that the cycle is turning and that floater availability has peaked.”
TESARO (TSRO): BUY
For my initial discussion see the NTSM blog at:http://navigatethestockmarket.blogspot.com/2014/05/gdp-contractsjobless-claims.html
[28 May 2014] BMO Capital upgraded Tesaro (NASDAQ: TSRO) from Market Perform to Outperform with a price target of $46.00. Posted at…
http://www.streetinsider.com/Upgrades/BMO+Capital+Upgrades+Tesaro+(TSRO)+to+Outperform/9071511.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 at least 25-stocks to be “diversified.”
Do your own due-diligence.
